Ninth Circuit - Inconsistency Costs Employer Summary Judgment

So, the Ninth Circuit in Earl v. Nielsen Media Research reversed summary judgment in an age discrimination case.  Earl violated several company policies over time. She was placed on a Development Improvement Plan and ultimately was fired.  As she was nearly 60, she claimed age discrimination motivated her discharge.

The Ninth Circuit reversed summary judgment.  Earl showed that younger employees violated the same policies without getting fired.  Because they were sufficiently similar employees (same positions, same policy violations), they were adequate to satisfy the "similarly situated" requirement for comparing employees.  When you read this case, you will know why we management side lawyers always preach consistency.

The court's second point was that the employer did not apply a performance improvement plan to plaintiff Earl, which they had done for other employees. The court rejected the company's argument that it employed people "at will" and could deviate from the progressive discipline system.

Earl was terminated after receiving a single DIP. She never received a PIP, a much more serious warning. Earl has presented evidence that in terminating her without first issuing a PIP, Nielsen deviated from its normal internal disciplinary procedure. In May 2006, Nielsen did not terminate employee 46432, a younger recruiter, even though he had extremely serious performance issues, because he had received only a DIP. In an email exchange with other company officials, Bob Burns wrote: “As much as it sounds reasonable to terminate him without a PIP, it would not be consistent with our procedure.” Employee 46432 was eventually terminated, but only after issuance of a PIP.

Thus, the court found that the company's insistence on a PIP for a younger employee in the name of consistency raised a factual question regarding the company's willingness to forgo the PIP re Earl. It is unclear whether the company tried to show the court there were a variety of employees of a variety of ages who had received and not received PIPs.  If so, perhaps the employer would not have lost this point.

If your organization uses PIPs and other progressive discipline, it is important to understand that if you make an exception, you risk a claim of disparate treatment unless you can explain why employees who receive different treatment are not similarly situated. It also is important to ensure that progressive discipline is not applied differently to different protected individuals.

The opinion is Earl v. Nielsen Media Research, Inc. and the opinion is here.

DGV

Court of Appeal on Discovery of Co-Workers' Files in Discrimination Cases

The appellate courts rarely get involved in discovery issues. It's usually up to the trial courts and parties to fight about what is relevant, what is a privacy issue, etc. So, guidance from the Court of Appeal is a welcome development.

Timothy Joyce sued his former employer, Life Technologies Corporation (LTC), for age discrimination and retaliation. In essence, Life Technologies merged with Joyce's former employer and he was laid off. He alleged that he was on a hit-list of over 40 employees, and that he was set up for termination, among other things.

In litigation, Joyce sought through interrogatories data about co-workers including:

(a) The names of all employees terminated during a two-year period, November 1, 2008 to June 28, 2010. 

(b) The department each worked for when terminated. 

(c) The date of termination. 

(d) The age of each at termination. 

(e) The reason for termination. 

(f) Whether severance benefits were offered.

(g) Whether offered severance benefits were accepted. 

(h) A description of any offered severance benefits. 

(i) A detailed explanation of reasons for any failure to offer severance benefits. 

(j) The identity (including name, address and telephone number) of all former Applied Biosystems employees still employed by LTC after the RIF. 

(k) Whether the terminated employees were former employees of Appelera or Applied Biosystems.

LTC and Joyce became involved in a discovery dispute, which resulted in a trial court order granting access to the information, but requiring the parties to first send a letter to employees notifying them of the proposed disclosure. the information would be disclosed unless the employees at issue filed a motion for protective order.  The court of appeal noted that there was no provision for protection of the information and no "opt-out" other than via a formal motion. 

The court first noted that statistical information could be relevant to a disparate impact claim and that the RIF provided for the requisite facially neutral practice.  Joyce also wanted the data for a disparate treatment claim, i.e., intentional discrimination.  The court of appeal pointed out that statistical evidence is far less important in disparate treatment cases:

Statistical evidence may also be utilized in a disparate treatment case. However, because discriminatory intent must be shown in such a case, statistical evidence must meet a more exacting standard. “[T]o create an inference of intentional discrimination, statistics must demonstrate a significant disparity and must eliminate nondiscriminatory reasons for the apparent disparity. Aragon [v. Republic Silver State Disposal Inc. (9th Cir. 2002) 292 F.3d 654, 663 (Aragon) (finding that statistics unsupported by other probative evidence of discrimination was insufficient to show pretext and to demonstrate discrimination); see also Coleman v. Quaker Oats Co. (9th Cir. 2000) 232 F.3d 1271, 1283 (holding that to raise a triable issue of fact regarding pretext based solely on statistical evidence, the statistics „must show a stark pattern of discrimination unexplainable on grounds other than age‟); United States v. Ironworkers Local 86 (9th Cir. 1971) 443 F.2d 544, 551, fn. omitted] . . . (holding that use of statistical evidence „is conditioned by the existence of proper supportive facts and the absence of variables which would undermine the reasonableness of the inference of discrimination which is drawn.‟).” (Gratch v. Nicholson (N.D.Ca. 2005, No. C04-03028 JSW) 2005 WL 2290315, *4.) 

Thus, “[a]lthough use of statistics is permissible [in a disparate treatment case], statistical evidence „rarely suffices to rebut an employer‟s legitimate, nondiscriminatory rationale for its decision to dismiss an individual employee.‟ Aragon[, supra, at p. 663, fn. 6.] . . . [T]his is so because „in disparate treatment cases, the central focus is less on whether a pattern of discrimination existed [at the company] and more how a particular individual was treated and why. As such, statistical evidence of a company‟s general hiring patterns, although relevant, carries less probative weight than it does in a disparate impact case.‟ [Ibid., citing LeBlanc v. Great Amer. Ins. Co. (1st Cir. 1993) 6 F.3d 836, 848-49.]” (Gratch v. Nicholson, supra, at p. *4, fn. 4.)

The court therefore found that at least some of the information sought would be arguably relevant to Joyce's claims. But the court then turned to privacy analysis.  

The court held that Joyce had made no showing that the identities, addresses and other private information of co-workers, particularly those who were not contended to be witnesses to any discriminatory conduct against Joyce, were sufficiently "needed" to overcome the individuals' privacy interests.  The court distinguished the "class action" discovery cases because the identities of class members are really the identities of potential witnesses, and because of the specific issues that arise in class certification proceedings.

Significantly, the court pointed out that there was no reason why statistics could not be developed without disclosure of individuals' personal information, absent a showing that LTC would provide unreliable data without giving out names and addresses, etc.  Joyce also failed to adequately demonstrate the need for the breadth of information he sought. 

The court also criticized the court's order because it placed too high a burden on objecting employees.  The court noted that if the information had been subpoenaed, a simple objection by the third party could stop the disclosure, rather than a formal motion.  Also, the court would have permitted the plaintiff to send out a notice to third parties, thereby requiring disclosure of names and addresses before the employees had a chance to object.

Finally, the trial court did not put any safeguards in place regarding the use or custody of the needed information via a suitable protective order.

Disputes such as these are common in employment law.  Therefore, when "meeting and conferring," lawyers may use this case to limit disclosure of private personnel information absent a sufficient showing of need, and ensure that private information is kept that way during and after litigation.

The opinion is Life Technologies Corporation v. Superior Court and the opinion is here.  

Court of Appeal Clarifies "Alter Ego" Liability for Employment Claims

Cooper was the sole shareholder and day to day operator of Auburn Honda, a corporation. A group of former employees sued Auburn Honda and Cooper for age discrimination and other things.  Cooper moved for summary judgment on the ground he could not be held liable, since only the employer is liable for employment discrimination. The plaintiffs argued Cooper indeed was the employer as an "alter ego" of the corporation.

The court did not permit the plaintiffs to claim Cooper was the alter ego of Auburn in opposition to the motion for summary judgment. So, small business owners, here is the discussion of application of the alter ego doctrine to a shareholder:

To succeed on their alter ego claim, plaintiffs must be able to show: (1) such a unity of interest and ownership between the corporation and its equitable owner that no separation actually exists, and (2) an inequitable result if the acts in question are treated as those of the corporation alone. (Sonora Diamond, supra, 83 Cal.App.4th at p. 538.)


Several factors are to be considered in applying the doctrine, among them are: “„[c]ommingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses; . . . the treatment by an individual of the assets of the corporation as his own; . . . the failure to obtain authority to issue stock or to subscribe to or issue the same; . . . the holding out by an individual that he is personally liable for the debts of the corporation; . . . the failure to maintain minutes or adequate corporate records . . .; sole ownership of all of the stock in a corporation by one individual or the members of a family; . . . the failure to adequately capitalize a corporation; the total absence of corporate assets, and undercapitalization; . . . the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation; . . . the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities; . . . the disregard of legal formalities and the failure to maintain arm's length relationships among related entities; . . . the use of the corporate entity to procure labor, services or merchandise for another person or entity; . . . the diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another; . . . the contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of a corporation as a subterfuge of illegal transactions; . . . and the formation and use of a corporation to transfer to it the existing liability of another person or entity.‟ . . . [¶] This long list of factors is not exhaustive. The enumerated factors may be considered „[a]mong‟ others „under the particular circumstances of each case.‟" (Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft, LLP (1999) 69 Cal.App.4th 223, 249-250, quoting Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 838-840.)

So, the court held that Cooper did not qualify as an alter ego under this list of factors because the Plaintiffs did not bring forth sufficient evidence.

The case is Leek v. Cooper and the opinion is here.

U.S. Supreme Court Grabs Cat's Paw

There goes Justice Scalia again, ruling for... employees!  Writing for a 6-2 majority, Justice Scalia says:

When the company official who makes the decision to take an adverse employment action is personally acting out of hostility to the employee’s membership in or obligation to a uniformed service, a motivating factor obviously exists. The problem we confront arises when that official has nodiscriminatory animus but is influenced by previous company action that is the product of a like animus in someone else.

Basically, two lower level supervisors were hostile towards Vincent Staub, an xray tech at a hospital. they were annoyed at his reserve duty, which caused absences that had to be covered.  As a reservist, Staub was entitled to job protection under USERRA.  USERRA protects against discrimination against members of the military, basically under the same standards as Title VII.  Thus, if anti-military bias is a "motivating factor" in a negative employment decision, the plaitniff can win.

Here, a non-biased manager fired Staub, but based on a report by the biased supervisors.  The hospital argued that discrimination was therefore not a motivating reason.   This presented a "cat's paw" theory, where the employer claims that the innocent supervisor's decision is independent from the biased supervisor's motivations.

The Supreme Court held:

that if a supervisor performs an act motivated by anti military animus that is intended by the supervisor to cause an adverse employment action,3 and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA

The court did say that the biased supervisor has to have some causation for the negative employment decision or the "motivating reason" standard fails.

Bonus: Those of us unfamiliar with Aesop now know the meaning of the "Cat's Paw" theory.

1The term “cat’s paw” derives from a fable conceived by Aesop, put into verse by La Fontaine in 1679, and injected into United States employment discrimination law by Posner in 1990. See Shager v. Upjohn Co., 913 F. 2d 398, 405 (CA7). In the fable, a monkey induces a cat by flattery to extract roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey makes offwith the chestnuts and leaves the cat with nothing. A coda to the fable (relevant only marginally, if at all, to employment law) observes that the cat is similar to princes who, flattered by the king, perform serviceson the king’s behalf and receive no reward.

Although this is a USERRA case, given the similiarities with anti-discrimination laws, look for this theory to be applied in Title VII cases as well

The case is Staub v. Proctor Hosp. and the opinion is here.

Court of Appeal: No Attorney-Client Privilege for Employee's Emails to Lawyer

Gina Holmes worked for Petrovich Development Co. LLC as assistant to the CEO, Paul Petrovich.  She was pregnant early in her employment and got into a discussion with her boss about the length of her leave and their respective feelings about her pregnancy. Although it appeared that they had cleared the air, Holmes simultaneously attempted to hire a lawyer, via email at work. Apparently, Holmes became upset that Petrovich forwarded her emails to others in the organization and quit, claiming constructive discharge, discrimination, harassment, etc.

The trial court summarily dismissed the harassment, discrimination and retaliation claims. The court of appeal affirmed - holding that the harassment evidence was limited to email correspondence that was neither severe nor pervasive.

The court of appeal also affirmed dismissal of the claim that Holmes was forced to resign. The court noted that when a plaintiff cannot establish a hostile work environment, a constructive discharge claim is a higher standard and must also fail.  Holmes' retaliation claim failed too, because of the lack of an adverse action.

That left claims for intentional infliction of emotional distress and invasion of privacy, which were tried to a jury. The jury found for the defendants. On appeal, Holmes claimed the trial court should not have allowed Petrovich to use the emails she sent to a lawyer seeking a referral, in which she explained her situation.  The trial court held that Holmes waived the privilege because she used company email, and there were clear policies explaining the company's right to monitor email.

The court of appeal agreed that Holmes waived the privilege Here is the money quote:

Although a communication between persons in an attorney-client relationship "does not lose its privileged character for the sole reason that it is communicated by electronic means or because persons involved in the delivery, facilitation, or storage of electronic communication may have access to the content of the communication" (§ 917, subd. (b)), this does not mean that an electronic communication is privileged (1) when the electronic means used belongs to the defendant; (2) the defendant has advised the plaintiff that communications using electronic means are not private, may be monitored, and may be used only for business purposes; and (3) the plaintiff is aware of and agrees to these conditions. A communication under these circumstances is not a “„confidential communication between client and lawyer‟” within the meaning of section 952 because it is not transmitted “by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation . . . .” (Ibid.)


When Holmes e-mailed her attorney, she did not use her home computer to which some unknown persons involved in the delivery, facilitation, or storage may have access. Had she done so, that would have been a privileged communication unless Holmes allowed others to have access to her e-mails and disclosed their content. Instead, she used defendants‟ computer, after being expressly advised this was a means that was not private and was accessible by Petrovich, the very person about whom Holmes contacted her lawyer and whom Holmes sued. This is akin to consulting her attorney in one of defendants‟ conference rooms, in a loud voice, with the door open, yet unreasonably expecting that the conversation overheard by Petrovich would be privileged.

Lawyers for employees obviously should take note and advise employees not to use monitored email systems. Employers should ensure their email policies are comprehensive and clear regarding employees' expectations of privacy.

The case is Holmes v. Petrovich Development Company LLC and the opinion is here.

Arizona Medical Marijuana Law

So, there was a big debate over what would happen in the workplace if California's Prop. 19 were to pass. If you have a short memory, that was the initiative to basically legalize personal use of marijuana.  Well, that initiative failed to pass back on November 2.

In Arizona, on the other hand, the voters passed their own Prop. 203. Text is here.
Prop. 203 legalizes certain "medical marijuana," making AZ the 15th state to do so. But AZ's new law expressly protects medical marijuana users at the workplace:

6-2813. Discrimination prohibited

***. 

B. UNLESS A FAILURE TO DO SO WOULD CAUSE AN EMPLOYER TO LOSE A MONETARY OR LICENSING RELATED BENEFIT UNDER FEDERAL LAW OR REGULATIONS, AN EMPLOYER MAY NOT DISCRIMINATE AGAINST A PERSON IN HIRING, TERMINATION OR IMPOSING ANY TERM OR CONDITION OF EMPLOYMENT OR OTHERWISE PENALIZE A PERSON BASED UPON EITHER:

1. THE PERSON'S STATUS AS A CARDHOLDER.

2. A REGISTERED QUALIFYING PATIENT'S POSITIVE DRUG TEST FOR MARIJUANA COMPONENTS OR METABOLITES, UNLESS THE PATIENT USED, POSSESSED OR WAS IMPAIRED BY MARIJUANA ON THE PREMISES OF THE PLACE OF EMPLOYMENT OR DURING THE HOURS OF EMPLOYMENT.

36-2814. Acts not required; acts not prohibited 

A. NOTHING IN THIS CHAPTER REQUIRES:

* * *

3. AN EMPLOYER TO ALLOW THE INGESTION OF MARIJUANA IN ANY WORKPLACE OR ANY EMPLOYEE TO WORK WHILE UNDER THE INFLUENCE OF MARIJUANA, EXCEPT THAT A REGISTERED QUALIFYING PATIENT SHALL NOT BE CONSIDERED TO BE UNDER THE INFLUENCE OF MARIJUANA SOLELY BECAUSE OF THE PRESENCE OF METABOLITES OR COMPONENTS OF MARIJUANA THAT APPEAR IN INSUFFICIENT CONCENTRATION TO CAUSE IMPAIRMENT. 

B. NOTHING IN THIS CHAPTER PROHIBITS AN EMPLOYER FROM DISCIPLINING AN EMPLOYEE FOR INGESTING MARIJUANA IN THE WORKPLACE OR WORKING WHILE UNDER THE INFLUENCE OF MARIJUANA.

Rad, huh?  So, you can't smoke pot AT work. The employer doesn't have to give up federal dollars to permit users to have pot in their system. ...  But generally, (1) no taking action based on positive drug tests unless the level in the blood suggests impairment (2) employers don't have to let you work "impaired" (stoned) or under the influence (buzzed?).  


I guess we're going to find out what "impaired" and "under the influence" means through a series of regulations that are supposed to be issued within the next few months.  


Remember, this isn't a general legalization of marijuana. It will apply only to "qualified" patients who are certified as having the requisite medical conditions. 


Good luck Arizona employers!  

DGV

Court of Appeal Reverses Summary Judgment in Age and Disability Case

Sandell, formerly Taylor guitars' vice president of sales, suffered a stroke. As a result, he walked with a cane and spoke slower than had previously had. Taylor ultimately fired him, claiming he did not motivate the sales staff and because sales were anemic under Sandell's leadership.

The court of appeal reversed the trial court's summary judgment. On the disability discrimination claim, the court noted that Sandell did not claim Taylor failed to accommodate him. Sandell said he could do his job without accommodation. Rather, this was a straight disparate treatment case - "they fired me because I had a disability."

Finding a factual dispute on whether Taylor's reasons for discharge were pretextual, the court relied on performance appraisals that were rosier than Taylor's characterization of Sandell's performance during litigation. So... stop me if you've heard this ... overly nice performance appraisals will come back to bite you.

Another interesting part of the opinion addressed Sandell's subordinates declarations confirming Sandell's lack of leadership skills. The court said that the employees had failed to complain during Sandell's employment, so a reasonable jury could infer the opinions had changed (for litigation?!). That's a very generous inference for the court to make, IMO.
Finally, the court was troubled by some he-said /he-said discriminatory comments, which the court believed was enough additional evidence of discrimination to send the case to the jury. The court rejected the "same actor" claim that the CEO hired and fired Sandell within five years. The court said that the CEO's perception of Sandell as "old" could have changed within that period of time, particularly because of Sandell's physical changes.

The opinion is Sandell v. Taylor-Listug, Inc. and the opinion is here

California Supreme Court Bings Google

I think Reid v. Google (opinion here) will be more memorable for its discussion of objections in summary judgment proceedings than for its discussion of the stray remarks doctrine.

I will post my upcoming article here next Monday, which will explain the above gibberish. (Or I'll cheerfully refund your money, and that's a promise!)

U.S. Supreme Court on Timeliness of Disparate Impact Claims

The U.S. Supreme Court unanimously held that disparate impact claims were timely even though the plaintiffs did not challenge the original implementation of the alleged discriminatory practice. Justice Scalia wrote the opinion. So there, Scalia haters.

The City of Chicago conducted an examination for firefighters in 1995. It announced it would begin selecting from among the highest scorers, called "well-qualified." The middle tier was called "qualified." Applicants who scored in this range would be kept on an eligibility list. No one brought suit attacking the examination at the time it was given.

Over time, the city exhausted the "well-qualified" list. On March 31, 1997, some African-American applicants filed a charge with the EEOC. They claimed the use of the "well qualified" score had a disparate impact on black applicants - i.e., it resulted in exclusion of a disproportionate number of black applicants. After receiving right to sue letters, they brought a class action on behalf of 6,000 "qualified" applicants.

The Court framed this issue like this:

We consider whether a plaintiff who does not file a timely charge challenging
the adoption of a practice—here, an employer’s decision to exclude employment
applicants who did not achieve a certain score on an examination—may assert
a disparate-impact claim in a timely charge challenging the employer’s later
application of that practice.

The city argued the charges were untimely and that the scoring was justified by business necessity. The city lost at trial. The district court rejected the business necessity of the test as a justification for the admittedly "severe" disparate impact.

Regarding timeliness, the plaintiffs were timely regarding the city's more recent selections of well-qualified applicants, but were untimely regarding the city's initial classification of qualified and well qualified persons.

The Supreme Court decided that the city's use, rather than adoption, of the practice was the discriminatory act. Therefore, the decision that the City's selection of well-qualified applicants within the limitations period was sufficient to establish a disparate impact claim.

The issue in Ledbetter v. Goodyear Tire & Rubber Co., 550 U. S. 618 (2007), in contrast, was whether a plaintiff could allege disparate treatment - intentional discrimination - based on time-barred past decisions. The court distinguished Ledbetter because the disparate impact claim is based on the use of neutral, but discriminatory, criteria, without the need to prove intent. So, Ledbetter is not in conflict with this decision.

The case is Lewis v. City of Chicago and the opinion is here.

U.S. Supreme Court: Plaintiffs Must Prove "But-For" Causation in Federal Age Discrimination Claims

So, the federal Age Discrimination in Employment Act does not permit "mixed motive" jury instructions. That is because the plaintiff's burden of proof is to always show that age was THE cause of a challenged adverse action. Unlike Title VII and California's FEHA, the ADEA does not permit the plaintiff to merely prove that a discriminatory motive was just one of many. Big case under the ADEA, but it will have no real effect on California age discrimination litigation under FEHA.

Here are the facts from the opinion:

Jack Gross began working for respondent FBL Financial Group, Inc. (FBL), in 1971. As of 2001, Gross held the position of claims administration director. But in 2003, when he was 54 years old, Gross was reassigned to the position of claims project coordinator. At that same time, FBL transferred many of Gross’ job responsibilities to a newly created position—claims administration manager. That position was given to Lisa Kneeskern, who had previously been supervised by Gross and who was then in her early forties. Although Gross (in his new position) and Kneeskern received the same compensation, Gross considered the reassignment a demotion because of FBL’s reallocation of his former job responsibilities to Kneeskern.

Gross filed suit . . . alleging that his reassignment to the position of claims project coordinator violated the ADEA, which makes it unlawful for an employer to take adverse action against an employee "because of such individual’s age." 29 U. S. C. §623(a). The case proceeded to trial, where Gross introduced evidence suggesting that his reassignment was based at least in part on his age. FBL defended its decision on the grounds that Gross’ reassignment was part of a corporate restructuring and that Gross’ new position was better suited to his skills. . . .

The courts below wrestled with the proper standard of proof, assuming that Title VII's frameworks and analyses equally applied to the ADEA. The Supreme Court, which accepted review of the case to determine the proper time to give a "mixed motive" instruction in an ADEA case, answered: Never.

The Court's 5-4 majority reasoned that the ADEA statute is worded differently from Title VII, and that Congress passed a law amending Title VII to allow "mixed motive" cases, but did not simultaneously amend the ADEA. So, to sum up:

We hold that a plaintiff bringing a disparate-treatment claim pursuant to the ADEA must prove, by a preponderance of the evidence, that age was the "but-for" cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision.

The dissent argued strenuously that the Court should not have reached the question that it decided because it was not presented for review. Then the dissenters, in two opinions, would have held that the language in the ADEA did not require "but-for" causation, and that courts had used Title VII precedent to interpret the ADEA's causation standards.

Congress can overturn this decision by simply incorporating Title VII's causation standards into the ADEA, or by simply adding "age" to Title VII and ending the separate statutory schemes. The majority pointed out Congress has taken up Title VII and ADEA amendments before without harmonizing the causation standards. I guess we'll find out soon enough if Congress omitted that amendment intentionally.

The case is Gross v. FBL Fin. Servs. and the opinion is here.

Court of Appeal: Inadequate Notice of Disability But Sufficient Notice for CFRA Leave

The Court of Appeal decided that Continental Airlines management had insufficient notice that its employee, Henry Avila, had a covered "disability" under the Fair Employment and Housing Act. The employer knew the employee had missed work because he was "sick," was hospitalized for three days, and that he presented a couple of slips from Kaiser putting him off work for short durations. The court, though, found it was undisputed that the employer did not know that the reasons for the absences amounted to a "disability" under FEHA. The plaintiff's failure to accommodate claim failed for the same reason.

However, the court held that Continental was on sufficient notice that the employee needed CFRA leave. Avila's merely calling in sick was not sufficient notice:

That plaintiff called in sick was, by itself, insufficient to put Continental on notice that he needed CFRA leave for a serious health condition. (See Gibbs v. American Airlines, Inc. (1999) 74 Cal.App.4th 1, 9 [“an employee who calls in sick to work for several days while taking antibiotics for an apparent flu has not provided her employer with ‘notice sufficient to make the employer aware that the employee needs CFRA qualifying leave’”]; see also Stevens v. Department of Corrections (2003) 107 Cal.App.4th 285, 292 [“in the context of leave for an employee’s own serious health condition, the mere notice that an employee seeks to use sick time is insufficient to place the employer on notice that the employee seeks CFRA-qualifying leave”] [dictum].)

Yet, the court held (2-1) that the employee's claim that he gave the Kaiser doctor's notes to an unidentified manager was sufficient to create a triable issue of fact that he sufficiently requested a CFRA leave. The employee's testimony was sufficient to require a trial as to whether the company had adequate notice that the employee was hospitalized for 3 days, sufficient to
constitute a "serious health condition" requiring leave. The dissenting justice believe that the employee did not make a sufficient request for leave.

The opinion in Avila v. Continental Airlines is here.

U.S. Supreme Court Decides State Pension Formula Does Not Violate ADEA

Kentucky's pension system provides retirement benefits for employees who reach a certain age. It also provides benefits for certain employees who become disabled in the line of duty, or after a certain amount of service. The formula for retirement benefits adds "imputed" years of service to those employees who become disabled before retirement. The EEOC challenged the formula claiming that the pension provided lower "imputed" years for disabled employees who had longer service and, therefore, was a proxy for age discrimination.

Confusing, right? Well, the Supreme Court held the pension formula did not violate the Age Discrimination in Employment Act. And the decision was 5-4, with Justices Scalia, Kennedy, Ginsburg, and Alito dissenting.

The case is Kentucky Retirement System v. EEOC and the opinion is here.

U.S. Supreme Court on Employer's Burden of Proof in Age Discrimination Cases

The federal Age Discrimination in Employment Act is structured differently from Title VII. That is why case law interpreting Title VII is not always applicable in ADEA cases.

Like Title VII, ADEA authorizes "disparate impact" cases - where the plaintiff demonstrates a neutral employer practice that has a greater effect on members of a protected group than non-members. The statute provides that an employment practice is legal if based on "reasonable factors other than age." The question the Court addressed in Meacham v. Knolls Atomic Power Lab. is whether the "RFOA" provision is part of the plaintiff's burden of proof or an affirmative defense. Agreeing with the EEOC's long-held position, the Court held that employers have the burden of proving that a challenged practice, one that has a statistically significant impact on older workers, is based on "reasonable factors other than age."

Court of Appeal: No Disability and No Retaliation

In 2000, the California Legislature amended the Fair Employment and Housing Act to ensure the definition of "disability" is broader than the definition in the Americans With Disabilities Act. Way broader. For example, under state law, the employee's "mitigating measures" (such as glasses to help the sight impaired) are not taken into account when evaluating if a person has a disability. Another major difference is that an impairment need only make life activities "difficult" to be "limiting." Under federal law, the impairment must be "substantially" limiting, which is much tougher to prove.

I don't know of any published opinion holding that someone failed to demonstrate a "disability" under the new state law version of the definition. Until now.
Arteaga was part of a crew on a Brink's armored car. He picked up money from ATMs. Money was missing, repeatedly. Brink's investigated and let Arteaga know. An investigation into theft could create a certain numbness, as well as stress. Predictably, therefore, after the investigation commenced, Arteaga began complaining of pain and numbness in his arms, fingers, shoulders and feet, and that he was experiencing "stress." No one had noticed any issues with Arteaga's performance related to the numbness, nor had he complained about it before, although he said he had been experiencing it for a couple of years.

Holding Arteaga did not have a disability, the court noted that his alleged impairment did not "limit" his ability to work, either compared with his pre-disabled condition or with others who perform the work. The opinion is full of interesting observations about relevant considerations: Arteaga did not disclose any impairments on medical forms; the company took him to a doctor on two occasions who released him back to work immediately; he had not complained of any issues until he was under investigation; pain alone does not automatically constitute a disability; no duty to accommodate when employee did not disclose disability; and others.

Arteaga also claimed retaliation because he filed a workers' compensation claim. The court held that the timing was not enough to raise a triable issue of fact because the company had been investigating Arteaga's performance before he filed the workers' compensation claim and then simply followed through with the termination decision.

Where the employee relies solely on temporal proximity in response to the employer’s evidence of a nonretaliatory reason for termination, he or she does not create a triable issue as to pretext, and summary judgment for the
employer is proper.

The case is Arteaga v. Brink's Incorporated. The opinion is here.

DGV

U.S. Supreme Court Punts on "Me Too" Evidence in Discrimination Cases

Mendelsohn sued Sprint for age discrimination. At trial, she attempted to admit evidence that other Sprint employees were subjected to age discrimination, even though by different supervisors at different times, and otherwise unrelated to the discrimination she experienced. This is known as "me too" evidence. The district court held the evidence was irrelevant and inadmissible. The Tenth Circuit Court of Appeals reversed, believing the district court adopted a "per se" rule excluding "me too" evidence based on Tenth Circuit precedent.
The U.S. Supreme Court, in a unanimous ruling, reversed the Tenth Circuit. However, the Court did not analyze the extent to which "me too" evidence is admissible. Rather, this case was decided as a matter of civil procedure / evidence law. On the merits, the court said that "me too" evidence is neither per se admissible or inadmissible, and the decision to admit it is within the trial court's discretion based on factors normally applicable to the relevance analysis. No guidance on this issue at all.
The case is Sprint / United Mgmt. Co. v. Mendelsohn. The opinion is here.

California Supreme Court Takes Up "Stray Remarks"

In a discrimination case, the plaintiff may attempt to introduce allegedly biased comments by a person unrelated to the negative decision that is the subject of the lawsuit. A number of courts, including in California, have characterized these as 'stray remarks' that have no bearing on the plaintiff's case, and which do not defeat motions for summary judgment.

In last year's decision in Reid v. Google (opinion here), the Court of Appeal expressed disdain for the "stray remarks" doctrine, saying the trial court should have let a jury decide their importance. The California Supreme Court accepted review and will consider whether such evidence defeats a motion for summary judgment.

The Cal. Supreme Court appeared to leave untouched a number of other issues the Court of Appeal addressed, such as whether the "shifting burdens" analysis is mandatory, the use of statistics in individual discrimination cases, and other bedrock employment law issues.

The Supreme Court also will resolve once and for all - must the trial court specifically rule on objections to evidence submitted in support or opposition to a summary judgment motion? The Reid court decided trial courts need not do so, contrary to a recent spate of appellate decisions holding that they must.

Oh, and I, for one, welcome our new Google overlords. They do host this blog after all.

Directors Not "Employees" under Federal Law

The Board of Directors of a non-profit did not count as "employees" under the federal ADEA or ADA. Media Center provides public access programming in Nevada. One of its employees sued under ADEA and ADA for age and disability discrimination. The district court dismissed the case because Media Center did not have sufficient "employees" when one disregarded the directors as well as certain volunteer "producers."

As the court pointed out, whether the directors count as "employees"

is governed by the United States Supreme Court’s analysis in Clackamas
Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003). In Clackamas, the Court addressed whether physicians that were also directors and shareholders of a clinic were employees for purposes of the ADA. The Court noted that Congress had intended the word “employee” to describe “the conventional master-servant relationship as understood by common-law agency doctrine.” Id. at 445 (internal quotation marks and citation omitted). The Court then described six factors relevant to determining whether a director is an employee:

• Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work
• Whether and, if so, to what extent the organization supervises the individual’s work
• Whether the individual reports to someone higher in the organization
• Whether and, if so, to what extent the individual is able to influence the rganization
• Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
• Whether the individual shares in the profits, losses, and liabilities of the organization.

Applying this test, the Court held directors are not "employees." The case is Fichman v. Media Center and the opinion is here.

DGV

California Court: No Preemption of State Law Claims for Bank

Banks have a special weapon in employment litigation (including wrongful termination and even discrimination claims). The National Bank Act preempts these state law claims, at least as they relate to bank "officers."

So, may a bank subject to the National Bank Act designate "officers" at will to come within the preemption provisions? No, said the court of appeal in Ramanathan v. Bank of America. Quoting from an earlier California Supreme Court case, the court reviewed the criteria for evaluating whether a bank employee is an "officer" and covered by the National Bank Act's discharge provisions:

a bank ‘officer’ within the meaning of section 24 possesses the following attributes: First, he or she holds an office created by the board of directors and listed in the bank’s bylaws. (Citation.) Second, he or she is appointed by the board of directors, either directly or pursuant to a delegation of board authority set forth in the bylaws. (Citations.) Third, he or she has the express legal authority to bind the bank in its transactions with borrowers, depositors, customers, or other third parties by executing contracts or other legal instruments on the bank’s behalf. (Citation.)
Fourth, his or her decision-making authority, however it might be limited by
bank rule or policy, relates to fundamental banking operations in such a manner
as to affect potentially the public’s trust in the banking institution. (Citation.) If a particular bank employee holds a position possessing these features, he or she may be viewed as the bank itself in the eyes of third parties. Such an employee is an ‘officer’ and serves at the pleasure of the board of directors.”

The court then applied these criteria and found that Ramanathan, a "vice president," raised a triable issue of fact as to whether he was an officer under the National Bank Act. Therefore, the court vacated summary judgment and remanded for trial on Ramanathan's claims for discrimination, harassment and wrongful termination brought under California law.

Thanks to Connecticut Employment Law Blog for reminding me to post about this case.

9th Circuit Sets Low Bar on Employer Liability for Employees' Conduct

Poland was with the Customs Service in Denver. Hillberry was his supervisor. Hillberry demonstrated some anti-age animus towards Poland. Poland at some point filed a charge of discrimination. Later, Hillberry requested an administrative review of Poland's management of subordinates. The reviewers found that Poland engaged in unprofessional conduct as a manager. As a result, Poland was demoted to a non-supervisory job and transferred to Vienna Virginia.
Poland accepted the transfer, but retired 3 years before the mandatory retirement age.

Poland sued for, among other things, retaliation and constructive discharge. He said that the administrative review was retaliation for his age discrimination claim. The trial court awarded damages for constructive discharge and retaliation.

The Ninth Circuit reversed on the constructive discharge claim. 2/3 of the judges said that Poland did not establish his working conditions were intolerable merely because he was demoted and transferred. Among other things, the court noted that Poland worked 5 months in Virginia, contradicting his argument the transfer created intolerable conditions.

The really significant part of the case, though, is the Ninth Circuit's stance on liability for actions taken by innocent superiors on the basis of lower level employees' complaints. Hillberry did instigate the investigation into Poland's conduct, true. But the court did not rely on that alone and said that Hillberry's referral alone would not have been enough. Rather, the court focused on the fact that the investigators had access to Hillberry's notes, that Hillberry gave the list of witnesses to the investigators, and that the panel relied on performance reviews that had increased in frequency after Poland filed his first discrimination complaint.

In upholding Poland's claim, the court announced the rule for holding employers liable for negative, non-discriminatory actions taken on the basis of an employee's complaint that is tainted by bias:

We hold that if a subordinate, in response to a plaintiff’s protected activity, sets in motion a proceeding by an independent decisionmaker that leads to an adverse employment action, the subordinate’s bias is imputed to the employer if the plaintiff can prove that the allegedly independent adverse employment decision was not actually independent because the biased subordinate influenced or was involved in the decision or decisionmaking process.

The court added that if the investigation is "entirely independent" of the subordinate's influence, the animus of the retaliating employee is not imputed to the employer.

So, if an employee engages in protected activity by complaining against a manager, that manager cannot be the impetus for negative treatment against the complaining employee, unless an "entirely independent" investigation finds the negative treatment is justified. Otherwise, the odds of a retaliation finding are very high.

The case is Poland v. Chertoff. Opinion is here.

EEOC Revises Age Discrimination Regulations

The Equal Employment Opportunity Commission has revised its regulations regarding enforcement of the Age Discrimination in Employment Act. The text of the affected regulations as revised is here. The purpose of the revisions is to conform them with the U.S. Supreme Court's decision in General Dynamics Land System, Inc. v. Cline, 540 U.S. 581 (2004). There, the Supreme Court held that the ADEA prohibits only age discrimination against employees that are older than there comparators. That means that an employee over 40 cannot complain that an older employee was favored over him or her, even though the over-40 employee is covered by ADEA.
The new text of the regulation makes clear:

Favoring an older individual over a younger individual because of age is not unlawful discrimination under the ADEA, even if the younger individual is at least 40 years old. However, the ADEA does not require employers to prefer older individuals and does not affect applicable state, municipal, or local laws that prohibit such preferences.