Meritor Savings Bank v. Vinson: Sexual Harassment is Unlawful Discrimination

In Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986), the Supreme Court recognized for the first time that sexual harassment is a violation of Title VII of the Civil Rights Act of 1964.. 

As discussed in an earlier post, Title VII protects employees from workplace discrimination “because of” sex. 42 U.S.C. § 2000e-2(a).

Meritor Savings Bank addressed the question of whether Title VII prohibits employers from creating a sexually “hostile environment” or only prohibited tangible economic discrimination, like terminations and demotions.

The Court held, inter alia, that “hostile environment” sexual harassment is a form of sex discrimination that is actionable under Title VII. Id. at 63-69. This is because the language of Title VII is not limited to “economic” or “tangible” discrimination, like a termination resulting in wage loss. Therefore, sexual harassment leading to purely non-economic injury (like emotional distress) can violate Title VII. 

Facts

In 1974, Meritor Savings Bank hired Vinson as a teller. Her supervisor was a man named Sidney Taylor. Vinson testified that Taylor subsequently invited her out to dinner and, during the course of the meal, suggested that they go to a motel to have sex. At first, she refused, but out of what she described as fear of losing her job she eventually agreed. According to Vinson, Taylor thereafter repeatedly demanded sexual favors from her, usually at the branch, both during and after business hours. She estimated that over the next several years she had intercourse with him some 40 or 50 times. In addition, Vinson testified that Taylor fondled her in front of other employees, followed her into the women’s restroom when she went there alone, exposed himself to her, and forcibly raped her on several occasions. Taylor denied all this. The District Court found that any sexual relationship between Vinson and Taylor was a voluntary one. 

In her suit against Taylor and the bank, Vinsom claimed that during her four years at the bank she had constantly been subjected to “sexual harassment” by Taylor in violation of Title VII. She sought injunctive relief, compensatory and punitive damages against Taylor and the bank, and attorney’s fees.

The Court’s Decision

Meritor Savings Bank raised the question of whether Title VII’s prohibition on sex-based “discrimination” prohibits employers from creating a sexually “hostile environment” or was limited to a prohibition on tangible economic discrimination, like terminations and demotions.

The Court held that “hostile environment” sexual harassment is a form of sex discrimination that is actionable under Title VII. Id. at 63-69. This is because the language of Title VII is not limited to “economic” or “tangible” discrimination, like a termination resulting in wage loss. Therefore, consistent with EEOC’s interpretation of Title VII, sexual harassment leading to purely non-economic injury (like emotional distress) can violate Title VII.

In so holding, the Court emphasized the purpose of Title VII: “Title VII affords employees the right to work in an environment free from discriminatory intimidation, ridicule, and insult whether based on sex, race, religion, or national origin. 477 U.S. at 65. Citing the EEOC’s guidelines on sex discrimination, the Court held that an employee may establish a violation of Title VII “by proving that discrimination based on sex has created a hostile or abusive work environment.” Id

The Court quoted the Eleventh Circuit’s decision in Henson v. City of Dundee, 682 F.2d 897, 902 (11th Cir. 1982), which compared sex-based harassment to racial harassment:

Sexual harassment which creates a hostile or offensive environment for members of one sex is every bit the arbitrary barrier to sexual equality at the workplace that racial harassment is to racial equality. Surely, a requirement that a man or woman run a gauntlet of sexual abuse in return for the privilege of being allowed to work and made a living can be as demeaning and disconcerting as the harshest of racial epithets.

477 U.S. at 67. The Court went on to hold that for harassment to violate Title VII, it must be “sufficiently severe or pervasive ‘to alter the conditions of [the victim’s] employment and create an abusive working environment.'” Id. (quoting Henson at 904).

The Court further held that “voluntariness” in the sense that an employee was not forced to participate in sexual conduct against her will, is no defense to a sexual harassment claim. The District Court had therefore erroneously focused on the “voluntariness” of Vinson’s participation in the claimed sexual episodes. In a sexual harassment case, the correct inquiry is whether the employee by her conduct indicated that the alleged sexual advances were unwelcome, not whether her participation in them was voluntary. 477 U.S. at 67-68. The Court further held that while evidence of an employee’s sexually provocative speech or dress may be relevant in determining whether she found particular advances unwelcome, such evidence should be admitted with caution in light of the potential for unfair prejudice. Id. at 69.

Analysis

Meritor Savings Bank marked the first time the Supreme Court recognized a cause of action for sexual harassment. The decision also clarified that sexual harassment creating a hostile work environment constitutes unlawful sex discrimination under Title VI. The case is also notable for questioning whether sexual conduct between a supervisor and a subordinate could truly be voluntary due to the power dynamics and hierarchical relationship between supervisors and subordinates.

Here’s a link to a contemporaneous 1986 New York Times article about the case and its significance.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Successor Liability for Employment Claims

In employment law, successor liability addresses the situation where one company violates Title VII of the Civil Rights Act (or other federal employment laws) by subjecting an employee to harassment or discrimination, then that company is sold to a second company before

the harassment or discrimination can be remedied. Under some circumstances, that second company can be held liable for the first company’s violations of Title VII — even though the second company did not itself subject the employee to harassment or discrimination.

Courts have emphasized the importance of successor liability in fulfilling Title VII’s remedial purposes. Successor liability under Title VII is an “equitable doctrine … addressing a particular problem of employment discrimination: ‘Failure to hold a successor employer liable for the discriminatory practices of its predecessor could emasculate the relief provisions of Title VII by leaving the discriminatee without a remedy or with an incomplete remedy.’” EEOC v. Phase 2 Investments Inc., 310 F. Supp. 3d 550, 569  (D. Md. 2018) (quoting EEOC v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1091 (6th Cir. 1974)

Therefore, courts may impose liability on a successor company even though it had little relationship to the first company and purchased the first company’s assets without agreeing to take responsibility for the first company’s liabilities to its employees. “Successor liability is liberally imposed.” Fennell v. TLB Plastics Corp., No. 84 Civ. 8775, 1989 WL 88717, *2 (S.D.N.Y. July 28, 1989) (citing Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987) (finding successor liability (in the labor law context) where the successor changed marketing and sales, did not assume liabilities or trade name, hired employees through newspaper ads rather than from predecessor’s employment records, and seven months had passed between predecessor’s demise and successor’s start up) (emphasis added).

In determining whether successor liability in the Title VII context is appropriate, courts often look to nine equitable factors set forth in the Sixth Circuit’s decision in MacMillan:

1) whether the successor company had notice of the charge, 2) the ability of the predecessor to provide relief, 3) whether there has been a substantial continuity of business operations, 4) whether the new employer uses the same plant, 5) whether he uses the same or substantially the same work force, 6) whether he uses the same or substantially the same supervisory personnel, 7) whether the same jobs exist under substantially the same working conditions, 8) whether he uses the same machinery, equipment and methods of production and 9) whether he produces the same product.

Phase 2, 310 F. Supp. 3d at 570 (quoting MacMillan, 503 F.2d at 1094).

Factors 4-9 are essentially subsets of the “continuity of business operations” factor. The equitable test, then, “really comes down to three major factors: whether a successor had notice, whether a predecessor had the ability to provide relief, and the continuity of the business[.]” Phase 2, 310 F. Supp. 3d at 570 (internal quotes and citations omitted). Many cases in this area turn on a debate as to the first factor: whether the successor company had notice of an employee’s claims against a predecessor company.

Constructive Notice Through Due Diligence

Importantly, for the purposes of successor liability, “notice” can be constructive notice. “Constructive notice is information or knowledge of a fact imputed by law to a person … because he could have discovered the fact by proper diligence, and his situation was such as to cast upon him the duty of inquiring into it.” EEOC v. 786 South LLC, 693 F.Supp.2d 792, 795 (W.D. Tenn. 2010) (citing Black’s Law Dictionary 1062 (6th ed. 1990)). 

This means a successor company might be liable for a predecessor’s Title VII violations, even though the second company did not actually know about the violations before the sale, because the second company could have learned about the violations by exercising a little diligence. For example, in Lyles v. CSRA Inc., No. GJH-18-973, 2018 WL 6423894, *4 n3 (D. Md. Dec. 4, 2018), the court found sufficient notice for successor liability where “the record includes evidence of the lengthy due diligence process, meaning a jury could conclude that [the buyers] had constructive notice of the charges.”) Similarly, in 786 South LLC, 693 F.Supp.2d at 795, the court held a successor liable even though it had no actual notice because “constructive notice may suffice under the successor liability doctrine, at least where the relevant charges have been filed with the EEOC”). Likewise, in Lipscomb v. Techs., Servs., & Info., Inc., No. CIV.A. DKC-09-3344, 2011 WL 691605, *9 (D. Md. Feb. 18, 2011) the court imposed liability on a successor defendant even though it had no actual notice of the Title VII violations, because “Defendant could have acquired notice of the EEOC complaint prior to purchasing the MDEBEP subcontract at APG with some due diligence and inquiry.” (emphasis added).

See also Phase 2, 310 F. Supp. 3d at 570 (“At the very least, Maritime had constructive notice…the lengths to which Mister went to protect itself from liability, such as structuring the sale as an asset purchase, inquiring into Maritime’s liabilities, listing the assumed liabilities in a schedule, and including an indemnification clause, actually demonstrate the fairness of holding Mister liable as a successor.”); NLRB v. South Harlan Coal, Inc., 844 F.2d 380, 385 (6th Cir. 1988) (citing Golden State Bottling Co. v. NLRB, 414 U.S. 168, 172-74 (1973) for the principle that “knowledge of unfair labor practice litigation need not be actual, but may be inferred from the circumstances.”); EEOC v. Vucitech, 842 F.2d 936, 945 (7th Cir. 1988) (holding successor liable because, inter alia, it had at least constructive knowledge of discrimination charges); Scott v. Sopris Imports Ltd., 962 F. Supp. 1356, 1359–60 (D. Colo. 1997) (recognizing constructive notice is sufficient under MacMillan).

Constructive Notice Through Common Managers

Typically, constructive notice exists where a potential Title VII violation has been documented with the first company, meaning that the purchasing company has the ability to learn of the claim through by exercising pre-sale due diligence. Constructive notice, in this context, therefore turns on the purchasing company’s ability to acquire notice of a legal claim through “due diligence.” See, e.g., Lipscomb, 2011 WL 691605 at *8 (“As to the notice issue, lack of timely knowledge of a pending EEOC investigation does not per se bar successor liability… With some due diligence, Defendant would have been able to ascertain that Plaintiff had filed an EEOC charge[.]”)

Alternatively, constructive notice may exist where the predecessor’s high level managers, having personal knowledge of an employee’s discrimination claims, then become managers for the successor. See, e.g., EEOC v. Sage Realty Corp., 507 F. Supp. 599, 612 (S.D.N.Y.), decision supplemented, 521 F. Supp. 263 (S.D.N.Y. 1981) (“Palumbo, who was president of [predecessor] Monahan Cleaners, is now a full-time consultant to [successor] Monahan Building, overseeing the operation of Monahan Building’s business and supervising Monahan Building’s employees. Monahan Building had constructive notice of Hasselman’s charge of sex discrimination through Palumbo.”)

In sum, Title VII successor liability is an important equitable doctrine because it protects employees who have been subjected to unlawful discrimination in the event the guilty employer sells its assets before the employee can obtain relief. Successor employers have the ability to learn about potential employee claims before completing a purchase, and use that information to negotiate a lower purchase price. The end result is to protect the relief provisions of Title VII and the employees they cover.  

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Smith v. City of Jackson: ADEA Authorizes Employee Disparate Impact Claims

In Smith v. City of Jackson, Miss., 544 U.S. 228 (2005), the Supreme Court recognized that the Age Discrimination in Employment Act, like Title VII of the Civil Rights Act, authorizes disparate impact claims. This means that an employee, to prevail on an age discrimination claim, does not necessarily have to prove her employer intended to discriminate against her because of her age. Under a disparate impact approach, an employee may prove age discrimination by showing the employer took an adverse action against her based on a standard or test that has the effect of adversely impacting older workers — regardless of whether the employer intended to adversely impact older workers. Unlike Title VII, however, § 4(f)(1) of the ADEA narrows its coverage by permitting any “otherwise prohibited” action “where the differentiation is based on reasonable factors other than age[.]” 544 U.S. at 233 (citing 29 U.S.C. § 623(f)(1)). The scope of disparate-impact liability under ADEA is therefore arguably narrower than disparate-impact liability under Title VII. Id. at 240.

As discussed in an earlier post, the Age Discrimination in Employment Act protects employees over age 40 from discrimination based on age in hiring, discharge, promotion, compensation, or other terms, conditions or privileges of employment

Title VII of the Civil Rights Act contains similar provisions outlawing discrimination because of race, sex, or religion. As discussed in an earlier post, the Supreme Court in in Griggs v. Duke Power Company, 401 U.S. 424 (1971), addressed the Title VII issues created by employer policies that are facially neutral, and which the employer does not intend as discriminatory, but which adversely impact employees on the basis of race, sex, or religion. Griggs decided that where an employer uses a neutral policy or rule, or utilizes a neutral test, and this policy or test disproportionately impacts minorities or women in an adverse manner, then the neutral rule or test violates Title VII unless the employer proves it is justified by “business necessity.”

City of Jackson addressed the question of whether the ADEA, like Title VII, allows disparate impact claims by prohibiting facially neutral employer practices that disparately impact older workers.

Facts

City of Jackson involved a challenge to a city’s pay plan for police officers that was relatively less favorable to older workers than to younger workers.

The Jackson plan divided the officers into five basic positions — police officer, master police officer, police sergeant, police lieutenant, and deputy police chief — and divided the pay scale for those positions into a series of steps and half-steps. The few officers in the two highest ranks were all over age 40. The raises they received under the plan, though higher in dollar amount than the raises given to junior officers, represented a smaller percentage of their salaries. These officers in the two highest ranks were the members of the class arguing that the pay plan had a “disparate impact” against older workers.

The Jackson plaintiffs’ evidence established two main facts: First, almost two-thirds (66.2%) of the officers under 40 received raises of more than 10% while less than half (45.3%) of those over 40 did. Second, the average percentage increase for the entire class of officers with less than five years of tenure was somewhat higher than the percentage for those with more seniority. Because the older officers tended to occupy more senior positions, on average they therefore received smaller increases when measured as a percentage of their salary. Jackson, 544 U.S. 228, 241–42.

The older officers in the two highest ranks filed suit against the City under the ADEA, on the grounds that the pay plan violated the law by having a disproportionate impact on workers over age 40.

The Court’s Decision

Addressing these facts, the Supreme Court held, that like Title VII, the ADEA authorizes disparate-impact claims. The Court also pointed out, however, that unlike Title VII, § 4(f)(1) of the ADEA narrows its coverage by permitting any “otherwise prohibited” action “where the differentiation is based on reasonable factors other than age[.]” Jackson, 544 U.S. at 233. The scope of disparate-impact liability under ADEA is therefore narrower than disparate-impact liability under Title VII. Id. At 240.

To make out an ADEA disparate-impact claim, the Court held that plaintiffs must do more than show a pay plan generally has the effect of being less generous to older workers. They must establish a “specific test, requirement, or practice within the pay plan that has an adverse impact on older workers.” 544 U.S. at 241. In Jackson, while plaintiff employees had proved that the plan was relatively less generous to older workers, they had not identified any specific test, requirement, or practice “within the plan” that had an adverse impact on older workers. Id.

The Court also discussed the provision of the ADEA that permits differentiation based on “reasonable factors other than age,” as applied to the factors underlying the pay plan at issue. See 29 U.S.C. § 623(f)(1). The Court observed that the basic explanation for the differential in the Jackson pay plan was the City’s perceived need to raise the salaries of junior officers to make them competitive with comparable positions in the market. The Court held that the disparate impact was attributable to the City’s decision to give raises based on seniority and position. “Reliance on seniority and rank is unquestionably reasonable given the City’s goal of raising employees’ salaries to match those in surrounding communities… [Therefore] the City’s decision to grant a larger raise to lower echelon employees for the purpose of bringing salaries in line with that of surrounding police forces was a decision based on a “reasonable facto[r] other than age” that responded to the City’s legitimate goal of retaining police officers. Jackson, 544 U.S. at 242.

The Court therefore (1) held that the ADEA authorizes disparate impact claims, although the scope of such claims is somewhat narrower than the scope of disparate impact claims under Title VII, and (2) affirmed summary judgment for the employer city on the particular facts of that case.

Analysis

Under City of Jackson, employees may bring ADEA claims on the grounds that facially neutral employer practices or plans have a disparate impact on older workers. However, at least with respect to employer pay plans, it is probably not enough to just show that the end result of the pay plan was relatively less favorable to older workers than to younger workers. Employees would also need to identify a specific practice “within the plan” that adversely affected older workers. 544 U.S. at 241. In the trial court decisions applying City of Jackson under different factual circumstances, however, the practical difference between pointing out that a pay plan “is relatively less generous to older workers” and identifying a “specific test, requirement, or practice within the pay plan that has an adverse impact on older workers” is sometimes a little blurry. Id. For example, the Norfolk division of the Eastern District of Virginia denied an employer’s motion to dismiss an ADEA disparate impact claim, where the complaint alleged the employer “implemented a screening and evaluation process [that] did not evaluate applicants fairly[,] but instead discriminated against candidates based on age”; “employees who were substantially older and with vastly more experience in the position and field were systematically passed over for the ITS positions in favor of younger, less-qualified applicants”; and “support[ed] the allegations with statistical data highlighting the respective ages of the applicants and those selected.” Andreana v. Virginia Beach City Pub. Sch., No. 2:17-CV-574, 2018 WL 2182297, *6 (E.D. Va. May 9, 2018). Similarly, in Merritt v. WellPoint, Inc., 615 F. Supp. 2d 440, 446 (E.D. Va. 2009), the court denied a motion to dismiss where the plaintiffs identified several alleged “arrangements” made by the employer that had a disparate impact on older workers, including: “analytical models,” a “selection process which considered age, and age-related characteristics, as negative factors” including medical care or leave, the use of “metrics,” which disproportionately evaluated and/or impacted older employees, and a consideration of “age and/or age-related characteristics in the ‘cost’ of maintaining an older workforce.”)

The main takeaway is this. City of Jackson held that the ADEA, like Title VII, authorizes disparate impact claims. This means that an employee, to prevail on an age discrimination claim, does not necessarily have to prove her employer intended to discriminate against her because of her age. Under a disparate impact approach, an employee can prove age discrimination by showing the employer took an adverse action against her based on a standard or test that had the effect of adversely impacting older workers — regardless of whether the employer intended to adversely impact older workers. Unlike Title VII, however, the ADEA narrows its coverage by permitting any “otherwise prohibited” action “where the differentiation is based on reasonable factors other than age[.]” ADEA § 4(f)(1). The scope of disparate-impact liability under ADEA is therefore arguably narrower than disparate-impact liability under Title VII.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Pregnancy Discrimination Act: Protections for Employees Relating to Childbirth

The Pregnancy Discrimination Act of 1978 amended Title VII of the Civil Rights Act of 1964 to prohibit sex discrimination on the basis of pregnancy. Specifically, the PDA prohibits employment discrimination “on the basis of pregnancy, childbirth, or related medical conditions.” 42 U.S.C. § 2000e(k). Pregnancy discrimination therefore involves treating a worker unfavorably because of a pregnancy-related condition in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits (such as leave and health insurance), and any other terms or conditions of employment. The PDA does not require employers to provide medical coverage for elective abortions, except where the mother’s life is endangered or medical complications have arisen from an abortion. As with the rest of Title VII, the PDA does not apply to employers with fewer than 15 employees (although such employers may be subject to similar requirements under state laws).

History

Congress enacted the Pregnancy Discrimination Act in response to the Supreme Court’s decision in General Electric Company v. Gilbert, 429 U.S. 125 (1976), which interpreted the original version of Title VII as not prohibiting discrimination on the basis of pregnancy. The PDA changed that by clarifying that the terms “because of sex” or “on the basis of sex” in Title VII’s section prohibiting sex discrimination included “because of or on the basis of pregnancy, childbirth, or related medical conditions[.]” 42 U.S.C. § 2000e(k).The PDA further specified that  “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes…as other persons not so affected but similar in their ability or inability to work[.]” Id.

As a result of the PDA, therefore, Title VII prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions. This requires employers to treat women who are affected by pregnancy or related conditions the same way as any other employees or applicants who have a similar ability or inability to perform the job at issue.

The Equal Employment Opportunity Commission publishes helpful information about the PDA and the protections it provides.

Protections

The PDA (through Title VII) generally protects a female worker from employment discrimination because of pregnancy, childbirth, or any related medical conditions as long as she is able to perform the major functions of her job. For example, as a result of the PDA, an employer is prohibited from declining to hire or promote a pregnant worker because of her condition as long as she can do the job. This means an employer cannot refuse to hire or promote a pregnant woman based on stereotypes about pregnant workers, or because of any biases co-workers or customers may have against pregnant workers. The PDA further prohibits pregnancy discrimination in all other aspects of employment, such as pay, job assignments, layoffs, promotions, training, benefits, firing, or any other terms or conditions of employment.  

Under the PDA, pregnant employees who are able to work must be allowed to work. They cannot be held out from work just because they are pregnant, or have recently been pregnant. Nor can they be treated differently, on account of their pregnancy, from other employees with non-pregnancy-related medical conditions. For example, if an employee has to take pregnancy-related leave, her employer generally must hold her job for her for the same length of time that it holds jobs for other employees on sick or temporary disability leave. Similarly, an employer cannot require a pregnant employee able to work to take or remain on leave until giving birth. This means, for example, that if an employee has to miss work because of a pregnancy-related condition, and is later cleared to return to work before giving birth, the employer should allow her to return to work. The PDA also generally ensures that an employer cannot prohibit an employee from returning to work for some arbitrary length of time after giving birth. And just as Title VII prevents employers from denying job opportunities to or taking adverse actions against employees because of their sex, the PDA (through Title VII) prohibits employers from denying job opportunities to or terminating or demoting employees because of their pregnancies, childbirths, or related conditions.

 

If an employer provides health insurance to employees, the PDA generally requires that the insurance cover expenses incurred for treatment of pregnancy-related conditions on the same basis as expenses for other medical conditions. However, the PDA specifies that employers are not required to provide insurance coverage for expenses arising from abortion, “except where the life of the mother would be endangered if the fetus were carried to term, or except where medical complications have arisen from an abortion[.]” 42 U.S.C. § 2000e(k). This generally means, for example, the PDA could require an employer to provide disability or sick leave for an employee who is recovering from an abortion, just as it would for women recovering from other pregnancy-related conditions.

 

Related Laws: ADA and FMLA

The protections of the PDA may sometimes overlap with the protections provided by Title I of the Americans with Disabilities Act. This is because impairments related to pregnancy or pregnancy-related conditions may qualify as temporary disabilities under the ADA, giving rise to the ADA’s protections and reasonable accommodation requirements. See 42 U.S.C. § 12112. Generally, under both the PDA and the ADA, employees who, due to pregnancy, are temporarily unable to perform their job tasks, should be treated the same as any other employee with temporary disabilities unrelated to pregnancy. Under the ADA, an employer might be required to provide an employee having pregnancy-related impairments with light duty work, modified tasks, alternative assignments, or temporary leave.  

 

Pregnant employees and new parents may also have additional rights under the Family and Medical Leave Act. The FMLA generally applies to eligible employees who have worked for their employer for at least 12 months and incurred at least 1,250 hours of service in the past 12 months. The FMLA allows an eligible employee to take up to 12 weeks of leave to care for a new child. 29 U.S.C § 2612(a)(1)(A). The Department of Labor’s Wage and Hour Division is a good resource for additional information about FMLA eligibility requirements, rights, and responsibilities.

 

Retaliation Prohibited

Because the PDA is part of Title VII, like Title VII, the PDA prohibits retaliation. This means it would be unlawful for an employer to punish an employee for opposing employment practices that allegedly discriminate based on pregnancy, or for filing a discrimination charge, testifying, or participating in an investigation, proceeding, or litigation regarding alleged pregancy discrimination. See 42 U.S.C § 2000e–3.

 

Reporting Violations

As with Title VII’s broader rights regarding sex, race, national origin, and religious discrimination, an employee who believes she has been subjected to pregnancy discrimination must file a charge of discrimination with the EEOC in order to later pursue a PDA/Title VII pregnancy discrimination claim in court. Once the EEOC receives the charge, it has the power to investigate the allegations and require the employer to respond and give its side of the story. Title VII’s anti-retaliation provision, 42 U.S.C. § 2000e-3, prohibits employers from treating workers or prospective workers unfavorably because they filed or participated in an EEOC charge or investigation.

 

If the EEOC, based on its investigation, determines the employer engaged in pregnancy-based discrimination, it may try to help the employee and employer resolve the matter by reach an agreement outside of court to remedy the discrimination. If settlement efforts do not succeed, in some circumstances the EEOC may consider filing a lawsuit to address the discrimination. However, due to the EEOC’s large caseload and limited resources, most EEOC charges do not result in lawsuits filed by EEOC. This is true even for charges that have a lot of merit. More commonly, after the EEOC concludes its investigation, it issues a notice giving the employee the right to pursue a lawsuit in court. After receiving the notice of suit rights, the employee has 90 days to bring a legal action in court regarding the discrimination referenced in the charge. Under the PDA, as with the rest of Title VII, federal workers and applicants have similar protections to those given to employees of private organizations and state or local governments. However, federal employees and applicants have a unique EEO complaint process.

 

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Employee Retirement Income Security Act: Protections for Employee Retirement and Health Plans

The federal Employee Retirement Income Security Act of 1974 (ERISA) sets requirements for most voluntarily created retirement and health plans in the private sector. ERISA’s rules are intended to protect the employees in these plans.

Among other things, ERISA (1) requires plans to provide participating employees with information about plan features and funding, and other plan information; (2) imposes fiduciary responsibilities on those who manage and control plan assets; (3) requires plans to establish a grievance and appeals process for participating employees to get benefits from their plans; and (4) gives participants the right to file lawsuits for unpaid benefits and breaches of fiduciary duty.

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) is responsible for administering various provisions of ERISA. The DOL website, cited throughout this post, provides helpful information about ERISA rights and responsibilities. Here is a link to the text of the law.

ERISA Requires Plans to Provide Employees with Important Plan Information.

Under ERISA, plan administrators must provide participating employees with certain important facts about their health benefits and retirement plans. Plan administrators are the people who implement ERISA-covered plans and manage the assets that fund them. The information they must disclose to participating employees includes plan rules, financial information, and documentation about plan operation and management. ERISA requires plan administrators to automatically provide some categories of information to the plan holder. Other information, the administrator should provide upon written request.

Among the documents an ERISA plan administrator must provide is the plan’s Summary Plan Description. The SPD informs participating employees about the benefits their health or retirement plan provides and how the plan operates. The SPD also generally explains when an employee can start participating in the plan and how the employee should go about filing a claim for benefits under the plan. Participating employees must also be informed about changes to the plan, either through a revised SPD, or in a separate document, called a Summary of Material Modifications.

Required ERISA plan information also includes a Summary of Benefits and Coverage (SBC).  The SBC is a template document that should clearly summarize key features of the plan, including covered benefits, cost-sharing provisions, and coverage limitations. Plans and issuers must provide the SBC to participants and beneficiaries at certain times (including with written application materials, at renewal, at special enrollment, and on request). If a participating employee has trouble obtaining the annual report of a plan from the plan administrator, she or he can submit a written request to EBSA.

ERISA Imposes Fiduciary Responsibilities on Plan Managers.

ERISA also imposes fiduciary responsibilities on people or entities with discretionary control over plan assets or management, responsibility for the administration of a plan, or entities who provide investment advice for compensation or have the authority or responsibility to do so. For example, a plan fiduciary would generally include plan trustees, administrators, and investment committee members.

A plan fiduciary is primarily responsible for running the plan in the best interests of the plan participants and beneficiaries for the purpose of providing benefits and paying plan expenses. This entails, among other things, acting prudently and diversifying the plan’s assets to minimize the risk of large losses, while following the plan terms to the extent those terms comply with ERISA’s requirements.  

Plan fiduciaries must also take care to avoid conflicts of interest. This means they may not engage in transactions on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, services providers, or the plan sponsor. If a plan fiduciary does not adhere to these principles of conduct, courts may take appropriate action to address the situation, such as removing the fiduciary and holding the fiduciary personally liable to restore losses to the plan, or to restore any profits obtained by improperly using plan assets.

ERISA Can Preempt State Law Breach of Contract Claims.

ERISA plans often look a lot like contracts — an agreement between an employer and an employee regarding pensions or other employment benefits. When a party to a contract fails to comply with its terms, the other party typically can file a lawsuit under state law for breach of contract. But when a plan administrator violates the terms of an ERISA plan, ERISA generally preempts a claim for breach of contract. See 29 U.S.C. § 1144(a) (“the provisions of [ERISA] shall supersede any and all State laws insofar as they now or hereafter relate to any employee benefit plan.” This generally means that an employee whose ERISA rights are violated must seek a remedy using ERISA’s private cause of action provisions (typically in federal court), rather than bringing a state law claim for breach of contract.

Considering ERISA’s objectives set forth in 29 U.S.C. § 1001(b), the U.S. Supreme Court has further explained Congress intended ERISA to preempt at least three categories of state law: (1) laws that “mandate[ ] employee benefit structures or their administration”; (2) laws that bind employers or plan administrators to particular choices or preclude uniform administrative practice; and (3) “laws providing alternate enforcement mechanisms” for employees to obtain ERISA plan benefits. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995).

In Aetna Health, Inc. v. Davila, 542 U.S. 200 (2004), the Supreme Court described the test for preemption in the context of claims to recover employee plan benefits. “[I]f an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant’s actions, then the individual’s cause of action is completely preempted by ERISA § 502(a)(1)(B).” Davila, 542 U.S. at 210.

In other words, under Davila, ERISA preemption applies when two circumstances coincide. First, the employee’s claim must fall within the scope of ERISA, meaning that the claim has to be related to an employee benefit plan. Section 502(a) of ERISA authorizes an employee to bring a civil suit to recover these kinds of benefits. That section of ERISA authorizes a participating employee to file suit “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). Second, there must be no other independent legal duty (aside from breach of the plan) implicated by the employer’s failure to provide the benefits at issue. If both criteria are met, ERISA preempts state law claims for recovery of the benefits.

The power of ERISA to convert claims under the laws of various states into a single kind of federal claim makes it easier for employers to have one uniform benefit plan, regardless of how many different states the employer operates in. In this sense, ERISA was designed to help larger employers and unions that operate in multiple states. ERISA’s preemption provision provides these organizations with uniformity, by allowing employers to focus on complying with the terms of ERISA throughout the country, at least to the extent that those terms preempt the various laws of 50 different states.

ERISA Does Not Preempt Federal Claims.

While ERISA preempts state laws, it does not preempt other federal laws. For example, ERISA preemption does not apply a claim under a federal law like the Americans with Disabilities Act. See 29 U.S.C. § 1144(d) (“Nothing in [ERISA] shall be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States (except as provided in sections 1031 and 1137(b) of this title) or any rule or regulation issued under any such law.”)

COBRA, HIPAA, and Other ERISA Amendments

Congress has amended ERISA many times. One of these amendments, the Consolidated Omnibus Budget Reconciliation Act (COBRA), provides some employees and their families with the right to continue their group health coverage (at their expense) for a limited time after certain events, such as voluntary or involuntary job loss, a transition between jobs, reduction in hours worked, divorce, death, and other major life events.

Another ERISA amendment, the Health Insurance Portability and Accountability Act (HIPAA) contains provisions aimed at protecting employees and their families from potential discrimination in health coverage based on factors that relate to an individual’s health. Among other things, HIPAA includes protections for coverage under group health plans that prohibit discrimination against employees and dependents based on their health status.

Other ERISA amendments include the Newborns’ and Mothers’ Health Protection Act, the Women’s Health and Cancer Rights Act (DOL fact sheet here), the Affordable Care Act, and the Mental Health Parity and Addiction Equity Act.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Price Waterhouse v. Hopkins: The Law of Stereotyping

In Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), the Supreme Court recognized Title VII’s prohibition on sex discrimination necessarily includes a prohibition on gender stereotyping. The female employee in Price Waterhouse was denied a promotion because she was “macho,” “tough-talking,” and used “foul language,” and therefore failed to conform to certain gender stereotypes related to women. Id. at 235, 250-53. Six members of the Court held that adverse employment action like this, rooted in “sex stereotyping” or “gender stereotyping,” was actionable sex discrimination.

Facts

Hopkins worked for an accounting firm, Price Waterhouse, at its Office of Government Services in Washington, D.C. Despite several years of strong performance, she was denied partnership in the firm.

Price Waterhouse denied Hopkins partnership, in essence, because of her aggressive personality, which sometimes bordered on abrasiveness. For example, partners evaluating her work had counseled her to improve her relations with staff members. And although Hopkins’ evaluations later noted improvement, her perceived shortcomings in this area ultimately doomed her bid for partnership. In the firm’s consideration of Hopkins for a promotion to partner, virtually all of the firm’s partners’ negative remarks about her had to do with her “interpersonal skills.” Id. at 234-35. Both “[s]upporters and opponents of her candidacy … indicated that she was sometimes overly aggressive, unduly harsh, difficult to work with and impatient with staff.” Id.

The Court observed that there were “clear signs” that some of the partners reacted negatively to Hopkins’ personality because she was a woman. Id. One partner described her as “macho”; another suggested that she “overcompensated for being a woman”; a third advised her to take “a course at charm school.” Id. Several partners criticized her use of profanity; in response, one partner suggested that those partners objected to her swearing only “because it’s a lady using foul language.” Id. Another supporter explained that Hopkins “ha[d] matured from a tough-talking somewhat masculine hard-nosed mgr to an authoritative, formidable, but much more appealing lady ptr candidate.” Id. But the male supervisor who bore responsibility for explaining to Hopkins the reasons for the firm’s decision to not grant her partnership described her purported failings in terms of stereotypes about how women should behave: in order to improve her chances for partnership, the firm advised, Hopkins should “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.” Id. at 235.

In short, the record indicated Price Waterhouse denied Hopkins partnership because she did not behave the way Price Waterhouse believed women should behave.

Hopkins filed suit against Price Waterhouse under Title VII of the Civil Rights Act of 1964, on the grounds that she was unlawfully denied partnership because of her sex.

Applicable Law

As discussed in an earlier post, Title VII makes it unlawful for an employer to “discharge any individual, or otherwise discriminate against any individual … because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a)(1).

Sex need only be a motivating factor, and not the only reason for the discharge or other discrimination. “[A]n unlawful employment practice is established when … sex … was a motivating factor for any employment practice, even though other factors also motivated the practice.” 42 U.S.C. § 2000e-2(m).

This section clearly prohibits an employer from refusing to hire or promote a female because she is female and the employer would prefer a male. Price Waterhouse addressed the question of whether Title VII also prohibits an employer from discriminating against an individual because she or he does not conform to the employer’s (or society’s) stereotypes about how the different sexes should behave.

The Court’s Decision

Addressing the facts in Price Waterhouse, the Supreme Court held, inter alia, that Title VII’s prohibition on sex discrimination necessarily includes a prohibition on gender stereotyping. The Court noted that Hopkins was denied a promotion because she was “macho,” “tough-talking,” and used “foul language,” and therefore failed to conform to certain stereotypes related to women. Id at 235, 250-53. Six members of the Court held that adverse employment action rooted in such “sex stereotyping” or “gender stereotyping” was actionable sex discrimination. Id. at 250–52 (plurality; “an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender”); see also id. at 258 (White, J., concurring); id. at 272–73 (O’Connor, J., concurring).

Analysis

This case is important in the context of developing and understanding Title VII’s prohibition against employment discrimination “because of sex.” Under Price Waterhouse, a discharge (or other adverse employment action) based at least partly on gender stereotyping is unlawful sex discrimination under Title VII. As the Fourth Circuit Court of Appeals explained in G.G. ex rel. Grimm (Grimm II), “the Supreme Court has expressly recognized that claims based on an individual’s failure to conform to societal expectations based on that person’s gender constitute discrimination ‘because of sex’ under Title VII[.]” 654 Fed. Appx. 606, 606–07 (4th Cir. 2016) (Davis, J., concurring) (internal citations omitted).

As the American Psychological Association explained in its amicus brief in Price Waterhouse, sex stereotyping can create discriminatory consequences for stereotyped groups — for example, where they shape perceptions about women’s typical and acceptable roles in society. The APA further explained, as seen in the circumstances surrounding Hopkins’ partnership denial, how sex stereoptyping can have negative effects on women in work settings. The Supreme Court’s decision in Price Waterhouse allowed Title VII to be applied in a manner that seeks to address and remedy these issues.

Following the reasoning in Price Waterhouse, courts around the country have consistently held that an employer violates Title VII when it takes adverse action against an employee because she or he does not behave the way the employer believes the different sexes should behave. For example, Stegall v. Citadel Broad. Co., 350 F.3d 1061, 1072 (9th Cir. 2003), as amended (Jan. 6, 2004) characterized employer complaints about “assertive, strong women” as “difficult,” “having a negative attitude,” “not a team player,” and “problematic” as sex stereotypes that show discrimination. For similar reasons, in Hively v. Ivy Tech Cmty. Coll., 853 F.3d 339, 351–52 (7th Cir. 2017) (en banc) the Seventh Circuit held that a female plaintiff could state a Title VII claim under a sex stereotyping theory. In Christiansen v. Omnicom Grp., Inc., 852 F.3d 195, 200–01 (2d Cir. 2017) (per curiam) the Second Circuit likewise held that the plaintiff employee stated a plausible Title VII claim based on a gender stereotyping theory. As did the Third Circuit, in Prowel v. Wise Bus. Forms, Inc., 579 F.3d 285, 290 (3d Cir. 2009) (collecting cases, noting “the Supreme Court held that Title VII prohibits discrimination against women for failing to conform to a traditionally feminine demeanor and appearance”). In Nichols v. Azteca Rest. Enters., Inc., 256 F.3d 864, 874–75 (9th Cir. 2001), the Ninth Circuit applied Price Waterhouse in the context of sex discrimination against a male employee, observing that “the holding in Price Waterhouse applies with equal force to a man who is discriminated against for acting too feminine.” Similarly, in Schwenk v. Hartford, 204 F.3d 1187, 1202 (9th Cir. 2000), the court noted that Title VII forbids “[d]iscrimination because one fails to act in the way expected of a man or woman”). The First Circuit applied Price Waterhouse in Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252, 261 n.4 (1st Cir. 1999), observing that “a woman can ground an action on a claim that men discriminated against her because she did not meet stereotyped expectations of femininity.”

For some additional examples of stereotyping discrimination in the trial courts, see Grimm v. Gloucester Cty. Sch. Bd., 302 F. Supp. 3d 730, 746 (E.D. Va. 2018) (discussing the gender-stereotyping theory of Price Waterhouse, collecting cases, and concluding claims of discrimination on the basis of failure to conform with gender-based societal expectations are “per se sex discrimination under Title VII[.]”); and Klings v. New York State Office of Court Admin., 2010 WL 1292256, *11, *15-16 (E.D.N.Y. Apr. 5, 2010) (complaints that the female plaintiff had an “abrasive personality” and was “condescending” could reflect a “gender bias: that women do not have leadership and motivational skills, [and] cannot manage aggressively[.]”).

In summary, Price Waterhouse was an important case because, among other things, it confirmed that Title VII’s language prohibiting discrimination “because of sex” includes a prohibition on gender stereotyping.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Anderson v. Mt. Clemens Pottery Co.: Burden of Proving Off-the-Clock Work

The Supreme Court classic Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946),  concerned the extent to which employees’ pre-work activities are compensable working time under the Fair Labor Standards Act (for the text of the FLSA, go here). The case also addressed which party has the burden of proving how much time employees spend engaged in compensable working time. In short, the Supreme Court held that preliminary work activities, like putting on uniforms or preparing tools, were controlled by the employer and performed for the employer’s benefit, are properly included as working time under the FLSA. The Court further held that under the FLSA employees must be compensated for significant time spent preparing to work at the job site. The Court also decided the employer has the burden of proof for determining the exact wages owed to employees who perform off-the-clock work.

As discussed in an earlier post, Section 7(a) of the FLSA defines working time, and requires employers to pay overtime wages under certain circumstances. 29 U.S.C. § 207(a). Section 11(c) of the FLSA requires employers to keep accurate records regarding time on the job. 29 U.S.C. § 211(c). Section 16(b) of the FLSA enables employees to sue to recover lost wages. 29 U.S.C. § 216(b).

Facts

Mt. Clemens Pottery Company employed 1,200 workers at an 8-acre Michigan facility. The plant was about 400 meters long. The employees entered the plant on one side, and worked on the other side. 328 U.S. 682-83.

A time clock was located near the entrance. The employer gave employees 14 minutes between each shift to punch the time clock, walk to their respective workbench and prepare for work. It took a minimum of eight minutes for all the employees to get by the time clock. The estimated walking time for employees ranged from 30 seconds to three minutes, but some workers needed as many as eight minutes to reach their workbenches. Upon arriving at their workbenches, employees were required to put on aprons or overalls, remove shirts, tape or grease arms, put on finger cots, prepare equipment, turn on switches, open windows, and/or assemble or sharpen tools. These kinds of “preparatory activities” took three to four minutes. Id.

The employer calculated working time under the FLSA based on the time cards punched by the clocks. The employer then deducted walking and preparatory time from the time cards based on the punched time and assumptions about how long prep work and walking would take on average. 328 U.S. 683-84.

Seven employees and their labor union brought a collective action under Section 16(b) of the FLSA, on behalf of themselves and other similarly situated workers. The suit alleged that the employer’s calculations did not accurately reflect the time actually worked and that they were deprived of the proper amount of overtime compensation. In short, the employees claimed that the employer’s method of computation (i.e. deducting time from their recorded time at the worksite to eliminate time spent on preliminary activities) did not accurately reflect all the time actually worked. Therefore, the employees argued, they were thereby deprived of the proper overtime compensation guaranteed them by Section 7(a) of the FLSA. The employees claimed, among other things, that all employees worked approximately 56 minutes more per day than the employer gave them credit for and that, in any event, all the time between the hours punched on their time cards constituted compensable working time. 328 U.S.C. 684.

The Court’s Decision

The Court held that when an employee sues her employer under the FLSA for unpaid minimum wages or unpaid overtime pay, claiming the employer has kept inadequate records of the employee’s time actually worked, and the employee produces sufficient evidence to show the amount of work for which the employee was not properly compensated as a matter of “just and reasonable inference,” the burden shifts to the employer to produce evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference favoring the employee. 328 U.S.C. § 687. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result may only be approximate, based on a reasonable estimate of amount of time the employee worked without compensation. Id. In other words, where the employer has not kept accurate records of all the time an employee works, the employer cannot complain that the unpaid minimum wages or overtime pay awarded to the employee lack the exactness that would have been possible had the employer kept accurate records. Id.

In reaching this conclusion, the Court reasoned that Section 11(c) of the FLSA imposed upon the employer, not the worker, the duty to keep proper records of wages, hours and other conditions and practices of employment. Where an employer fails to keep accurate records of time worked (i.e. including time worked off the clock, or time spent conducting preliminary activities before clocking in), the law does not deny recovery on the ground that the employee is unable to prove the precise extent of her uncompensated work. That approach, the Court reasoned, would create a strong disincentive for employers to keep any records at all and shift the burden of time-keeping back onto the employee. The Court therefore concluded that “an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.” 328 U.S. at 687.

The Court remanded the case to the trial court to determine how much time (on average) was spent walking and how much time doing preparatory activities and to enter an award of lost wages based only the amount of time engaged in preparatory activity.

Analysis

In practical terms, the Court’s decision in Mt. Clemens Pottery meant that once an employee testifies she has not been fully compensated for all the time she worked, the employer has the burden of proof for determining the exact wages owed to the employee for performing off-the-clock work. If the employer has not kept complete records of all time worked, including off-the-clock work, the employee may be awarded unpaid minimum wages or overtime pay based on a just and reasonable estimate of the uncompensated time she worked.

In light of the Court’s ruling in Mt. Clemens Pottery, in 1947 Congress amended the FLSA by enacting the Portal to Portal Act of 1947. 29 U.S.C. § 251, et seq. Among other things, the Portal to Portal Act sought to impose some limits on employer liability for time employees spent in “preliminary and postliminary” activity. 29 U.S.C. § 254(a).

The Supreme Court reaffirmed Mt. Clemens Pottery in the 2016 case Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036 (2016). In so holding, the Court reiterated that “where an employer violated its statutory duty to keep proper records, the [Mt. Clemens Pottery] Court concluded the employees could meet their burden by proving that they in fact ‘performed work for which [they were] improperly compensated and … produc[ing] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.’” 136 S. Ct. 1036, 1040 (2016) (quoting Mt. Clemens Pottery, 328 U.S. at 687.)

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

The National Labor Relations Act: Protections for Employee Concerted Activity

The National Labor Relations Act (NLRA) gives employees the right, among others, to unionize, to join together to advance their interests as employees, and to refrain from such activity. 29 U.S.C. § 151–169. The NLRA makes it unlawful for an employer to interfere with, restrain, or coerce employees in the exercise of their rights under the law, including their right to engage in concerted activity to advance their interests as workers. For example, employers may not respond to a union organizing drive by threatening, interrogating, or spying on pro-union employees, or by promising employees benefits for not participating in the union. But even when no union is involved, employers may not punish employees for banding together and speaking up in an effort to improve their working conditions.

Background

Congress enacted the NLRA in 1935 to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy. Among other things, Congress expressed an intent for the NLRA to address the “inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract and employers who are organized in the corporate … form[].” Congress found that this inequality of bargaining power between employees and their employers “substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.” 29 U.S.C § 151. Congress further determined that enacting legal protections for employees to “organize and bargain collectively” would have the effects of “encouraging practices fundamental to the friendly adjustment of industrial disputes arising out of differences as to wages, hours, or other working conditions, and…restoring equality of bargaining power between employers and employees.” Id.

Section 7: The Right to Self-Organize and Engage in Concerted Activity

Section 7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.” 29 U.S.C. § 157.

In general, the NLRA, therefore, gives employees the right to engage in both union and certain non-union activities aimed at improving working conditions. With respect to employee union rights, these include the right to attempt to form a union where none currently exists, or to decertify a union that the employees no longer support. Examples of employee rights relating to unions include: being fairly represented by a union; forming, or attempting to form, a union in the workplace; joining a union, regardless of whether the union is recognized by the employer; assisting a union in organizing fellow employees; and refusing to do any of these things.

Regardless of whether a union is involved, employees still have rights to band together and speak up about their working conditions. Section 7 of the NLRA guarantees this right to “engage in other concerted activities for the … mutual aid or protection” of fellow workers. 29 U.S.C. § 157. This right does not require a union. The NLRA therefore protects the rights of employees to engage in “concerted activity,” and this happens when two or more employees take action for their mutual aid or protection regarding the terms and conditions of their employment. It is also possible for a single employee to engage in protected “concerted activity” if she is acting on the authority of other employees, bringing group complaints to the employer’s attention, trying to induce group action, or seeking to prepare for group action. Id. Examples of protected concerted activities include: two or more employees addressing their employer about improving their pay; two or more employees discussing work-related issues beyond pay, such as safety concerns, with each other; or one employee speaking to an employer on behalf of one or more co-workers about improving workplace conditions. Id.

For more information about non-union concerted activities, the National Labor Relations Board (NLRB) publishes a protected concerted activity page, which includes descriptions of real-life concerted activity cases.

Section 8: Protections Against Interference with Concerted Activity

Section 8(a)(1) of the NLRA, among other things, prohibits employers from interfering with employees’ rights to engage in concerted activity. In short, this section makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the NLRA, including the right of employees to engage in concerted activities for their mutual aid or protection. 29 U.S.C. § 158. An employer therefore cannot terminate an employee for engaging in concerted activity protected by Section 7.

Concerted Activity and Social Media

The range of activity that constitutes concerted activity protected from employer interference can include employee interactions on social media. For example, in Three D, LLC d/b/a Triple Play Sports Bar and Grille v. N.L.R.B., 629 F. App’x 33 (2d Cir. 2015), an employee posted a Facebook status update protesting an employer’s purported failure to properly calculate tax withholding: “Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money . . . WTF!!!!” Another employee commented: “I owe too. Such an asshole.” Another employee “liked” the post. Based on these comments, the employer, Triple Play, terminated two of the employees. Id. at 36-37.

The NLRB determined that the employees’ comments were protected concerted activity, and therefore the terminations violated the NLRA. The Court of Appeals for the Second Circuit affirmed. The appeals court agreed with the NLRB that the employees’ Facebook comments were “protected concerted activity” because: (1) the comments were “concerted activity” because they were exchanged among current Triple Play employees; and (2) the comments were “protected” because they “concerned workplace complaints about tax liabilities, [Triple Play’s] tax withholding calculations, and [and emloyee’s]  assertion that she was owed back wages.” Id. at 36

Significantly, as explained in detail in this ABA article, the court’s finding of “protected concerted activity” alone did not mean the employer violated the NLRA by terminating the employees. Rather, the Court held, an employee’s right to engage in concerted activity “must be balanced against an employer’s interest in preventing disparagement of his or her products or services and protecting the reputation of his or her business.” Three D, LLC v. N.L.R.B., 629 F. App’x at 35. Therefore, an employee’s otherwise protected public comments may lose their Section 7 protection if they are “sufficiently disloyal or defamatory.” Id. (cites omitted). “These communications may be sufficiently disloyal to lose the protection of the [NLRA] if they amount to criticisms disconnected from any ongoing labor dispute.” Id. (cites omitted).

The court found the Triple Play employees’ comments were not “disloyal or defamatory” because they did not mention Triple Play’s products or services. Further, their Facebook comments were not “disconnected” from an ongoing labor dispute: they were directly connected to the employees’ dispute with Triple Play about the employer’s tax withholding calculations. The fact that the post at issue contained profanity did not alter this analysis, even though customers conceivably could have seen the profanity, as the court decided that disqualifying concerted activity from protection based on social media profanity would have an “undesirable result of chilling virtually all employee speech online.” Id. at 37.

The NLRB has published detailed guidance regarding the implications of social media activity on employee rights (and employer obligations) under the NLRA.

Process for Reporting Possible Violations of the NLRA

The National Labor Relations Board investigates possible violations of the NLRA, including the concerted activity provisions. For information about how to report a possible violation to the NLRB, and the NLRB investigation process, try this link.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Family and Medical Leave Act: Job-Protected Leave for Family and Medical Reasons

The Family and Medical Leave Act (FMLA) is a federal law that gives “eligible” employees of covered employers the right to take a limited amount of unpaid, job-protected leave for specified family and medical reasons. The FMLA entitles an employee on qualified leave to continued group health insurance coverage under the same terms and conditions as if she had not taken leave. Read the law at 29 U.S.C. § 2601, et seq.

Employee Eligibility Requirements

Subject to a pair of relatively uncommon exclusions, 29 U.S.C. § 2611(2)(B), and the employer coverage requirements, 29 U.S.C. § 2611(4), an employee is generally “eligible” for FMLA rights if the employee has (i) been employed by her employer for at least 12 months and (ii) worked at least 1,250 hours during the previous 12 months. 29 U.S.C. § 2611(2)(A). The employee also has to be employed at a worksite where 50 or more employees are employed by the employer within 75 miles of that worksite. 29 U.S.C. § 2611(2)(B).

Covered Employer Requirements

The FMLA applies to covered “employers” — that is, the law only requires employers who meet certain specified criteria to comply with its job-protected leave provisions. Under the FMLA, a covered “employer” is generally any person or entity engaged in any activity affecting commerce who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year. 29 U.S.C. § 2611(4)(A). This includes any “public agency”, as that term is defined in section 203(x) of the Fair Labor Standards Act, as well as the Government Accountability Office and the Library of Congress. 29 U.S.C. § 2611(4)(A)(iii), (iv). See also the covered employer regulations at 29 C.F.R. § 825.104.

FMLA Rights of Eligible Employees

The FMLA entitles eligible employees of covered employers to:

  • Twelve workweeks of leave in a 12-month period for any of the following, or any combination of the following:

 

A) the birth of a child and to care for the newborn child within one year of birth;

 

B) the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;

 

C) to care for the employee’s spouse, child, or parent who has a serious health condition;

 

D) a serious health condition that makes the employee unable to perform the essential functions of his or her job;

 

E) any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty” under 29 U.S.C. § 2611(14); or

  • Twenty-six workweeks of leave during a single 12-month period to care for a “covered servicemember,” 29 U.S.C. § 2611(15), with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin. This form of leave is commonly known as military caregiver leave.

29 U.S.C. § 2612(a)(1); §§ 2612(a)(3) & 2613 (military caregiver leave).

The law generally entitles an employee, upon returning from bona fide FMLA leave, to return to (A) the position she held when the leave commenced, or (B) an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment. 29 U.S.C. § 2614(a)(1).

Maintenance of Employee Benefits During Leave

During any FMLA leave, an employer must generally maintain the employee’s coverage under any group health plan (as defined in the IRS Code at 26 U.S.C. § 5000(b)(1)) on the same conditions as coverage would have been provided if the employee had been continuously employed during the entire leave period. 29 C.F.R. § 825.209(a); 29 U.S.C. § 2614(a)(2).

Serious Health Condition Defined

In order to qualify for FMLA leave for a “serious health condition” under section 2612(a)(1)(D), the employee must have an illness, injury, impairment, or physical or mental condition that involves either (A) inpatient care in a hospital, hospice, or residential medical care facility; or (B) continuing treatment by a health care provider. 29 U.S.C. § 2611(11).

The FMLA’s implementing regulations, located at 29 C.F.R. § 825, discuss the law’s “serious health condition,” “inpatient” care,” “continuing treatment,” “health care provider,” and other requirements in detail.  

Employer Notice Requirements

The FMLA requires employers to inform eligible employees about their rights and responsibilities under the law. See 29 C.F.R. § 825.300. For example, employers must post conspicuous notices explaining the FMLA’s provisions and providing information concerning the procedures for employees to filing complaints of violations of this law with the Department of Labor’s Wage and Hour Division. The notice must be posted prominently where it can be readily seen by employees and applicants for employment. 29 C.F.R. § 825.300(a).

In addition to providing the general notice, employers must also notify employees about their eligibility status, rights, and responsibilities under the FMLA. Employers must also inform employees whether their specific leave is designated as FMLA leave and explain the amount of time that will count against their FMLA leave entitlement. See 29 C.F.R. § 825.300.

The FMLA also generally requires employees to timely notify employers in advance when they need to take FMLA leave. The law’s implementing regulations at 29 C.F.R. §§ 825.302, 303, and 304 discuss the employee notice requirements in detail. Here is a fact sheet from WHD with some general guidance about employee notice responsibilities.

Interference Prohibited

The FMLA prohibits employers from interfering with employees’ FMLA rights. This means an employer cannot interfere with, restrain, or deny an employee from exercising or attempting to exercise the rights provided by this law. 29 U.S.C. § 2615(a)(1).

Retaliation Prohibited

The FMLA also prohibits employers from retaliating against employees because they exercise or try to exercise FMLA rights. In other words, an employer cannot discharge or in any other manner discriminate against any individual for opposing any practice made unlawful by the FMLA, or for participating in any proceedings or inquiries under this law. 29 U.S.C. § 2615(a)(2) & (b).

For example, the law’s anti-interference and anti-retaliation provisions generally prohibit employers from refusing to authorize FMLA leave for an eligible employee; discouraging an employee from using FMLA leave; manipulating an employee’s work hours to avoid responsibilities under the FMLA; using an employee’s request for or use of FMLA leave as a negative factor in employment actions, such as hiring, promotions, or disciplinary actions; or counting FMLA leave under “no fault” attendance policies.

Enforcement

Unlike many employment laws, the FMLA is not enforced by the Equal Employment Opportunity Commission. Employees may, therefore, seek to vindicate their FMLA rights in court without first filing administrative charges with EEOC. However, in some cases employees whose FMLA rights have been violated may also have viable claims under the Americans with Disabilities Act (ADA). The EEOC enforces the ADA, and therefore employees must submit their ADA claims to the EEOC and receive suit rights before taking those claims to court.

The Department of Labor’s Wage and Hour Division administers and enforces the FMLA for all private, state and local government employees, and some federal employees. The Wage and Hour Division investigates complaints, and also publishes resources, general guidance, and helpful fact sheets about various aspects of this law. In general, an FMLA action must be brought within two years from the date of the alleged violation. See 29 U.S.C. §2617(c).

Remedies

An employer who violates an employee’s FMLA rights may be required to compensate the employee for lost wages, benefits, or other compensation, or other actual monetary losses, caused by the violation, plus interest on that amount. 29 U.S.C § 2617(a)(1)(A). The employer may also have to pay the employee additional “liquidated damages” in an amount equal to the sum of the economic losses and interest recovered. Id. In other words, the employer could have to pay the employee twice what the employee lost. The FMLA also authorizes courts to order equitable relief, such as employment, reinstatement, or promotion, to remedy violations. 29 U.S.C. § 2617(a)(1)(B). The law also provides that an employee who obtains a judgment may recover from the employer her litigation costs, reasonable attorney’s fees, and reasonable expert witness fees. 29 U.S.C. § 2617(a)(3).

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Griggs v. Duke Power: Disparate Impact Without Discriminatory Intent

The Supreme Court’s decision in Griggs v. Duke Power Company, 401 U.S. 424 (1971), addressed the Title VII issues created by employer policies that are facially neutral, but which adversely impact employees on the basis of race, sex, or religion. In short, the Griggs Court decided that where an employer uses a neutral policy or rule, or utilizes a neutral test, and this policy or test disproportionately affects minorities or women in an adverse manner, then the neutral rule or test violates Title VII unless the employer proves it is justified by “business necessity.”

Summary

Title VII of the Civil Rights Act of 1964 prohibits employers from treating employees differently because of their race, sex, or religion. This means, obviously, that an employer cannot refuse to hire an applicant because of the applicant’s race. But sometimes employers may implement policies, or require applicants to take tests, that work to disadvantaged members of one sex, race, or religion over others — even though the employer may not have intended the policy or test to have that effect. For example, in Griggs, Duke Power had a policy that required employees in all but its lowest-paying jobs to have a high school diploma or pass “intelligence” tests. There was no evidence Duke Power intended this policy to discriminate against minority workers. The employees in Griggs argued this policy violated Title VII because it disproportionately impacted black workers.

The Griggs Court reasoned that Congress designed Title VII to address the consequences of employment practices and not just the employer’s motivation. Therefore, a neutrally-worded employment policy or test that has the effect of disproportionately impacting employees of one sex, race, or religion, may be unlawful under Title VII even if the employer did not intend that policy or test to be discriminatory in that way. The Griggs decision made it possible for employees to challenge employment practices that disadvantage certain groups if the employer cannot show the policy is justified by business necessity and paved the way for the Civil Rights Act of 1991, which codified the “disparate impact” theory of discrimination endorsed by Griggs.

Facts

Before Congress passed the Civil Rights Act of 1964, Duke Power intentionally discriminated against African-American employees by only allowing these employees to work in the company’s low-paying labor department. In 1955, the company implemented a policy requiring potential employees to have a high school diploma before they could work in any department except for the labor department. After the Civil Rights Act went into effect in 1965, Duke Power extended this policy to block employees who had not graduated high school from transferring or being promoted from its labor department to other departments within the company. Duke Power later amended this policy to allow employees who had not graduated high school to transfer from labor to other departments provided they were able to garner certain scores on “intelligence” tests. Here’s an article about the history behind this case.

Griggs filed a class action on behalf of twelve African American employees, claiming this diploma/testing policy violated Title VII by disproportionately impacting black workers. The case did not involve evidence that Duke Power intended its policy to harm black workers. The issue, then, was whether an employer’s facially neutral policy or test could violate the anti-discrimination provisions of Title VII on the grounds that the policy had the effect of disadvantaging minority workers.

Procedural Posture

The trial court dismissed the complaint. Griggs appealed. The Fourth Circuit affirmed in part, reversed in part, and remanded, holding that in the absence of a discriminatory purpose, Duke Power’s policy requiring a high school diploma or passing an “intelligence” test as a condition of employment was lawful under the Civil Rights Act. The Fourth Circuit, therefore, rejected Griggs’ claim that because Duke Power’s policy operated to render ineligible for employment a disproportionately high number of minority workers, the policy violated Title VII’s anti-discrimination provisions unless the employer proved the policy was job-related.

The Court’s Decision

The Court reversed. It held that Title VII prohibited Duke Power from requiring employees to produce a high school diploma or pass an “intelligence” test as a condition of employment, because Duke Power failed to show that these standards were significantly related to successful job performance, and both requirements operated to disqualify minority workers at a substantially higher rate than white applicants. The Court also observed that the jobs in question formerly had been filled only by white employees as part of Duke Power’s long-standing practice of giving preference to whites.

The Court pointed out that Congress’ objective for Title VII was to “achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees.” 401 U.S. at 429–30. Therefore, under Title VII, “practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to ‘freeze’ the status quo of prior discriminatory employment practices.” Id. at 430. Intent is not dispositive. Title VII requires “the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification.” Id. at 431.

The critical point here was the Court’s understanding that “good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to measuring job capability.” Id. at 432; see also Civil Rights Act of 1964, §§ 701 et seq., 703(a) (2), (h), 42 U.S.C. §§ 2000e et seq., 2000e–2(a) (2), (h). Title VII “proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation.” 401 U.S. at 431.

After all, Congress intended Title VII to address “the consequences of employment practices, not simply the motivation.” Id. at 432. More than that, Title VII places on the employer “the burden of showing that any given requirement must have a manifest relationship to the employment in question.” Id. Therefore, an employer’s facially-neutral policy or test can violate the anti-discrimination provisions of Title VII if the policy has the effect of disadvantaging minority workers, and the employer fails to prove the policy or test is justified by “business necessity.” Id. at 431. “If an employment practice which operates to exclude [minority workers] cannot be shown to be related to job performance, the practice is prohibited.” Id.

Analysis

After Griggs, a neutrally-worded employment policy or test that has the effect of disproportionately impacting employees of one sex, race, or religion, may be unlawful under Title VII even if the employer did not intend that policy or test to be discriminatory in that way. The Griggs decision made it possible for employees to challenge employment practices that disadvantage certain groups if the employer cannot show the policy is justified by business necessity. Griggs also paved the way for the Civil Rights Act of 1991 (text here) which codified the “disparate impact” theory of discrimination endorsed by Griggs. In contrast to disparate treatment cases, which often turn on evidence of the employer’s intent, disparate impact cases commonly use statistical analyses to assess whether an employer’s policy or test runs afoul of Title VII by disproportionately harming employees of a certain race(s), sex, or religion.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.