EEOC Year-End Countdown

The Need For Vigilance: The EEOC Comes Back For A Second Bite Of An Employer After A Settlement

Posted in Remedies, Uncategorized

By Chris DeGroff and Brian Wong

In the world of EEOC systemic enforcement, court-imposed injunctive relief accompanies nearly every settlement of Title VII claims. The parties memorialize this relief in the form of a consent decree to be approved by the Court and entered as an enforceable order. Though the parties and the public tend to focus primarily on the dollar value of systemic action settlements, employers bound by consent decrees must remember that failure to comply with agreed-upon injunctive mandates could result in significant exposure for the company.

In EEOC v. Supervalu, Inc. and Jewel-Osco, Case No. 1:09-CV-05637 (N.D. Ill. July 15, 2014), the EEOC tried to send this very message to employers.

Background

On September 11, 2009, the EEOC sued Supervalu, Inc. and Jewel-Osco (collectively “Jewel”) in the U.S. District Court for the Northern District of Illinois, alleging Jewel engaged in a pattern or practice of violating Title I of the Americans with Disabilities Act.  Specifically the EEOC alleged Jewel prohibited disabled employees from returning to work after disability leaves unless they could return without accommodation, and that Jewel terminated such employees at the end of their one-year leave period.

On January 14, 2011, the EEOC and Jewel entered into a three-year Consent Decree to resolve the case. Among other provisions, the Consent Decree required Jewel to make monetary payments to eligible claimants, provide training to certain employees who administer disability leaves, and engage a “job description consultant” and “accommodations consultant” to improve job descriptions and assist in identifying possible accommodations for disabled employees.

The case was over. But was it?

The next year, on March 26, 2012, the EEOC filed a motion seeking civil contempt sanctions against Jewel for failing to follow the requirements of the Consent Decree as to three former employees. The EEOC also sought limited discovery on the issue, which the Court initially denied, but thereafter granted following written objections by the parties. After the parties engaged in limited discovery, the Court conducted evidentiary hearings on March 17 and 18 and April 7, 2014, before U.S. Magistrate Judge Michael T. Mason.

The Magistrate Judge’s Recommendation

Judge Mason filed his Report and Recommendation on July 15, 2014, determining that Jewel violated the terms of the Consent Decree by failing to accommodate and ultimately terminating three disabled employees.  According to the Court, Jewel failed to follow its own interactive process guidelines and declined to consider a list of possible accommodations generated by the accommodations consultant the company itself had appointed per the Consent Decree.  According to Magistrate Judge Mason, “[q]uite simply, the evidence [was] overwhelming that the company did not do what it was supposed to do under the Decree.” Id. at 46.

After determining clear and convincing evidence showed Jewel violated the Consent Decree, the Court recommended: (i) a finding of contempt on the part of Jewel; (ii) compensatory sanctions of over $82,000 in back pay for the three aggrieved individuals; (iii) a one year extension of the term of the Consent Decree; (iv) retention of a company-paid “special master” to review prospective accommodation decisions made by Jewel in the future; and (v) company payment of reasonable fees and costs incurred by the EEOC in pursuing its contempt motion.

But the saga continues.  Jewel has until July 29, 2014 to file objections to Judge Mason’s Report and Recommendations.  So blog readers, please stay tuned.

Implications For Employers

Regardless of the outcome of the ongoing briefing, this action brought by the EEOC serves as a cautionary tale for any employer living under the terms of an EEOC consent decree.  Companies bound by consent decrees must remain vigilant, as the EEOC frequently looks for opportunities to retake the spotlight by making allegations about supposed compliance issues.  As EEOC Chicago Regional Attorney John Hendrickson has warned, “Consent decrees have teeth.” The attraction of these compliance actions for the EEOC is clear: tag-along actions like those discussed here have all of the publicity elements of an actual lawsuit, while expending minimal governmental resources. Because consent decrees often contain exhaustive injunctive mandates, robust documentation of those efforts can be a critical safeguard against aggressive EEOC allegations of non-compliance.

Readers can also find this post on our Workplace Class Action blog here.

New Guidance From The EEOC Requires Employers To Provide Reasonable Accommodations Under The Pregnancy Discrimination Act

Posted in Regulatory / Guidance Issuance

By Paul Kehoe 

Today, without the fanfare of a public meeting, the U.S. Equal Employment Opportunity Commission published Guidance on its website addressing the treatment of pregnancy under Title VII. Once again, it appears as if the EEOC adopted a position exceeding the statutory mandate that Congress bestowed upon it. Requiring employers to provide a reasonable accommodation under Title VII of the Civil Rights Act of 1964 for all pregnant employees finds no statutory basis in the text of Title VII, the Americans With Disabilities Act, as amended, or the Pregnancy Discrimination Act (the “PDA”). Indeed, the overwhelming majority of the Circuit Courts of Appeals that have reviewed the issue have held that the PDA does not include a reasonable accommodation requirement.  Despite that, a majority of the EEOC’s Commissioners determined otherwise. Commissioners Barker and Lipnic both issued statements – immediately after the EEOC posted the Guidance on its website – questioning the wisdom of the majority’s actions on procedural and substantive grounds, each recognizing that in adopting the new Guidance, the Commission sought to legislate changes to, rather than interpret, Title VII.

Controversy

This is a controversial issue for employers. One might reasonably argue that when the U.S. Supreme Court reviews Young v. United Parcel Serv., 707 F.3d 437 (4th Cir. 2013), in its next term, it should grant this Guidance the deference it deserves – none.

This bald attempt to jump over a pending Supreme Court case and federal legislation, however, may backfire against the EEOC as the Supreme Court has rather routinely rejected EEOC guidance in recent years. See, e.g., Vance v. Ball State University, 133 S. Ct. 2434 (2013) (rejecting the EEOC’s definition of “supervisor” and held that an employee is a supervisor only where the employer has empowered the employee to take tangible employment actions against the employee rather than the EEOC’s more expansive definition); Univ. of Texas Southwestern Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2013) (rejecting the EEOC’s position that retaliation claims under Title VII were subject to the “motivating factor” causation standard); Hosanna-Tabor Evangelical Lutheran Church v. EEOC, 132 S. Ct. 694, 707 (2012) (rejecting the EEOC’s position that the ministerial exception did not apply to ADA retaliation cases). The Supreme Court’s decisions were often based on the lack of statutory support for the EEOC’s positions.  Like all regulatory agencies, the EEOC does not operate in a vacuum or in pursuit of policies which it may desire to implement but rather may act only pursuant to the authority given to it.

Without a doubt, given the broad expansion of covered disabilities under the ADAAA, many more pregnancy-related impairments now likely rise to the level of an ADA-covered disability (e.g., anemia, pregnancy-related sciatica, pre-eclampsia, gestational diabetes).  In these instances, a pregnant employee would be afforded the same right to reasonable accommodation under the ADA as any other individual with a disability, regardless of whether the impairment was related to pregnancy.  In addition, twelve jurisdictions have adopted pregnancy accommodation statutes or ordinances. However, the Guidance asserts that the reasonable accommodation requirement applies even for those pregnant employees whose impairments do not rise to the level of a disability under the ADA (e.g., those with a “normal” pregnancy) notwithstanding that under the ADA, pregnancy is not an impairment.

The standards adopted in the Guidance are currently proposed in the Pregnant Worker’s Fairness Act (the “PWFA”), S. 942 and H.R. 1975.  The PWFA, if enacted, would make it an unlawful employment practice to not provide a reasonable accommodation to the known limitations related to pregnancy or force a pregnant employee to take leave, among other things. Rather than waiting until the legislative process is complete, the Guidance preemptively reaches the same conclusion under the theory that the reasonable accommodation requirements of the Americans with Disabilities Act of 1990 were incorporated into the PDA, which was enacted in 1978.

Implications For Employers

As a practical matter, employers will feel the greatest impact of the Guidance in the area of light duty and leave as applicable to female employees with “normal” pregnancies. Currently, under federal law, where an employer’s policy provides leave or light duty for employees injured or otherwise medically limited in their ability to work for any reason, a pregnant employee is entitled to such leave – the fact that her limitation arises from a normal pregnancy, rather than an injury or medical condition – is irrelevant. Conversely, as was permissible in Young, where an employer’s light duty or leave policy limits eligibility to those with a disability or those with on the job injuries, an employee with a normal pregnancy would not be eligible for light duty. Under the Guidance, employers would be required to provide light duty and/or leave for all pregnant employees, regardless of whether they were “disabled” under the ADA.

Notably, the EEOC’s process in adopting the anticipated Guidance ignored the standards articulated by the Office of Management and Budget (“OMB”) in its “Final Bulletin for Agency Good Guidance Practices” (No. M-07-07, January 18, 2007). That document — which “establishes policies and procedures for the development, issuance, and use of significant guidance documents by Executive Branch departments and agencies” — sets forth a number of recommendations for significant guidance documents.  While it stops short of requiring agencies to provide pre-adoption notice and comment on all significant guidance documents, it recognizes that “it is often beneficial for an agency to do so when they determine that it is practical.  Pre-adoption notice and comment can be most helpful for significant guidance documents that are particularly complex, novel, consequential, or controversial.”

As this Guidance adopted a standard that is currently pending before Congress and the Supreme Court, a standard overwhelmingly (though not unanimously) rejected by the Circuit Courts of Appeals, and one which essentially eviscerates the EEOC’s prior position that pregnancy is not a disability (which was issued during a notice and comment rulemaking), all without public comment or an opportunity for dissenting Commissioners to publicly object to the Guidance, its adoption casts a pall over its legitimacy. Unfortunately, the EEOC has decided that the legislative and judicial processes are not necessary when rewriting the statutes that it enforces.

Readers can also find this post on our Workplace Class Action blog here.

EEOC Suffers Resounding Summary Judgment Defeat In ADA Case

Posted in Motions for Summary Judgment

By Gerald L. Maatman Jr. and Howard M. Wexler

In a case we have previously blogged about several times due to spoliation sanctions imposed on the EEOC – most recently here - the U.S. District Court for the Middle District of North Carolina finally reached the merits of the case and granted summary judgment in favor of the employer.  In EEOC v. Womble Carlyle Sandridge & Rice, LLP, 2014 U.S. Dist. LEXIS 86953 (M.D.N.C. June 26, 2014), the Court held that the individual the EEOC brought suit on behalf of, Charlesetta Jennings, was not a “qualified individual” under the Americans With Disabilities Act (“ADA”). Accordingly, the Court granted summary judgment to the employer and rejected the EEOC’s claim.

Background

Ms. Jennings, a Support Services Assistant (“SSA”) for Womble Carlyle, a law firm, was diagnosed with breast cancer in 2008. Following her treatment, Ms. Jennings developed a cancer-related condition that impairs an individual’s circulatory and immune systems. As a result of this condition, Ms. Jennings was unable to lift more than 10 pounds at first, then 20 pounds after a second consultation with her doctor. This was despite working in a position that not only requires, as a condition of employment, that employees lift at least 75 pounds, but regularly requires the lifting of 20 pounds.

Around the same time, “in response to the recession, Womble Carlyle reduced the SSA staff by nearly half.” Id. at 3. Consequently, its three law firm locations were lightly staffed, and the SSAs were often required to work independently. For a time, Ms. Jennings was able to perform some of her duties while avoiding heavy lifting by modifying her lifting methods. Nonetheless, she could not perform many of her SSA job duties as she was still unable to work alone and many SSA tasks required the lifting items that weighed in excess of 20 pounds.

In February 2011, Womble Carlyle placed Ms. Jennings on medical leave “because she could not lift seventy-five pounds.” Id. at 5. After 6 months, with no improvement in her condition, Ms. Jennings was terminated by Womble Carlyle. The EEOC brought a lawsuit on behalf of Ms. Jennings, against the law firm, alleging that it failed to accommodate her disability and subsequently terminated her employment because of the disability in violation of the ADA.

The Court’s Decision

The crux of the Court’s decision concerned whether Ms. Jennings was a “qualified individual” under the ADA. To reach this issue, the Court employed a two-part analysis. First, the Court examined whether lifting more than 20 lbs was an “essential function” of the SSA position. If it was an essential function, it had to next determine whether Womble Carlyle would be able to reasonably accommodate Ms. Jennings.

In finding that lifting more than 20 pounds was an essential function of the SSA position, the Court analyzed “whether removing the function would fundamentally alter that position.” Id. at 6. The Court deferred to the EEOC’s own ADA regulation in its analysis. While the EEOC disputed whether the 75 pounds requirement in the job description is accurate and claimed that Ms. Jennings job could have been limited to copying, scanning, and printing, the testimony of Ms. Jennings herself and other employees suggested otherwise. As the Court held, even assuming that lifting 75 pounds was not an essential function of the SSA position, lifting 20 pounds was unavoidable.

Even though Ms. Jennings could not comply with an essential function of the SSA position, she could still be a “qualified individual” under the ADA if Womble Carlyle could “reasonably accommodate” her.  Id. at 12. The EEOC proposed several solutions; however, the Court found them to clash with the well-established principles that the ADA does not require an employer to either create a “modified light-duty position” or “relocate essential functions” to another employee. Id. at 12-3. As such, the Court granted summary judgment in favor of Womble Carlyle.

Implications For Employers

This decision serves as a good example of how courts determine whether a job duty is an “essential function,” and an even better example of a court demonstrating judicial restraint to not unduly burden the employer to “reasonably accommodate” the affected employee. Nevertheless, employers must treat lightly and be sure that they are mindful of their obligations to engage in the “interactive process” with disabled employees in order to determine what reasonable accommodation is necessary. Suffice it to say, ADA issues remain a source of significant interest to the EEOC.

Readers can also find this post on our Workplace Class Action blog here.

Mach Mining Gets Last Word At The SCOTUS In Its Quest For Clarification Of EEOC’s Conciliation Obligations

Posted in EEOC Litigation

By Gerald L. Maatman, Jr. and Jennifer A. Riley

On June 2, 2014, Mach Mining filed its Reply in support of its Petition for a writ of certiorari from the U.S. Supreme Court in EEOC v. Mach Mining, Case No. 13-1019 (U.S. June 2, 2014).

In a game-changing decision, in December 2013, the Seventh Circuit ruled that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit brought by the Commission. (Read more here.) Mach Mining asked the U.S. Supreme Court to review the Seventh Circuit’s decision.

We blogged about the EEOC’s Response here. Although the EEOC prevailed in the Seventh Circuit, it backed Mach Mining’s request for review to resolve disagreement among the courts of appeals regarding the EEOC’s conciliation obligations.

In its Reply, Mach Mining argued less about whether the Supreme Court should grant review and, instead, offered a preview of its arguments as to why the Supreme Court should reject the Seventh Circuit’s rationale.

If the Supreme Court grants the Petition, it ultimately may decide whether the EEOC has any enforceable obligation to engage in good faith settlement discussions prior to filing a lawsuit. This is an important issue for any employer engaged in dealings with the EEOC.

Mach Mining’s Reply

In its Reply, Mach Mining criticized the EEOC for largely ignoring its arguments and simply reiterating the Seventh Circuit’s reasoning “which is not made any more convincing through repetition.” Id. at 2.

Mach Mining argued that, instead of addressing legal arguments, the EEOC dedicated much of its Response to accusing Mach Mining (and other employers) of using the conciliation process “to develop an affirmative defense for litigation” and to delay adjudication of the merits of the EEOC’s allegations. Id. at 3.

Mach Mining responded that, in this case, the EEOC did not provide Mach Mining with any information regarding the damages it sought on behalf of individual claimants and then delayed the litigation by two years while it resisted Mach Mining’s efforts to take discovery regarding its conciliation efforts.  Id. at 3-4.

Finally, Mach Mining argued that the EEOC mischaracterized the incentives that employers face when negotiating with the EEOC. It argued the employers have substantial incentives to settle even arguably meritorious discrimination claims informally but, given their fiduciary duties to stockholders, often cannot responsibly do so without some reasonable basis. Id. at 4. “And experience has shown that the Commission attorneys are sometimes inclined to make demands first, then develop the legal and factual basis for those demands later.” Id.

Implications For Employers

Both Mach Mining and the EEOC have filed papers asserting that the Seventh Circuit’s ruling is cert-worthy. An eventual ruling by the Supreme Court on these issues will be important for any employer dealing with the EEOC.  If federal district courts cannot review its pre-lawsuit conciliation efforts, the EEOC will have free reign to pay mere lip service to its conciliation obligations and approach any negotiations in a “take-it-or-leave-it” manner. It remains to be seen whether the Supreme Court will step in and whether it will agree with the Seventh Circuit’s approach. Stay tuned.

Readers can also find this post on our Workplace Class Action blog here.

Fruit Growers’ Discrimination Dismissal Makes For Both A Sweet And Sour Victory

Posted in Motions for Summary Judgment

By Christopher DeGroff, Kevin Fritz, and Gerald L. Maatman, Jr.

The EEOC’s reach once again exceeded its grasp in its failed lawsuit against growers in the U.S. District Court for the Eastern District of Washington. In EEOC v. Global Horizons, Inc., 11-CV- 3045, 2014 WL 2207866 (E.D. Wash. May 28, 2014), the Court tossed out the EEOC’s discrimination claims of two of the three defendants in a human-trafficking case over the treatment of Thai workers that has spanned years and was the subject of considerable media attention when it was first filed. Our prior posts on the case are herehere and here. A look at the anatomy and disposition of the case is useful for all employers facing EEOC systemic litigation.

Background

The case began in 2011 when the EEOC sued two growers, Green Acre Farms and Valley Fruit Orchards, and their labor contractor, Global Horizons, on behalf of hundreds of alleged trafficking victims. Our readers have been tracking the case since it first grew roots, and the latest development is a classic example of the EEOC’s sue first, aim later philosophy.

In ruling on the growers’ motions for summary judgment, the Court examined the hostile work environment, constructive discharge, and retaliation claims against the growers. Specifically, the Court reviewed whether a worker was subjected to unwelcome conduct based on race or national origin that was sufficiently severe and pervasive to alter employment conditions and create an abusive working environment. The Court also reviewed the work environment provided by the growers and claims of retaliation against employees who complained about working conditions.

Judge Edward F. Shea granted the growers’ summary judgment on all of the EEOC’s Title VII liability claims against them. In doing so, the Court found that the work environment provided by the farms was not so “intolerable” that a reasonable person would have felt compelled to just walk away from the job, and that the EEOC failed to show there was a single worker who could sustain a timely retaliation claim. The Court’s decision is a clear showing that when the EEOC makes assertions of systemic discrimination, it cannot reach so far without first planting the necessary evidence to grow the assertions. The Court’s decision now leaves farm labor contractor Global Horizons, Inc. as the sole defendant in the case.

Sour Grapes

One other issue was front and center in the summary judgment briefing – whether the EEOC had attempted to resolve the case in good faith before resorting to litigation in the courthouse. The growers said the answer to this question was a resounding no.  The Court, however, looked to the Seventh Circuit’s recent EEOC v. Mach Mining, LLC decision, deciding it was not the Court’s place to review those conciliation efforts, even though other federal courts had done so in the past.  Circuit splits like this make it difficult to assess the strength and merit of lawsuits. As we previously blogged, because of the importance of this issue, both the EEOC and employers are requesting that the Supreme Court resolve what is now an even greater disagreement among the courts of appeals regarding the EEOC’s conciliation obligations.

Implications For Employers

EEOC v. Global Horizons stands as a reminder to employers that the fact that the EEOC alleges systemic allegations does not make it so. The unfortunate consequence to those who find themselves in the EEOC cross-hairs is that they may need to endure years of costly litigation and media scrutiny to vindicate their cause. Fighting the good fight can pay off, as it did here.

As for the EEOC’s obligation to fulfill its mandate to informally attempt to resolve these expensive cases before they are filed, the jury remains out.  The EEOC insists that federal courts should simply take the government’s word for it when it says it has negotiated in good faith – a position many employers know first-hand is problematic.

Check back soon to see how Global Horizons, Inc. fairs in the next round, and whether the Supreme Court elects to finally take a bite at the Mach Mining apple.

Readers can also find this post on our Workplace Class Action blog here.

EEOC Urges U.S. Supreme Court To Affirm That Its Conciliation Efforts Are Not Reviewable

Posted in Remedies

By Gerald L. Maatman, Jr. and Jennifer A. Riley

This week, the EEOC responded to Mach Mining’s petition for a writ of certiorari to the U.S. Supreme Court in EEOC v. Mach Mining, Case No. 13-1019 (U.S. May 29, 2014). Although the EEOC prevailed in the Seventh Circuit, it backed Mach Mining’s request for Supreme Court review to resolve disagreement among the courts of appeals regarding its conciliation obligations.

We previously blogged about this case here. In a game-changing decision, the Seventh Circuit ruled in December 2013 that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit brought by the Commission. 

This case presents an important issue for employers engaged in dealings with the EEOC, as it addresses whether the EEOC has any enforceable obligation to engage in good faith settlement discussions prior to filing a lawsuit.

In its Brief, the EEOC argued that the Seventh Circuit “correctly” held that the informal conciliation process is entrusted to the Commission. Id. at 7. Nonetheless, it urged the Supreme Court to grant certiorari to affirm the Seventh Circuit and hold that there is no implied failure-to-conciliate affirmative defense under Title VII. Id. at 19. 

Among other things, the EEOC complained that the disagreement in the circuits “has placed the Commission in an untenable position.” Id. at 17. It did not explain why the most stringent test is “untenable,” but more generally asserted that “the wide variety in the courts’ approaches” makes it difficult for the agency to ensure that its informal efforts are “sufficiently robust.” Id.

The EEOC also noted that, in its view, conciliation has become more “protracted, resource-intensive, and time consuming.” Id. at 18. It complained that a failure-to-conciliate defense “has created incentives for employers to treat conciliation not as a means to resolve disputes voluntarily, but as an opportunity to develop an affirmative defense for litigation.” Id.

Implications For Employers

We view the Seventh Circuit’s ruling as a game-changer, and one that raises cert-worthy issues. Armed with the knowledge that a federal district court judge cannot review its pre-lawsuit conciliation strategy based on EEOC v. Mach Mining, the Commission typically approaches negotiations in a very aggressive, take-it-or-leave-it type manner. Outside the Seventh Circuit, the EEOC cannot approach its duty of good faith conciliation in such a manner, or it risks its chances in a federal courtroom after filing suit.

Readers can also find this post on our Workplace Class Action blog here.

Enough is Enough: Retail Litigation Center Advises Court That The EEOC Has Overstepped In Attack On Releases

Posted in Uncategorized

By Christopher J. DeGroff and Laura J. Maechtlen

Background

As many of our loyal readers are aware, the Equal Employment Opportunity Commission filed suit in the U.S. District Court for the Northern District of Illinois against CVS Pharmacy this year, alleging that a standard severance agreement used by the company violates Title VII of the Civil Rights Act of 1964 because it is allegedly “overly broad, misleading and unenforceable….” Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., Case No. 14-CV-863 (N.D. Ill. Feb. 7, 2014). The high-profile case has the potential to have serious impact in many industries, including the retail industry. 

The EEOC alleges that various specific provisions of CVS’s Agreement violates Title VII because it interferes with employees’ rights to file charges, communicate voluntarily, and participate in investigations with the EEOC and other state agencies, including the following: 

  • Cooperation: requiring an employee to “notify the Company’s General Counsel by telephone and in writing” of a legal proceeding including an “administrative investigation” by “any investigator, attorney or any other third party…”
  • Non-disparagement: prohibiting the employee from making any disparaging statements about the Company and its officers, directors and employees.
  • Non-disclosure of confidential information: prohibiting disclosure of confidential information without prior written permission of the Company’s chief human resources officer.
  • General release of claims: which includes a release of all “causes of action, lawsuits, proceedings, complaints, charges, debts contracts, judgments, damages, claims, and attorney fees…”
  • No pending actions; covenant not to sue: in which an employee represents the employee has no pending “complaint, claim, action or lawsuit” of any kind “in any deferral, state, or local court, or agency,” agrees not to file “any action, lawsuit, complaint or proceeding” asserting the released claims, and requires an employee to promptly reimburse “any legal fees that the Company incurs” for breach of the covenant. 
  • Breach by employee: allowing CVS to obtain injunctive and other relief, including attorney fees upon material breach.

The EEOC alleges in the CVS suit that the allegedly offending restrictions are limited only by a “single qualifying sentence” which reads that nothing in the covenant not to sue was “intended to or shall interfere with Employee’s right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws, nor shall this Agreement prohibit Employee from cooperating with any such agency in its investigation.” Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-CV-863, at pg. 4.    

Highlights From The Retail Litigation Center Amicus Brief

The Retail Litigation Center, Inc. (the “RLC”) recently asked for permission to file a brief in support of CVS on April 28, 2014.  Over the EEOC’s objection, the Court allowed the RLC to weigh in on the case.

In its brief the RLC raises a number of key points related to the CVS litigation, demonstrating how and why the EEOC’s position is untenable and overreaching.  

First, the RLC argues that the CVS separation agreement contains standard terms widely used in the industry, and by other employers. Indeed, the same terms in the CVS agreement have been approved by federal courts and do no otherwise violate Title VII. Furthermore, the terms conform with standard industry practice, not only in the retail industry, but in other industries as well. 

The RLC also argues that the EEOC’s theory fails to provide employers with a discernible standard to guide their conduct, and violates employers’ due process rights. Indeed, based on the EEOC’s guidance, and relevant case law, CVS had no prior notice that its conduct violated federal law. Indeed, the RLC argues that most of the EEOC’s objections to the CVS agreement are “atmospheric,” claiming that the form and style of the Agreement restrain employees’ right under Title VII. The RLC further argues that the EEOC’s new “standard” for evaluating severance agreements could (and would) invite arbitrary enforcement by the EEOC and courts. This is because the EEOC attempts to replace the prevailing guidance governing separation agreements in favor of an “undefined” and “subjective” standard. Id. at 11.

Finally, the RLC adeptly argues that a ruling against CVS would undermine the important societal goals of finality, and informal dispute resolution underlying Title VII. It notes that separation agreements are common devise used by “countless” employers and employees alike, across hundreds of industries, to the mutual benefit of employers, employees and the judicial system. The RLC argues that the EEOC’s approach would sacrifice those benefits and make resolution of disputes more difficult and costly. 

Implications For Employers

Employers are well-served to watch the EEOC v. CVS case carefully. The EEOC’s position attempts to signficantly alter existing authority governing terms of severance agreements.  Indeed, portions of the CVS agreement follow — or are more expansive for employees — of the EEOC’s own guidance here and here, and agreements held enforceable by in key court decisions relied upon by employment practitioners. See, e.g., EEOC v. Eastman Kodak Co., Case No.. 06-CV-6489 (W.D.N.Y. 2006). The RLC’s amicus brief effectively demonstrates sincere concern felt by the employer community regarding the significant implications of the EEOC’s position. 

Readers can also find this post on our Workplace Class Action blog here.

Latest Development In EEOC’s Appeal Of $4.7 Million Fee Award In The Eighth Circuit

Posted in Defenses to Pattern or Practice Cases

By Rebecca Bjork and Gerald L. Maatman, Jr.

Our loyal readers know that we have been monitoring closely the proceedings in the EEOC’s appeal of the largest fee sanction award against the agency in its history — the $4.7 million awarded by the district court in the sexual harassment case entitled EEOC v. CRST Van Expedited, Inc., No.13-3159 (8th Circuit). You can read about the award and our take on the EEOC’s opening brief in the appeal here.

In essence, the district court awarded fees to CRST because it found the EEOC should not have brought the case in the first place. It found the EEOC’s conduct to be frivolous, unreasonable or groundless. Specifically, the district court found that the Commission failed to exhaust Title VII’s administrative prerequisites before filing suit, and also that its pattern or practice claim was unreasonable since it was based only on anecdotal evidence.

This past week, the EEOC filed its reply brief in the Eighth Circuit in support of its effort to overturn the fee award on the ground that CRST is not the prevailing party, even though the EEOC lost its pattern or practice case and 153 of 154 individual claimants’ cases, and the remaining individual’s case settled for $50,000. The EEOC’s hefty brief – which comes in at 45 pages — takes on CRST’s opposition brief point-by-technical-point, but ultimately turns on one overarching issue:  whether the EEOC should be considered the prevailing party because all of its claims and claimants must be understood as one claim because they are allegedly unified by common failures of CRST’s HR policies and procedures, or whether CRST prevailed by defeating multiple individual claims, and even under EEOC’s theory, “virtually 99.9%” of the case, in the district court. See Br. at 14. 

Among the most pertinent points the EEOC argues in reply is that CRST ignores controlling Supreme Court precedent cited in the EEOC’s opening brief on the standard for a prevailing civil rights plaintiff (Farrar v. Hobby, 506 U.S. 103 (1992)) and why EEOC supposedly meets that standard. Br. at 4. It also contends that the dismissal of the pattern or practice case is irrelevant to whether it is the prevailing party, because it can and did sue on behalf of individuals under its section 706 authority to represent aggrieved individuals. Br. at 4-6. And it argues that the finding that EEOC failed its pre-suit conciliation obligations is not a finding on the merits that would make CRST the prevailing party. Br. at 14-17. 

The stakes for the EEOC of course are high given the dollar figure at issue. So if the Eighth Circuit affirms the award, one can be quite sure that a hard look at the appellate decision will be forthcoming from decision makers at the highest levels of the EEOC. Watch this blog space for further developments.

Readers can also find this post on our Workplace Class Action blog here.

Court Rejects EEOC’s Objections To $22,900 Spoliation Sanction Award

Posted in Remedies, Uncategorized

By Gerald L. Maatman Jr., Howard M. Wexler, and Nadia Bandukda

In a case we previously blogged about (here and here), EEOC v. Womble Carlyle Sandridge & Rice, LLP, 13-CV-46 (E.D.N.C. Mar. 24, 2014), Magistrate Judge L. Patrick Auld held the EEOC liable for spoliation sanctions based on the “negligence, if not gross negligence” exhibited by the charging party it brought suit on behalf of – one Ms. Charlesetta Jennings (“Ms. Jennings”). On March 24, 2014 Magistrate Judge Auld ordered the EEOC responsible for $22,900 as the reasonable costs incurred by Womble Carlyle that the EEOC must pay. On April 29, 2014, Judge Eagles of the U.S. District Court for the Middle District of North Carolina issued an order affirming Judge Auld’s sanction award and rejecting the EEOC’s contention that the amount was too high.

Background

The EEOC filed suit on behalf of Ms. Jennings in 2013 alleging that Womble Carlyle failed to accommodate her disability and subsequently terminated her employment because of the disability in violation of the Americans With Disabilities Act (“ADA”). As the EEOC sought back pay on behalf of Ms. Jennings, Womble Carlyle served document demands and interrogatories designed to determine whether she properly mitigated her damages by seeking alternative employment. While being deposed in September 2013, Ms. Jennings testified that she had previously maintained a detailed log chronicling her efforts to obtain alternative employment while she was receiving unemployment insurance benefits; however, once these benefits ended in February 2013, she shredded the log. Further, she testified that she discarded additional material regarding her efforts to obtain employment in June of 2013 – which was after the EEOC had already filed its lawsuit on behalf of Ms. Jennings in January 2013.

Based on Ms. Jennings’ destruction of these documents, Womble Carlyle sought sanctions for spoliation of evidence, which the Magistrate Judge granted and ordered the EEOC to reimburse Womble Carlyle its costs and fees associated with having to bring the spoliation motion.  As a result, Womble Carlyle submitted a Statement of Expenses totaling $29,651.00. On March 24, 2014, Magistrate Judge Auld ordered the EEOC to pay Womble Carlyle $22,900 in sanctions. The EEOC timely filed Rule 72 objections to Judge Auld’s Report and Recommendation as to the money awarded to Womble Carlyle.

The Court’s Decision

In her two page Order, Judge Eagles noted that she reviewed Magistrate Judge Auld’s Report and Recommendation de novo and determined that “the amount awarded by the Magistrate Judge is appropriate.” Id. at 1. As such, Judge Eagles affirmed and adopted the sanction award and ordered the EEOC to pay Womble Carlyle the full $22,900 amount within 120 days “to reimburse the defendant for its reasonable expenses incurred in attempting to conduct additional discovery regarding mitigation of damages and in bringing its motion for sanctions.” Id. at 2.

Implications For Employers

As this case demonstrates, decisions made regarding the preservation of evidence issues at the beginning of, and even leading up to, litigation can have very serious implications, whether in the form of sanctions, an adverse inference at trial or even outright dismissal. This decision (and Magistrate Judge Auld’s prior Report and Recommendation) should be added to employers’ defense toolkits, as the preservation of documents and information is a two-way street that employees (and the EEOC) must also follow once litigation is reasonably foreseeable – or proceed at their own peril.

Readers can also find this post on our Workplace Class Action blog here.

Is Telecommuting The New Mainstream Reasonable Accommodation Under The ADA? The Sixth Circuit Changes Course On This Issue

Posted in Defenses to Pattern or Practice Cases

By Caroline A. Keller  and Gerald L. Maatman Jr.

While the ADA does not explicitly list telecommuting as a reasonable accommodation, the EEOC guidelines for disability accommodations under the ADA indicate that allowing employees to work from home is required: “An employer must modify its policy concerning where work is performed if such a change is needed as a reasonable accommodation, but only if this accommodation would be effective and would not cause an undue hardship.” While the courts initially seemed reluctant to follow this position, the U.S. Court of Appeals for the Sixth Circuit recently held in EEOC v. Ford Motor Company, No. 12-2484 (6th Cir. Apr. 22, 2014) that “communications technology has advanced to the point that it is no longer an ‘unusual case where an employee can effectively perform all work-related duties from home.’” Id. at 19. The Sixth Circuit concluded that there was a genuine dispute of material fact regarding whether plaintiff could perform all of her job duties from a remote location, and accordingly, reversed the district court’s grant of summary judgment on the failure-to-accommodate claim, as well as plaintiff’s retaliation claim. Id.

This ruling is important for employers in EEOC litigation.

Background

From 2003 to 2009, Jane Harris worked as a resale buyer for Ford, serving as an intermediary between steel suppliers and the companies that use steel to produce parts for Ford. Id. at 2, 6. Her job duties involved some individual tasks, but the essence of the job was group problem-solving, which required that a buyer be available to interact with members of the resale team, suppliers and others in the Ford system when problems arose. Id. at 2. Harris’ reviews showed that she was a consistently competent employee who could afford to improve in some areas. Id. at 3. 

Throughout her entire period of employment with Ford, Harris suffered from irritable bowel syndrome (“IBS”), an illness that causes fecal incontinence, causing her to accumulate absences. Id. at 3. Over time her symptoms worsened and she began taking intermittent FMLA leave. Id. After first allowing Harris to telecommute on a trial basis, Harris’s supervisor determined that Harris was unable to establish regular and consistent work hours and Harris again accumulated excessive absences. Id. at 4. In 2009, Harris formally requested that she be allowed to telecommute as an accommodation for her IBS. Id. at 5. After Harris rejected several alternatives offered by Ford, including moving Harris’s cubicle closer to the restroom or seeking another job within Ford more suitable for telecommuting, Ford declined her request determining that Harris’s position required in-person communication. Id. at 5, 10. Subsequently, in April 2009, Harris filed a charge of discrimination with the EEOC. Id. at 6. Thereafter, Harris’s performance review categorized her as a “lower achiever” and she was placed on a 30 day performance improvement plan and subsequently terminated for failure to meet the plan’s objectives. Id. In 2011 the EEOC filed a complaint in the U.S. District Court for the Eastern District of Michigan, alleging that Ford violated the ADA by failing to accommodate Harris’s disability and by retaliating against her for filing a charge with the EEOC. Id. Ford moved for summary judgment on both claims, and the district court granted summary judgment. Id.

The Sixth Circuit’s Opinion

The Sixth Circuit first examined whether Harris met the requirements for her failure-to-accommodate claim. Id. at 7. After finding Harris indisputably disabled under the ADA, the Sixth Circuit found that Harris had presented evidence to establish that she was qualified on two alternative bases: (a) she was qualified for the position after the elimination of the requirement that she be physically present at Ford facilities, or (b) she was qualified for the position with a telecommuting accommodation. Because Harris provided sufficient evidence to create a genuine dispute of material fact as to her qualification for the resale buyer position, the burden was shifted to Ford to prove that either (i) the physical-presence requirement is an essential function of Harris’s job or (ii) the telecommuting arrangement would create an undue hardship. Id. at 8.

The Sixth Circuit found that Ford failed to demonstrate either. Although the Sixth Circuit recognized that regular attendance at the workplace is undoubtedly essential for most positions, attendance at the workplace can no longer be assumed to mean attendance at the employer’s physical location, as it once was. Id. at 9-10. Thus, the question was not whether “attendance” was an essential job function for a resale buyer, but whether physical presence at the Ford facilities was truly essential. The Sixth Circuit determined that advancing technology has diminished the necessity of in-person contact to facilitate group conversations; thus, positions that require a great deal of teamwork are not inherently unsuitable to telecommuting arrangements. Id. at 10. The Sixth Circuit concluded that the EEOC offered enough evidence to dispute Ford’s conclusion that Harris’s position required face-to-face interactions at Ford and with clients. Id. at 10-11. Similarly, the Sixth Circuit explained that while it may have previously concluded that telecommuting would not be an acceptable reasonable accommodation for most jobs, the class of cases in which an employee can fulfill all requirements of the job while working remotely has greatly expanded and the EEOC presented sufficient evidence to create a genuine factual dispute as to whether Harris was one of those employees who can effectively work from home. Id. at 11. In rejecting Ford’s argument that Harris’s previous attendance issues demonstrated she was not a suitable candidate for telecommuting, Ford could not use Harris’s past attendance issues as a basis to deny her accommodation because her absences were related to her disability. Id. at 15-16. Finally, the Sixth Circuit opined that the alternatives offered by Ford did not reasonably accommodate her disability. Id. at 17.

Turning to Harris’s retaliation claim, the Sixth Circuit found that when viewed in a light favorable to Harris, the evidence suggested that Harris’s performance failings did not actually motivate Ford’s decisions to discipline her and terminate her employment. Although many of Harris’s performance deficiencies were ongoing problems, they prompted a negative review only after Harris filed her EEOC  charge. Id. at 21. The Sixth Circuit held that the evidence presented created a genuine dispute as to whether Ford was truly motivated by retaliatory intent or by a reasoned business decision to terminate an underperforming employee. Id. at 22. As a result, the Sixth Circuit reversed the district court’s grant of summary judgment to Ford, and remanded for further proceedings. Id.

Implications For Employers

This ruling demonstrates that more courts may be willing to follow the EEOC’s lead in finding that telecommuting is a viable ADA reasonable accommodation for many more jobs as technology continues to advance, particularly where the company policy includes a telecommuting option upon request and approval. As noted by the dissent, however, this could lead to companies tightening their telecommuting policies in order to avoid legal liability and fewer employees benefiting from generous telecommuting policies. Id. at 32. In the meantime, employers, when presented with the alternative of telecommuting as a reasonable accommodation of an indisputably disabled employee, should more carefully consider this alternative, and if rejected, clearly document why this alternative is not feasible for the position.

Readers can also find this post on our Workplace Class Action blog here.