Yesterday, the Supreme Court took a major step toward resolving one of the hottest issues in labor law today—the legality of the NLRB’s actions and decisions in light of certain questionable appointments to the NLRB by the Obama Administration in 2012. The Supreme Court agreed to hear the Obama Administration’s appeal of the Noel Canning decision out of the D.C. Circuit Court of Appeals. The Noel Canning decision called into question the legality of literally hundreds of NLRB decisions by holding that the President’s “recess appointments” to the NLRB did not occur during a genuine recess, and were therefore invalid. If these recess appointments were unlawful (because they did not receive the advice and consent of the Senate), then the Board’s decisions are unlawful because it was operating without an actual quorum, and the Supreme Court previously ruled in the New Process Steel case in 2011 that the Board lacks legal authority to issue rulings and make rules when it lacks a quorum. The Supreme Court will hear the Noel Canning case next term. Until then, all of the Board’s recent decisions are up in the air.
By Bill Wright
The Supreme Court has addressed the standard courts should apply to determine whether an employer violates Title VII’s anti-retaliation provision. Because of a statutory amendment in 1991, courts apply a “motivating factor” test for Title VII discrimination based on race, color, national origin, sex, and religion. The anti-retaliation provision however is in a separate section of Title VII, and the Supreme Court has decided to apply the traditional test: retaliatory animus is not the “cause” of the materially adverse action if the materially adverse action would have occurred without the animus. This is what the courts call “but-for” causation. The adverse action would not happen but for the retaliatory animus. University of Texas Southwestern Medical Center v. Nassar, No. 12-484 (U.S. June 24, 2013).
In reaching this conclusion, the Court found the EEOC’s position on this issue to be unpersuasive. The EEOC failed to appreciate the “interplay” among statutory provisions on status-based discrimination, the motivating-factor amendment, and the anti-retaliation provision.
By Bill Wright
A federal district court in Arizona was a little short with an employer seeking to dismiss a disability discrimination claim at the very beginning of a lawsuit. The former employee, who stands 4’ 10”, sued for discrimination and harassment based on various protected statuses. The only status to survive the employer’s motion to dismiss was “disability” under the ADA, based on the employee’s below-“normal” height. The first issue of course was whether her height was an “impairment” under the ADA. The court acknowledged that “[h]eight is . . . not a typical impairment,” but would not go so far as to conclude that height could never, under any circumstances, be a disability. The employer and the plaintiff will have to wait through discovery to see whether the height outside the “normal” range is a disability in this particular instance. McElmurry v. Arizona Depart. Of Agriculture, No. CV-12-02234-PHX-GMS (D. Ariz. June 11, 2013).
By Bill Wright
In a much-anticipated case the U.S. Supreme Court today reached a decidedly unremarkable conclusion. The gist of the U.S. Supreme Court’s new decision on class action arbitration agreements is old hat—courts may overturn an arbitrator’s decision under the Federal Arbitration Act only if the arbitrator acts outside the authority granted in the agreement. Here, the arbitrator’s decision itself is the interesting part. The arbitrator interpreted the following language: “No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration . . . .” The arbitrator (twice) found this language permitted the contractor to bring a class action. As summarized by the Supreme Court, the arbitrator reasoned (a) the agreement sent to arbitration the same set of “disputes” that it barred the parties from bringing as civil actions; (b) class action is one possible “form” of civil action; therefore, (c) class arbitrations can be maintained. The Supreme Court carefully avoided endorsing the arbitrator’s reasoning; after all, the arbitrator does shift, without explanation, from the substance of the dispute (i.e. whether a health plan failed to pay the claimant for his services under the contract) to the “form” of civil actions barred from court. Oxford Health Plans LLC v. Sutter, No. 12-135 (U.S. June 10, 2013).
If you are drafting an arbitration agreement and want to avoid class action arbitration, be clear about forbidding class actions or preserve arbitrability questions for the court. Here the contracting parties failed to do either.
Title VII defines “employee” as “an individual employed by an employer,” leaving the courts to square the circular definition. Some U.S. courts of appeals have adopted the common law/ economic realities test to determine whether a volunteer is really an “employee.” This test focuses on who controls the work and who has financial risk as a result of the arrangement. Because the putative employer “controls” the work of volunteers as well as employees, this test seems like the wrong one to use. Other courts of appeals require a volunteer to show that the employer paid the volunteer a salary or wage or provided the volunteer with significant indirect benefits before the court will consider the common law/ economic realities test. Indirect benefits might include pensions, life insurance policies, disability benefits, health insurance, and other employment-like benefits.
In a recent decision, the Fifth Circuit concluded that a volunteer firefighter was not an “employee” because the fire district neither paid her a salary or wages nor provided her with significant employment-like benefits. Juino v. Livingston Parish Fire District No. 5, No. 12-30274 (5th Cir. May 30, 2013). As a result, the court affirmed summary judgment for the fire district on the plaintiff’s sexual harassment claims.
When are volunteers not really volunteers? When they are in it for the money.
By Emily Keimig
The Fifth Circuit Court of Appeals held recently that terminating an employee because she is lactating or expressing milk is unlawful under Title VII and the Pregnancy Discrimination Act (“PDA”). EEOC v. Houston Funding II, No. 12-20220 (5th Cir. May 30, 2013)
In this case, an employee took leave of absence to have a baby. During her leave, she spoke to her supervisor frequently and, during one conversation, she asked whether she could use a breast pump at work upon her return. Her supervisor posed the question to one of the company owners, who responded with a “strong ‘NO’” and a suggestion that perhaps she should stay at home longer. Upon her release to return to work, the employee asked again whether she could use a back room to pump milk, but the employer told her she had been discharged.
The district court ruled that termination based on lactation or breast pumping was not sex discrimination and that lactation was not a medical condition of pregnancy. The Court of Appeals, however, reversed course, concluding that “lactation is a related medical condition of pregnancy for purposes of the PDA.”
This case was not about accommodating a request to breast feed; it was about disparate treatment based on an employee’s lactation. Reasonable, legal minds differ, as evidenced by the very different result in the district and appellate courts. In the end, though, the Fifth Circuit ruled that termination for lactation is sex discrimination.
By Bill Wright
In the absence of a tangible employment action, employers may raise a Faragher-Ellerth defense to a claim of sex harassment. In a recent case, the employer obtained summary judgment on the defense because the alleged victim of harassment refused to tell the employer’s investigators any details about the harassment. The victim told Human Resources that her supervisor had done something “horrific” and when asked directly whether the harassment included a sexual advance, she nodded. Other than that, she refused to provide any details. The employer investigated anyway, interviewing the alleged harasser and other possible witnesses, without discovering any facts about the alleged harassment.
When the lawsuit came, the court granted the employer summary judgment because of the plaintiff’s unreasonable failure to use the employer’s complaint procedure. Stephanie Crockett v. Mission Hospital, Inc., No. 12-1910, (4th Cir. May 30, 2013). Even the best investigators need something more to go on than “horrific”, and apparently a wink and a nod isn’t that “something more”, at least in the Fourth Circuit Court of Appeals.
By Ted Olsen
Most of the time, employers don’t intend offer letters to cover all the material subjects about the employment relationship. After an offer has been accepted, new hires are asked (i.e., required) to sign lengthier and more formal documents. A recent case illustrated how an employer should clarify that an offer letter is not the complete employment agreement. Pulse Technologies Inc. v. Notaro, No. 6-MAP 2012 (Pa. May 29, 2013).
In Pulse Technologies, an engineer quit to take an equivalent position with a competitor. His former employer tried to stop the engineer from starting the new job by enforcing a non-compete covenant in an employment agreement with the engineer. The engineer argued that he had no non-compete because his offer letter described his position, duties, salary, benefits and other employment terms, but did not mention any restrictive covenant. The non-compete only appeared in a longer document he had to sign on the first day of employment.
After two conflicting decisions from lower courts, the Pennsylvania Supreme Court ruled that the offer letter was not the effective agreement, but was basically part of the negotiation process. The employer had wisely warned in the offer letter that the employee would be required to “sign an employment agreement with definitive terms and conditions outlining the offer terms and conditions contained herein.” Consistent with that notice, the employee – without objection – signed the comprehensive employment agreement with the non-compete covenant on the first day of work.
Before the curtain rises on a dispute with a departing employee, consider whether your offer letters are meant to define the terms of employment. If not, let the employee know up front that there are more features to come on the first day of employment.