5th Circuit Holds (Again) Title VII Does Not Protect Sexual Orientation; SCOTUS to Decide Ultimate Issue 2019-04-26T10:54:32-06:00

Posted on April 26, 2019

Last week, the Fifth Circuit held firm in its position that “Title VII in plain terms does not cover ‘sexual orientation.’” In a slightly different iteration, plaintiff sued her former employer alleging that defendant had discriminated against her because she identifies as heterosexual and retaliated against her after she opposed the alleged discrimination. The district court dismissed the plaintiff’s complaint for failure to state a claim under Title VII and other state laws. The Fifth Circuit affirmed.

While employers in multiple jurisdictions have been left to deal with the Circuit split on this issue, the Supreme Court recently announced that it would weigh in during its next term. On April 22, 2019, SCOTUS stated it would review cases from the Second, Sixth, and Eleventh Circuits, all of which concern whether Title VII prohibits discrimination based on sexual orientation.

O’Daniel v. Indus. Serv. Solutions, Case No. 18-30136 (5th Cir. April 19, 2019).

SCOTUS Restricts Class Arbitrations 2019-04-24T11:30:51-06:00

Posted on April 24, 2019

By John Alan Doran

In yet another pro-arbitration, employer-friendly decision, the U.S. Supreme Court ruled this morning that an individual cannot pursue claims in arbitration on behalf of a class unless the arbitration clause involved clearly and unequivocally permits class treatment of claims. Lamps Plus v. Varela, 17-988 (April 24, 2019).

Varela worked for Lamps Plus when a hacker successfully obtained tax information from Lamps Plus for some 1,300 employees, including Varela. Varela filed a class action in federal court. Lamps Plus moved to compel arbitration under Varela’s employment agreement, which included mandatory arbitration. The District Court compelled arbitration, but did so on a class basis, forcing Lamps Plus to defend Varela’s entire class action in an arbitral forum, rather than simply defending Varela’s own personal claim. The Ninth Circuit predictably upheld the District Court’s ruling, concluding that because Varela’s arbitration agreement was ambiguous with respect to class arbitration, the agreement must be construed against Lamps Plus and class arbitration must be inferred.

In a 5-4 decision, the Supreme Court reversed the decisions below. The Court criticized the Ninth Circuit for applying California contract law doctrines that undermine the powerful presumption that parties are bound to arbitrate only in the manner to which they specifically agreed. The Court noted the significant problems posed by class-wide arbitration, most of which undermine the very purposes of arbitration in the first place. Against this background, the Court held that parties to an arbitration agreement can only be forced into arbitration of class claims when the arbitration agreement unambiguously provides for class arbitration. Neither silence nor ambiguity on the subject will suffice to infer the parties’ agreement to class arbitration.

At a time when Congress, many states (especially California, over, and over, and over…), the media, and some large employers are questioning the future viability of mandatory arbitration outside the collective bargaining setting, our Supreme Court continues to emphasize the values of, and strong federal policy favoring arbitration agreements. Lamps Plus stands for the proposition that a court cannot infer consent to class arbitration when an arbitration agreement is silent or ambiguous on the topic. That being said, employers can avoid the question altogether by simply prohibiting class claims in their arbitration agreements.

NLRB Reins In Prior Expansive View Protected Concerted Activity 2019-04-19T17:00:24-06:00

Posted on April 19, 2019

By John Alan Doran

“So, two guys walk into a bathroom…” No, seriously, this case is about two co-workers who walked into a bathroom. While in the bathroom, Employee A complained to Employee B that a former client had been dropped back in his lap, and that the former client should have been sent to someone else and “quit wasting his ***ing time.” Employee B stated that he understood the frustration. As bad luck would have it, a supervisor overheard the bathroom conversation, reported it to management, and Employee A was ultimately discharged.

An Administrative Law Judge (“ALJ”) found the conversation constituted protected concerted activity under Section 7 of the NLRA. The ALJ first found that Employee A’s complaint involved common concerns regarding their employment. The ALJ then found that Employee B’s statement of commiseration was “vocalized support” of Employee A’s supposed call to collective action. The ALJ then found that Employee A’s whining had the unstated goal of collective action because the employer failed to call Employee B to disprove this conclusion. This bizarre conclusion was based on the NLRB’s adverse inference rule, which allows an ALJ to make adverse inferences against the employer when it fails to call a witness that would be expected to support the employer’s defense.

The NLRB made short shrift of the entire ALJ analysis. First, the NLRB reminded us that protected concerted activity is only protected when it is work-related and made with an eye toward collective action among workers. Here, there was zero evidence that the bathroom whining was intended to instigate any sort of collective behavior. Second, the NLRB chastised the ALJ’s adverse inference; because Employee B was, by definition, adverse to the employer, the ALJ was not permitted to make any adverse determination against the employer simply because the employer did not call the witness. Over the years, the NLRB has artificially expanded the notion of what is protected concerted activity under the Act. It seemed that any comment about work made from one employee to another fell within the Act’s protections. But the NLRB has now made clear that protected concerted activity does not encompass every single workplace gripe or statement of exasperation; Section 7 protects only those statements that relate to the terms and conditions of employment, and only when the proven purpose of those statements is to incite others to action. The case is Quicken Loans, Inc., Case 28-CA-146517 (April 10, 2019).

Employer’s Reasonable Belief Is No Pretext 2019-04-11T11:03:29-06:00

Posted on April 11, 2019

By Beth Ann Lennon

Did the car hit the employee or the employee hit the car? This is not the beginning of a logic problem – it’s the question one employer recently encountered when investigating a “he-said, he-said” workplace dispute. Based on the investigation, the employer determined that the employee had lied about the contact with a company vehicle that left the employee bruised. The employer terminated the bruised employee and not the driver. The employee, of course, sued. The Tenth Circuit affirmed what should be obvious but somehow repeatedly becomes an issue in so many cases – can an employer terminate an employee if the employee disputes the allegations against him? So long as the employer (not the employee) “reasonably believed at the time of the termination that the [employee] had violated company policy” and the employer “acted in good faith upon that belief” the answer is an unequivocal yes. “Pretext” is not proven by an employee’s continued insistence that his employer should have believed him over another employee. Even if the employer “got it wrong,” being wrong on a fact dispute during an investigation is not evidence of discrimination. Another reminder of the importance of effective, and well documented, investigations.

Montoya v. Jacobs Technology, Inc., No. 18-2098 (10th Cir. April 9, 2019)

In a Goldilocks-Esque Decision, the Eleventh Circuit Finds a “Similarly Situated in all Material Respects” to Be Just Right 2019-04-01T14:04:55-06:00

Posted on April 1, 2019

By Amy Knapp

What does it mean within the context of the McDonnell Douglas burden-shifting framework for a plaintiff to show she was treated less favorably than other “similarly situated” individuals? The U.S. Court of Appeals for the Eleventh Circuit has cleared up this oft-debated aspect of a plaintiff’s prima facie burden in Lewis v. City of Union City by holding that “similarly situated” means “similarly situated in all material respects.” On March 21, 2019, sitting en banc and ruling in favor of an employer on summary judgment, the Eleventh Circuit nixed other “similarly situated” standards and instead espoused its new “similarly situated in all material respects” standard. This new standard, and the Court’s application of it, is a big win for employers, but it leaves open questions about what aspects for comparison are indeed “material.”

In this case, the plaintiff argued for the Seventh Circuit’s approach, which finds employees to be “similarly situated” so long as the distinctions between them are “not so significant that they render the comparison effectively useless.” The Eleventh Circuit rejected this approach, calling it “too lax,” and explained that, if adopted, it would eliminate the “apples-to-apples” comparison required to determine if an employer has engaged in discrimination. The employer argued for a “nearly identical” standard, which the court rejected as “too strict.” In the real word, true doppelgangers are rare, and, moreover, exact correlation isn’t necessary to show discrimination.

Thus, rejecting standards that were too lax and too strict,, the Court created a middle ground and put forth the “similarly situated in all material respects” standard. Under that standard, ordinarily, a similarly situated employee will have some key similarities to the plaintiff, including: (1) having engaged in the same basic conduct (or misconduct); (2) having been subject to the same employment policy, guidelines, or rule; (3) will (typically) have worked for the same supervisor; and (4) will share the plaintiff’s employment or disciplinary history. Notably, the Court explained that the comparator need not have the same job title or precisely the same job functions.

The Court’s new standard, and particularly its application of that standard, is a significant win for employers (at least those in the Eleventh circuit, where Alabama, Georgia, and Florida sit). However, what is and is not a “material” basis for comparison will always be a moving target; it will depend on the facts of the case and on how broadly or narrowly a court views each factor. But, at least now employers have some guideposts.

DOL Proposes Revamp of the “Regular Rate” 2019-04-01T10:41:18-06:00

Posted on April 1, 2019

By James Korte

The DOL continues to issue proposed rules to “modernize” the FLSA. The latest proposal, if finalized, would clarify and update the requirements for how employers calculate the “regular rate” of pay. The “regular rate” is the hourly rated used to calculate the overtime premium pay for non-exempt employees. The proposal:

provides more specific examples of exclusions from the “regular rate,” including exclusions for health and wellness programs, tuition benefit programs, and employee discounts on goods and services, among others; and
clarifies rules regarding “show up,” “call-back” pay, and paid meal breaks during which no work is performed.

Finally, the proposal increases the safe harbor for small nondiscretionary bonuses. Ordinarily, a nondiscretionary bonus has to be factored into the hourly rate for all the weeks during which it was earned. With the proposed rule, employers may skip this calculation if the additional overtime pay for the week would be less than 40% of the federal minimum wage.

The full proposal can be found here. The proposal is a win-win for both employers and employees, updating examples for employers with modern wage plans. The proposed rulemaking is not final and the DOL is taking public comments on the proposed regulation changes. For anyone would like to respond to the DOL’s proposals, comments will be accepted electronically or by mail. The instructions can be found at http://www.regulations.gov/

Posted on April 26, 2019

Posted on April 24, 2019

Posted on April 19, 2019

Posted on April 11, 2019

Posted on April 1, 2019

Posted on April 1, 2019

Email Disclaimer

Email Disclaimer