Motions for Summary Judgment

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By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  In an ADA action alleging that a maker of train components discriminated against a group of applicants by regarding them as disabled, a federal district court in Illinois granted the EEOC’s partial motion for summary judgment, holding that the company’s decision to deny them work was based on improper tests concerning prospective injuries.

Employers should keep this ruling on their radar when considering medical testing in the job application process.

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In EEOC v. Amsted Rail Co., No. 3:14-CV-1292, 2017 U.S. Dist. LEXIS 189713 (S.D. Ill. Nov. 16, 2017), Amsted made conditional job offers to thirty-nine applicants (the “Claimants”) for chipper positions, but placed them on medical hold because of abnormal results from a nerve conduction test (“NCT”).  Id. at *2-6.  The EEOC argued that Amsted violated the ADA by not hiring the Claimants on the basis of disability in regards to job application procedures and hiring.  Id. at *7-8.  Amsted justified its refusal to hire the Claimants by asserting there was a higher risk of developing carpal tunnel syndrome (“CTS”) for those with abnormal NCT results.  After both parties cross-moved for summary judgment, Judge J. Phil Gilbert of the U.S. District Court for the Southern District of Illinois granted in part the EEOC’s motion for partial summary judgment, holding that the NCT did not indicate the Claimants’ contemporaneous inability to perform the chipper job, but only a prospective, future threat to their health if they were to perform the job. 

This ruling illustrates that employers must be careful not to make hiring decisions based on the potential of future medical injuries.

Case Background

Amsted employs “chippers” to finish the surfaces of the steel side frames for railcar components.  Id. at *3.  Chippers use pneumatically powered tools, such as 12-pound sledgehammers, to perform their jobs.  The work requires intensive use of the hands and arms, and includes exposure to vibrations.  In 2010 and 2011, during a hiring surge, Amsted offered employment to applicants who had the necessary skills and experience, but the offers were contingent on their passing a medical examination and other tests.  Id.  The medical examination aimed, in part, to determine applicants who were at higher risk of developing CTS, one of the risks of jobs that require intensive use of the hands and exposure to vibrations.  Amsted contracted with an outside medical company to conduct on-site medical exams, which included a medical history questionnaire, measuring vital signs, vision and hearing assessments, a physical examination, and an NCT.

Applicants whose NCT was “abnormal” were put on “medical hold pending further data” regardless of any other information obtained in the examination.  Id. at *4.  This was done because the medical testing company believed abnormal NCT tests indicated that an applicant was “right on the verge of” developing CTS and losing the use of his hand.  Id.  Amsted was aware that applicants were being placed on hold because of an abnormal NCT result and authorized this use of the NCT results.  Applicants who did not return with normal NCT results were not hired.  Amsted did not hire any applicants who did not test normal on an NCT.

The EEOC alleged that Amsted violated the ADA when it denied the Claimants employment on the basis of their disability rather than an individualized assessment.  Id. at *7.  The EEOC argued that an abnormal NCT result was an inappropriate basis for making employment decisions.  It further alleged that Amsted was not concerned with worker safety, but rather with reducing workers’ compensation costs.  Amsted challenged the EEOC’s ability to prove all elements of its ADA case, including that the Claimants were qualified because they did not pose a direct threat.  Id. at *9.  As such, both parties cross-moved for summary judgment. 

The Court’s Decision

The Court granted in part the EEOC’s motion for partial summary judgment.  With the exception of one Claimant, Amsted did not challenge whether the EEOC had sufficient evidence to prove the Claimants were disabled.  Id. at *10.  The Court rejected Amsted’s challenge relative to the lone Claimant, noting that because Amsted conceded it refused to hire the Claimant because it feared he posed a safety risk in light of his prior CTS diagnosis and corrective surgery, no reasonable jury could fail to find that it regarded him as disabled  Id. at *11.  Regarding the element that the Claimants be qualified, the Court opined that the relevant case law established that the qualification question focuses on the individual’s condition at the time of the defendant’s employment decision, regardless of what may happen to the individual in the future.  Id. at *15.

In addition, the Court addressed the adverse employment action element.  Id. at *18.  Amsted argued that the Claimants were not subject to an adverse employment action because they were not rejected for employment but were simply put on medical hold pending receipt of further medical information.  The EEOC argued that Amsted’s placement of Claimants on medical hold was an adverse employment action because it effectively foreclosed future employment as a chipper.  Agreeing with the EEOC, the Court held that “[t]he evidence show[ed] that the Claimants’ placement on medical hold due to an abnormal NCT result was an adverse employment action because it effectively precluded them from being hired.”  Id. at *19. 

Finally, the Court explained that the EEOC must show but-for causation in order to prevail.  Id. at *20.  Amsted argued that the EEOC could not establish a discriminatory intent because the company relied in good faith on medical judgments that the Claimants were unable to safely perform the essential functions of the chipper job or had certain medical restrictions.  The Court rejected this argument, holding that Amsted took the Claimants out of the applicant pool because of its perception that they were disabled.  Accordingly, the Court granted in part the EEOC’s motion for partial summary judgment.

Implications For Employers

In its Strategic Enforcement Plan for Fiscal Years 2017-2021, the EEOC identified eliminating barriers in recruitment and hiring as one of its six enforcement priorities (as we blogged about here).  For employers in industries where an applicant’s medical background may be important, it is crucial for those employers to keep the EEOC’s strategic priorities in mind.  When employers make hiring decisions based on the potential for future injuries, such as the employer here, they significantly increase their likelihood of facing EEOC-initiated ADA litigation.  As such, employers should be exercise caution when implementing medical testing procedures for applicants, and ensure such procedures are lawfully conducted.

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

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  After an employer circulated a letter to 146 employees discussing an employee’s EEOC Charge that alleged discrimination on the basis of his disability in violation of the ADA, a federal district court in Connecticut denied both parties’ motions for summary judgment.

This ruling provides valuable lessons for employers on the risks of widespread internal communication regarding pending EEOC charges.

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In EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-1416, 2017 U.S. Dist. LEXIS 133918 (D. Conn Aug. 22, 2017), a Day & Zimmerman NPS, Inc. (“DZNPS”) employee filed a charge with the EEOC alleging that DZNPS violated the ADA by denying him a reasonable accommodation.  As part of its investigation of the Charge, the EEOC sought information from DZNPS, including the names and contact information of other DZNPS employees.  Prior to providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 employees that identified the Charging Party by name, and noted that he had filed a charge of discrimination with the EEOC.  The EEOC alleged that by sending the letter, DZNPS retaliated against the employee for filing a charge with the EEOC in violation of the ADA and interfered with the Charging Party and letter recipient employees’ exercise and enjoyment of rights protected by the ADA.

As we previously blogged about here, the Court previously denied DZNPS’s motion to dismiss.  After the EEOC filed a motion for partial summary judgment on its interference claim under the ADA, and DZNPS filed a motion for summary judgment as to the Complaint in its entirety, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied both parties’ motions for summary judgment.

For employers considering whether to communicate internally about the pending EEOC charges, this ruling illustrates they should be careful to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

Case Background

In or around the fall of 2012, DZNPS hired 147 temporary electricians, including the Charging Party, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”).  Id. at *4.  After the Charging Party began training for the position, he provided a doctor’s note to a DZNPS representative indicating that he could not work around radiation.  The note requested a reasonable accommodation.  After receiving the doctor’s note and the request for a reasonable accommodation, DZNPS terminated the Charging Party’s employment.

In October 2012, the Charging Party filed a charge of discrimination with the EEOC, alleging that DZNPS failed to accommodate his disability reasonably and unlawfully terminated his employment.  Id. at *5.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  Id. at *6-7.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator, and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.

The EEOC moved for partial summary judgment on its interference claim under the ADA.  DZNPS moved for summary judgment as to the Complaint in its entirety, arguing that: (1) the EEOC’s legal theories would violate DZNPS’s free speech rights under the First Amendment of the United States Constitution; (2) that the June 2014 letter is protected by the litigation privilege under Connecticut law; (3) that the EEOC cannot, as a matter of law, make out a claim for retaliation under the ADA; (4) that the EEOC cannot, as a matter of law, make out a claim for interference under the ADA; and (5) that the EEOC lacks standing to bring this case under Article III of the United States Constitution.

The Court’s Decision

The Court denied both parties’ motions for summary judgment.  First, the Court rejected DZNPS’s claim that the EEOC lacked Article III standing to bring the case because no punitive or compensatory damages were available to the EEOC.  Id. at *13-14.  The Court noted that DZNPS cited to no legal authority supporting that proposition.  DZNPS also argued that if the Court found that its sending of the letter was either retaliation or interference in violation of the ADA, then the Court would be establishing a content and speaker-based restriction on speech that violated the First Amendment.  The Court rejected this argument on the basis that DZNPS identified no authority supporting its argument that the First Amendment protects speech from a defendant if that speech gives rise to liability under the ADA or other employment discrimination statutes.  Id. at *16-19.  Further, after analyzing Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), and subsequent cases interpreting Gulf Oil, the Court held that the Gulf Oil line of cases did not prevent courts from imposing restrictions on employer communications in situations where those communications could amount to “coercion” or prevent employees from exercising their rights.  Id. at *20-22.

Turning to the ADA retaliation claim, DZNPS argued that there was no genuine dispute of material fact that the EEOC would not be able to establish the third and fourth prongs of the prima facie case of retaliation under the ADA, either an adverse employment action or a causal connection between the protected activity and the adverse employment action.  Id. at *26-28.  DZNPS also argued that, even if the EEOC showed a genuine dispute of material fact as to the prima facie case for retaliation, the EEOC did not rebut DZNPS’s legitimate non-retaliatory reasons for sending the letter.  The Court found that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable factfinder could determine that such conduct constitutes an adverse employment action.  In regards to DZNPS’s proffered legitimate, non-discriminatory reason for sending the letter, to “minimize business disruption” and notify the recipients that DZNPS had disclosed their “home telephone numbers and addresses . . . to the EEOC,” the Court found that a reasonable jury could also conclude that DZNPS’s explanation was pretextual because the letter did not need to explain that recipients need not speak to the EEOC investigator and that counsel for DZNPS could be present if the recipient chose to speak to the EEOC.  Id. at *34.

Finally, the Court addressed both parties’ motion for summary judgment on the ADA interference claim.  Id. at *35-39.  The EEOC argued that DZNPS interfered with the rights under the ADA of all the letter recipients because a reasonable jury would need to conclude that the letter had a tendency to chill recipients from exercising their rights under the ADA.  Citing its previous order denying DZNPS’s motion to dismiss, where the Court held that the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA, the Court found that a reasonable jury could conclude that the letter could have the effect of interfering with or intimidating the letter’s recipients with respect to communicating with the EEOC about possible disability discrimination by DZNPS.  Accordingly, explaining that because this question should be reserved for the jury, the Court denied both parties’ motions for summary judgment.

Implications For Employers

For employers considering whether to internally disclose information on a widespread basis regarding charges of discrimination filed by employees, this ruling should serve as a cautionary tale.  Further, it illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of motions for summary judgment.  As such, employers should exercise caution when considering when and to whom it should internally disclose information about pending administrative charges.

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

armor-158430__340By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  In a sexual harassment lawsuit brought by the EEOC, the Sixth Circuit affirmed a U.S. District Court’s grant of an employer’s motion for summary judgment after finding that the harassing employee was not a supervisor under Title VII, and therefore the company was not vicariously liable for his actions. It is a decidedly pro-employer ruling.

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In EEOC v. AutoZone, Inc., No. 16-6387 (6th Cir. June 9, 2017), the EEOC alleged that AutoZone was liable under Title VII for a store manager’s alleged sexual harassment of three female employees.  After the U.S. District Court for the Western District of Tennessee granted the employer’s motion for summary judgment, the EEOC appealed.  The Sixth Circuit affirmed the District Court’s grant of summary judgment, finding that because the store manager did not take any tangible employment action against his co-workers and had no authority to do so, he was not a supervisor under Title VII, and thus AutoZone was not vicariously liable for the conduct alleged.  The Sixth Circuit further held that even if the store manager was found to be a supervisor under Title VII, AutoZone established an affirmative defense to liability.

For employers facing EEOC lawsuits alleging that they are vicariously liable for sexual harassment claims brought against employees with managerial job titles, yet who have limited authority to take tangible employment actions, this ruling can be used as a blueprint to attack such claims in motions for summary judgment.

Case Background

In May 2012, AutoZone transferred a store manager to its Cordova, Tennessee location.  Id. at 2.  The store manager could hire new hourly employees and write up employees at the store for misbehaving, but could not fire, demote, promote, or transfer employees.  Authority over firing, promoting, and transferring rested with the district manager for the store.

After an employee claimed that the store manager made lewd comments to her, AutoZone internally investigated the allegations.  As part of AutoZone’s internal investigation, two other female employees who worked at the Cordova location confirmed that the store manager made lewd sexual comments.  Despite his denial of the allegations, AutoZone ultimately transferred and terminated the store manager.  Thereafter, the EEOC brought a lawsuit alleging that AutoZone subjected the three female employees to sexual harassment.  Following discovery, AutoZone moved for summary judgment.  The District Court granted AutoZone’s motion for summary judgment, finding that the store manager was not a supervisor under Title VII and therefore AutoZone was not vicariously liable for his actions.  The EEOC appealed the District Court’s grant of summary judgment to the Sixth Circuit.

The Sixth Circuit’s Decision

The Sixth Circuit affirmed the District Court’s grant of AutoZone’s motion for summary judgment.  First, the Sixth Circuit instructed that under Title VII, if the harassing employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions, or in other words, if the employer knew or should have known of the harassment yet failed to take prompt and appropriate corrective action.  Id. at 4 (internal quotation marks and citation omitted).  However, if the harasser is the victim’s supervisor, a non-negligent employer may become vicariously liable if the agency relationship aids the victim’s supervisor in his harassment.  Id.  The Sixth Circuit further explained that an employee is a “supervisor” for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.  Id.

Applied here, the Sixth Circuit found that AutoZone did not empower the store manager to take any tangible employment action against his victims since he could not fire, demote, promote, or transfer any employees.  Id. at 5.  Further, the Sixth Circuit held that the store manager’s ability to direct the victims’ work at the store and his title as store manager did not make him the victims’ supervisor for purposes of Title VII.  The Sixth Circuit also noted that while the store manager could initiate the disciplinary process and recommend demotion or promotion, his recommendations were not binding, and his ability to influence the district manager did not suffice to turn him into his victims’ supervisor.  Id. at 5-7.  Finally, the Sixth Circuit held that the store manager’s ability to hire other hourly employees was irrelevant since he did not hire the employees he harassed.  Id. at 7.

After finding that the store manager was not a supervisor for purposes of Title VII, the Sixth Circuit further held that even if he was found to be a supervisor, AutoZone established an affirmative defense to liability.  The defense has two elements: (1) that the employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and (2) that the harassed employees unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.  Id.  The Sixth Circuit held that AutoZone met the first element by utilizing an appropriate anti-harassment policy to prevent harassment, and by transferring and later terminating the store manager promptly after it investigated the allegations.  Regarding the second element, the Sixth Circuit held that AutoZone satisfied this prong since the victims failed to report the store manager’s behavior for several months.  The Sixth Circuit thus held that AutoZone established an affirmative defense to liability.  Accordingly, the Sixth Circuit affirmed the District Court’s grant of AutoZone’s motion for summary judgment.  Id. at 10.

Implications For Employers

Employers often utilize employees that may be “managers” in title, yet do not have the authority to take tangible employment actions.  When those employers are sued by the EEOC for the conduct of managers with limited authority, this ruling can be used to argue that such employees are not “supervisors” under Title VII, and therefore the employer is not vicariously liable for their actions.  Nonetheless, given the EEOC’s aggressiveness in attempting to use the theory of vicarious liability to hold “deep-pockets” large-scale employers liable for the conduct of employees, employers would be prudent to invest in harassment-prevention training to minimize the likelihood of such behavior occurring.  But in the event that such incidents of harassment arise and lead to EEOC lawsuits, employers can use this decision to tailor their arguments to focus on the authority of the harasser, as opposed to his or her job title.

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

gavel on white backgroundBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Alex W. Karasik

Seyfarth Synopsis:  A federal district court in Illinois recently granted the EEOC’s motion for partial summary judgment in EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), relative to two defenses advanced by an employer, including: (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer. The ruling should be required reading for any employer facing or engaged in litigation with the Commission.

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An increasingly common issue in EEOC litigation against employers involves the scope of the Commission’s lawsuits as related to the charges of discrimination, as well as the EEOC’s conciliation efforts, or lack thereof.  In EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), the EEOC moved for partial summary judgment regarding two defenses enumerated by the defendant, Dolgencorp, LLC (“Dollar General”): (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer.  On April 10, 2017, Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois granted the EEOC’s motion for partial summary judgment as to these defenses asserted by Dollar General.

As Judge Wood acknowledged, many courts across the country have embraced defenses asserted by employers relating to the sufficiency of the EEOC’s investigation.  However, this ruling demonstrates that not all courts may be as receptive to those arguments.

Case Background

Two former Dollar General employees filed charges of discrimination with the EEOC regarding Dollar General’s allegedly discriminatory use of criminal background checks in hiring and firing determinations.  Id. at 1.  The EEOC investigated and determined that there was reasonable cause to believe that Dollar General had engaged in employment discrimination on the basis of race. The parties then engaged in written and oral communications regarding the alleged discrimination, which did not result in a conciliation agreement acceptable to the EEOC.  Id. at 2.  Thereafter, the EEOC brought a lawsuit against Dollar General under Title VII.

Amongst its enumerated defenses, Dollar General asserted that the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation (its 7th enumerated defense), and that the EEOC failed to satisfy the statutory precondition for bringing suit when it failed to conciliate with Dollar General (its 8th enumerated defense). The EEOC moved for partial summary judgment as to Dollar General’s two enumerated defenses.  Id. at 3. The EEOC contended that, on the undisputed facts, these two defenses failed as a matter of law.

The Court’s Decision

The Court granted the EEOC’s motion for partial summary judgment regarding Dollar General’s two enumerated defenses.  Dollar General’s seventh enumerated defense relied upon two separate propositions: first, the EEOC’s claims were barred because they went beyond the claims delineated in the charges of discrimination that generated the EEOC’s lawsuit; and second, the EEOC’s claims were barred because the EEOC failed to investigate those claims adequately prior to bringing suit.  Id. at 4.  The Court rejected the first proposition, holding that when the EEOC files suit, it is not confined to claims typified by those of the charging party, and further, that any violations that the EEOC ascertains in the course of a reasonable investigation of the charging party’s complaint are actionable.  Id.  As to the second proposition, the Court similarly opined that the Seventh Circuit has held that if courts may not limit a suit by the EEOC to claims made in the administrative charge, they likewise cannot limit the suit to claims that are found to be supported by the evidence obtained in the Commission’s investigation.  Id.  Accordingly, the Court rejected Dollar General’s defenses insofar as it sought to dismiss the EEOC’s claims because they went beyond the charges of discrimination or because they were not subject to an adequate pre-suit investigation.  Id. at 4-5.

In addition, the Court addressed Dollar General’s eighth enumerated defense, which contended that the suit could not go forward because the EEOC did not satisfy its pre-suit statutory obligation to conciliate.  The EEOC sent two Letters of Determination to Dollar General that stated that the EEOC found reasonable cause to believe that Dollar General engaged in discrimination in violation of Title VII because, through application of its background check policy, a class of African-American applicants and employees were not hired, not considered for employment, or discharged.  Dollar General argued that this notice of the charge was not specific enough because it failed to identify the persons allegedly harmed and to identify the allegedly discriminatory practice.

Rejecting Dollar General’s argument regarding the specificity of notice, the Court held that the EEOC’s letters clearly set forth that there were African-American applicants and employees who were harmed by the allegedly discriminatory practice.  Id. at 6.  Further, the Court opined that as the Seventh Circuit has explained, the sufficiency of the EEOC’s investigation was not a matter for the judiciary to second-guess.  Dollar General also argued that the EEOC failed to specifically describe the allegedly discriminatory practice, and that merely pointing to the background check policy was not sufficient.  The Court rejected this argument, holding that the EEOC’s notice was sufficient since it identified the two complainants and further put Dollar General on notice that the EEOC’s allegations related to African-American applicants and employees that were not hired, not considered for employment, or discharged due to failing a background check.  Id. at 8-9.

Finally, Dollar General contended that the EEOC’s conciliation discussions were inadequate because the EEOC did not provide Dollar General with an opportunity to remedy the allegedly discriminatory practice.  Id. at 9.  Citing Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1655-56 (2015) (which we analyzed here), the Court refused to examine the sufficiency of the EEOC’s investigation, noting it was beyond the scope of its review.  Id.  The Court thus rejected Dollar General’s argument that the EEOC did not adequately engage the employer in conciliation discussions.

Accordingly, the Court granted the EEOC motion for partial summary judgment on Dollar General’s seventh and eighth enumerated defenses.

Implications For Employers

While the Court did not find in the employer’s favor, other courts have routinely held the EEOC accountable in instances where it did not fulfill its pre-suit obligations.  With rulings such as this one, it can be expected that the EEOC will continue to test courts’ willingness to force the Commission to abide by its statutory duties under Title VII.  As such, employers should continue to be aggressive in attacking instances where the EEOC improperly expands its lawsuits beyond charges or fails to conciliate.

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

thTL3V7SR1By Gerald L. Maatman, Jr. and Michael L. DeMarino

Seyfarth Synopsis:  The EEOC sued an employer for Equal Pay Act violations, claiming that Maryland Insurance Administration failed to pay three female fraud investigators the same wages as comparable male fraud investigators. On cross motions for summary judgment, the U.S. District Court for the District of Maryland denied the EEOC’s motion and granted summary judgment in favor of the employer. Although there was a pay disparity between the female investigators and the male comparators, the Court determined that reasons other than gender justified this difference. The Court also rejected the EEOC’s use of comparators with different job duties but whose positions fell within the same pay grade classification. The ruling is important for employers in the wake of the EEOC’s focus on Equal Pay Act issues.

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In E.E.O.C. v. Maryland Insurance Administration, No. 15-CV-1091 (D. Md. Oct. 11, 2016), the EEOC filed a complaint on behalf of three female fraud investigators who claimed that they were paid less than their male counterparts in violation of the Equal Pay Act of 1963, 29 U.S.C. §206(d)(1).  On cross motions for summary judgment, the Court denied the EEOC’s motion and granted summary judgment in favor of the employer. At the end of the day, the Court concluded that the EEOC had failed to show that any pay disparity was attributed to gender, observing that all of the comparable males were initially hired at a more senior level due to their weightier work experience. The  Court further rejected the EEOC’s use of comparators with different job duties but whose positions fell within the same pay grade classification

This ruling, which cites no authority and is under three pages, demonstrates that federal judges will be quick to swat down equal pay claims where the evidence indicates a non-gender-based reason for a pay disparity or when the job duties of alleged comparators are not apples-to-apples. Employers, therefore, can take some comfort in the fact that a pay disparity and broad classifications alone do not expose them to liability.

Case Background And Decision

Three fraud investigators, Alexandra Cordaro, Marlene Green, and Mary Jo Rogers, were hired in 2009, 2010, and 2011, respectively, by the Maryland Insurance Administration. Id at 1. The EEOC claimed that the employer discriminated against these women on the basis of their gender because it paid a higher salary to four other male fraud investigators (Bruno Conticello, Homer Pennington, James Hurly, and Donald Jacobs).

The EEOC and the employer both moved for summary judgment and, after briefing, the Court denied the EEOC’s motion and granted the employer’s motion  In granting summary judgment for the employer, the Court determined that “as to all of the comparable male employees to which the EEOC points, reasons other than gender justified the pay disparity between them.” Id. at 2.

Specifically, the Court explained that, even though the comparable male employees worked as fraud investigators, they were all “hired at higher steps than were Cordaro, Green, and Rogers.” Id. The Court, for example, noted that the male employees were hired at Steps 6 and above, while the female employees were hired at Steps 4 and 5. The Court observed that this, in turn, was because the male employees had more experience in working for the State, either in law enforcement or within the Administration itself. The female employees, in contrast, did not have prior State or law enforcement experience. Id. As a result, the Court concluded that these differences in prior work experience justified the pay disparity.

The Court was also critical of the other male comparators that the EEOC offered because they did not work in the same unit as the females who were allegedly underpaid. These employees worked as enforcement officers, not fraud investigators. Although the EEOC argued that these two positions were the same because they were similarly classified as “Grade 16,” the Court disagreed. Based on testimony that workers in these two positions did not perform the same job, the Court determined that these employees were not appropriate comparators. Id. at 2. Importantly, the Court explained that performing the same job was the “touchstone of the analysis under the EPA.” Id.  Crucial to the Court’s determination, therefore, was the substance of the position, not the classification. Indeed, the Court reasoned that “[t]he mere fact that jobs were reclassified . . . does not ipso facto establish a violation of the EPA.” Id. at 3. The Court additionally found these comparators inappropriate based again on their hiring level and previous experience, both of which were distinguishable from plaintiffs. Based on these factors, the Court denied the EEOC’s motion for summary judgment and granted summary judgment in favor of the defense.

Implication For Employers

This decision reaffirms the principal that pay disparity alone is not enough to give rise to liability under the Equal Pay Act. Employers are free to continue to make salary determinations based on non-gender based reasons, like prior work experience.

This ruling also demonstrates that when deciding whether two employees are comparable, it is the substance of the position that counts — not a broader classification. The fact that two positions with different job functions may fit within a similar pay grade or other designation does not alone demonstrate that the jobs are the same for purposes of the EPA. Employers, nevertheless, should take care to track differing job duties that fall under the same general classification since the EEOC continues to attempt to use these classifications as a way to manufacturer comparators.

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

thKCD34Y33By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In an EEOC religious discrimination case, a federal court found that “Onionhead” was a religion for purposes of Title VII.   The court also found that the EEOC did not fail to meet its Title VII pre-suit duties when it added to its lawsuit seven additional claimants that it discovered during its investigation of charges brought by three former employees of the company that was accused of religious discrimination.

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While most religious discrimination claims brought by the EEOC involve mainstream religions, uncommon spiritual belief programs may still be afforded protection under Title VII so long as they meet certain legal requirements. In EEOC v. United Health Programs of America, Inc. and Cost Containment Group Inc., No. 14-CV-03673 (E.D.N.Y. Sept. 30, 2016), the EEOC brought an action alleging an employer (“CCG”) discriminated against a group of former employees on the basis of religion by based on concepts known as “Onionhead” and “Harnessing Happiness.”  Judge Kiyo A. Matsumoto of the U.S. District Court for the Eastern District of New York granted the EEOC’s motion for partial summary judgment as to the discrete issue of whether these beliefs constituted a religion, while granting in part and denying in part CCG’s motion for summary judgment as to several other claims.  Most relevant, the Court denied CCG’s motion for summary judgment regarding the EEOC’s late addition of seven claimants that it discovered during its investigation of the three original charges of discrimination.

This ruling puts employers on notice that they must exercise extreme caution regarding spiritual beliefs in the workplace, even if the beliefs are not derived from a mainstream religion.  Further, it illustrates that employers have an uphill battle when challenging the EEOC’s pre-suit investigations as courts will not closely scrutinize such efforts.

Case Background

CCG is small wholesale company that provides discount medical plans.  Beginning around 2007, CCG executives determined that their corporate culture was deteriorating.  To fix this issue, CCG hired its CEO’s aunt, who had developed a program called Onionhead that CCG began to utilize in its workplace.  CCG described Onionhead as a multi-purpose conflict resolution tool, while plaintiffs characterized it as a system of religious beliefs and practices.  Although Onionhead was initially geared towards children, CCG expanded the program to apply it to adults, and it further became known as “Harnessing Happiness.”

The claimant employees alleged that Onionhead and Harnessing Happiness required to them do things like use candles instead of lights to prevent demons from entering the workplace; conduct chants and prayers in the workplace; and respond to emails relating to God, spirituality, demons, Satan, and divine destinies.  Id. at 7, 11-12.  The claimants alleged they were terminated either because they rejected Onionhead’s beliefs or because of their own non-Onionhead religious beliefs, while other employees who followed Onionhead were given less harsh discipline.  After three former employees filed charges of discrimination in 2011 and 2012, the EEOC issued a letter of determination on March 13, 2014.  After unsuccessful conciliation efforts, the EEOC filed suit on October 9, 2014 on behalf the three employees who filed charges of discrimination and an additional seven employees that it discovered during its investigation.  The EEOC subsequently moved for summary judgment as to the specific issue of whether Onionhead was a religion for purposes of Title VII.  CCG cross-moved for summary judgment as to several other claims involving religious discrimination.

The Decision

The Court granted the EEOC’s motion for partial summary as to the discrete issue of whether the Onionhead beliefs constituted a religion.  After discussing Title VII’s application to religious discrimination, the Court noted that the former employees asserted claims under a variety of theories, including disparate treatment, hostile work environment, failure to accommodate, and retaliation.  Id. at 15.  First, the Court sought to determine what constitutes a religious belief under Title VII.  Rejecting CCG’s argument that a narrow definition should apply, the Court opined that to determine whether a given set of beliefs constitutes a religion for purposes of Title VII, “courts frequently evaluate: (1) whether the beliefs are sincerely held and (2) whether they are, in [the believer’s] own scheme of things, religious.”  Id. at 23 (quoting Patrick v. LeFevre, 745 F.2d 153, 157 (2d Cir. 1984)).

Applying the Patrick framework here, the Court found that Onionhead qualified as a religion for purposes of Title VII.  Id. at 31-32.  Addressing the first prong, whether the beliefs were sincerely held, the Court noted that, “a reasonable jury could find that by inviting [the CEO’s aunt] into the workplace, paying her to meet and conduct workshops, authorizing her to speak to employees about matters related to their personal lives, disseminating Onionhead/Harnessing Happiness material and directing employees to attend group and individual meetings with [his aunt], [the CEO] and his upper management held sincere beliefs in Onionhead and Harnessing Happiness.”  Id. at 35-36.  As to the second prong, which contemplates whether the nature of the beliefs qualifies as religious, the Court concluded that the beliefs were religious within the meaning of Title VII.  Id. at 36.  In reaching this conclusion, the Court discussed the emails about God, spirituality, Satan, divine destinies, etc.; noted how the CEO’s aunt referred to herself as a “spiritual advisor”; cited claimants’ testimony that they were told to pray in the workplace; and quoted numerous Onionhead publications.  Id. at 36-41.  Accordingly, the Court found that Onionhead was a religion for purposes of Title VII.  Id. at 43.

Next, the Court addressed CCG’s motion for summary judgment as to the individual claims asserted by claimants, which alleged that the EEOC failed to fulfill its Title VII pre-suit investigation, reasonable cause determination, and conciliation requirements for several claimants.  Id. at 43-45.  Noting that, “[c]ourts have permitted the EEOC to add new claimants identified during discovery even when the EEOC is asserting claims under Section 706 of Title VII,” the Court held that given “the circumstances present in the instant case, the EEOC was not precluded from identifying new claimants (whose claims were effectively identical to the claims of the pre-existing claimants) after filing this action.”  Id. at 46-47.  In doing so, the Court rejected CCG’s reliance on EEOC v. CRST Van Expedited Inc., 679 F.3d 657, 674 (8th Cir. 2012), and distinguished on the grounds that “[t]he EEOC’s attempt in CRST to add 67 claimants to an EEOC action filed two years earlier and naming a single individual is a far cry from the situation presented in this action, where the EEOC’s investigation undisputedly encompassed seven of the ten claimants and the additional three claimants’ allegations arise out of the same alleged course of conduct, in the same office, by the same individuals, and during a time period already covered by the charges in the initial complaint.”  Id. at 48-49.  Thus, citing the narrow scope of review courts are permitted when reviewing the sufficiency of EEOC investigations, the Court denied CCG’s request to dismiss the late-discovered claimants.

The Court also discussed at great length CCG’s motion for summary judgment as to multiple reverse discrimination claims.  The Court denied CCG’s motion for summary judgment as to eight claimants’ reverse discrimination claims and all claimants’ hostile work environment claims premised on reverse religious discrimination.  Id. at 101.  Further, the Court denied CCG’s motion for summary judgment with respect to one claimant’s disparate treatment and retaliation claims premised on her Catholicism, but granted CCG’s motion for summary judgment with respect to the same claimant’s hostile work environment and failure to accommodate claims.  Id. at 102.  Finally, the Court granted CCG’s motion for summary judgment against all other claimants on their claims that they suffered discrimination based on claimants’ religious beliefs or lack thereof.  Id. at 102.

Implications For Employers

Whether or not this blog post has caused you to consider a conversion to Onionhead, the implications from this ruling are crucial for employers in two regards.  First, the finding that Onionhead is a religion should put employers on notice that when considering beliefs claimed by an employee and programs implemented by an employer, courts can and will utilize an expansive definition of what constitutes a “religious belief” for purposes of Title VII discrimination litigation.  Second, employers can expect the EEOC to use this ruling to aggressively seek to expand its lawsuits beyond the original complaining employees and try to include any similarly aggrieved employees it uncovers during investigations.  Accordingly, the twofold impact of this ruling should alert employers to expect more aggressive religious discrimination litigation from the EEOC, who will also seek to expand the size of its lawsuits given that its investigations are subject to limited judicial scrutiny.

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

thPBYES7VQBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: After the EEOC brought an action under the Americans With Disabilities Act against an employer who implemented a wellness program requiring employees to take a health assessment to participate, the Court granted the employer’s motion for summary judgment and denied the EEOC’s motion for summary judgment after finding that the program was voluntary. As such, the ruling is a bench-slap to the Commission in terms of its position on challenging wellness programs.

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After an employer in Wisconsin implemented a wellness program that required employees to take a health risk assessment if they wanted to participate, the EEOC brought an action under the Americans With Disabilities Act (“ADA”), which generally prohibits employers from requiring employees to undergo medical examinations.  In EEOC v. Orion Energy Systems, Inc., No. 14-CV-1019 (E.D. Wis. Sept. 19, 2016), Judge William C. Griesbach of the U.S. District Court for the Eastern District of Wisconsin granted in part employer Orion Energy Systems, Inc.’s (“Orion”) motion for summary judgment and denied the EEOC’s motion for summary judgment.

This ruling illustrates that for employers who implement wellness programs that require employees to take a health assessment if they wish to participate, those medical examinations do not violate the ADA as long as the program is voluntary.

Case Background

In 2008, Orion switched from a fully insured health plan to a self-insured health plan.  In 2009, Orion implemented a multi-faceted wellness program.  Relevant here, employees would have to either complete a health risk assessment (“HRA”) at the beginning of the insurance year or pay the entire monthly premium equivalent amount.  Employees who completed the HRA paid no premium equivalent, but still had to pay their own deductibles, co-pays and out-of-pocket expenses.  The HRA consists of a health history questionnaire and biometric screen involving a blood pressure check, body measurements, and blood analysis. Orion did not receive any personally-identifiable information as a result of the HRA, as the information was compiled by outside entities who then transmitted it to Orion in an anonymous format.  The anonymous, aggregated data allowed Orion to see the percentage of participants in its plan who had particular health risks such as high cholesterol, identify common health issues, and offer employees educational tools to improve their health.

In the spring of 2009, only one Orion employee chose to opt-out of the program.  Orion management spoke with the employee regarding negative comments the employee made to co-workers about the amount of the premium being charged by Orion.  The employee claimed she was told during this meeting to keep her opinions about the new wellness program to herself, while Orion claimed that such negativity was not welcome in the workplace, and that if the employee had concerns, she needed to speak with someone in management.  The employee later sent an e-mail criticizing the tactics of Orion’s former CEO.  Shortly thereafter, the employee was terminated.

The EEOC brought suit against Orion alleging it violated the ADA by requiring employees who elect to enroll in Orion’s self-insured health insurance plan to either complete the HRA or pay 100 percent of their monthly premium amount.  The EEOC also alleged that Orion violated the ADA’s anti-retaliation provisions, 42 U.S.C. § 12203(a) and (b), by instructing the employee not to discuss her concerns about the legality of this requirement with co-workers and by terminating her employment shortly after she voiced opposition to Orion’s wellness program.  Orion contended that its requirement that employees who elect to receive health insurance from Orion either participate in the wellness program or pay the full premium amount was lawful under the ADA’s insurance “safe harbor” provision, which allows self-insured organizations to administer benefits plans, or alternatively, that its wellness program is voluntary under 42 U.S.C. § 12112(d)(4)(B).  Both parties moved for summary judgment.

The Decision

The Court granted in-part Orion’s motion for summary judgment and denied the EEOC’s motion for summary judgment.  Initially, the Court explained that Section 12112(d)(4)(A) of the ADA “shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability . . . unless such examination or inquiry is shown to be job-related and consistent with business necessity,” but that Section 12112(d)(4)(B) permits employers to conduct “voluntary medical examinations . . . which are part of an employee health program available to employees at that work site.”  Id. at 6-7.  The EEOC argued that the HRA was not “voluntary” given that Orion shifted 100 percent of the health benefit premium to employees who opted out.  Orion argued its wellness initiative did not violate the ADA for three reasons: (1) the ADA’s safe harbor relating to insurance applied to the challenged aspects of the wellness program; (2) Orion did not “make inquiries” since it received only anonymous, aggregated results from the HRA; and (3) the wellness program was voluntary because Orion’s employees had a choice regarding whether to participate and sufficient time to make that choice.

Regarding the safe harbor provision, the Court rejected Orion’s argument and found that the safe harbor provision did not apply to Orion’s wellness program.  Citing Congressional intent, the Court noted that the safe harbor provision was a limited exception that was created to protect the basic business operations of insurance companies, and that generally, wellness programs are unrelated to basic underwriting and risk classification.  Id. at 15 (citations omitted).  Applied here, the Court found that the wellness program was not used to underwrite, classify, or administer risk.  Id.  The Court explained that “[i]f an employee refused to complete the HRA and participate in the wellness plan, she could still be a member of Orion’s insurance plan, provided she pay the full premium amount. In short, Orion’s wellness program was wholly independent from its insurance plan.”  Id. at 16.

Next, the Court addressed Orion’s argument that even if its wellness initiative was not immune under the safe harbor provision, Orion’s program was still voluntary.  Id. at 17.  The EEOC argued that the wellness program was involuntary because shifting 100 percent of the premium cost to an employee who opted out of a program was so substantial that Orion’s offer to pay the health benefit premium in exchange for the employee’s participation in the program is more than a mere incentive.  The Court rejected the EEOC’s argument, noting that, “even a strong incentive is still no more than an incentive; it is not compulsion,” and that, “Orion’s wellness initiative is voluntary in the sense that it is optional.”  Id. at 18.  Accordingly, the Court found that Orion was entitled to summary judgment and rejected the EEOC’s claim that the wellness program, including the HRA, violated § 12112(d)(4)(A).

Finally, in regards to the EEOC’s retaliation and interference claims, Orion argued that the employee was not engaged in any protected activity by complaining about aspects of the program that were lawful.  The Court rejected Orion’s argument, noting it was “undisputed that [the employee] expressed concern about the confidentiality of her medical information under the new wellness initiative. As that is a legitimate concern under the ADA, i.e., something the ADA actually does govern, her expression may have been protected.”  Id. at 20.  Accordingly, the Court denied Orion’s motion for summary judgment as to the retaliation and interference claims.

Implications For Employers

Employer’s implementing wellness programs absolutely need to pay attention to decisions such as this one.  So long as participation in the program and any accompanying health assessment are truly voluntary, employers can utilize such wellness programs without violating the ADA.  Nonetheless, employers must be cautious in making sure their programs are truly voluntary or else face this risk of EEOC litigation.

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

United_States_District_Court_for_the_Eastern_District_of_Michigan_sealBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In one of the first two ever transgender discrimination cases brought by the EEOC, a federal court in Michigan granted the employer’s motion for summary judgment, finding the employer met its burden in demonstrating that it is exempt under the Religious Freedom Restoration Act, while the EEOC failed to suggest a less restrictive alternative in its challenge of the employer’s gender-specific dress code policy.

In one of the first two ever transgender discrimination cases brought by the EEOC, the government alleged that a funeral home wrongfully terminated its former funeral director for being transgender, for transitioning from male to female, and/or for not conforming to the employer’s gender-based preferences regarding its dress code.  The funeral home argued it was exempt under the Religious Freedom Restoration Act (“RFRA”).  In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 14-13710 (E.D. Mich. Aug. 18, 2016), after the EEOC and employer R.G. & G.R. Harris Funeral Homes, Inc. (“the Funeral Home”) both moved for summary judgment, Judge Cox of the U.S. District Court for the Eastern District of Michigan granted the Funeral Home’s motion and denied the EEOC’s motion.  The court also dismissed the EEOC’s claim that the Funeral Home engaged in an unlawful employment practice by providing work clothes only to males, noting that the EEOC had not done a full investigation of this claim that it uncovered during its wrongful termination investigation.

Although transgender discrimination litigation is not yet explicitly covered under Title VII, this ruling is monumental in terms of shaping the landscape for an evolving area of law that will profoundly impact employers in years to come.

Case Background

The Funeral Home is a closely-held, for-profit corporation operating three funeral homes in Michigan.  Id. at 7.  Owner and operator Thomas Rost has been a Christian for over sixty-five years.  Id. at 15.  While the Funeral Home does not officially affiliate with a religion, its website contains scripture and various bible verses are dispersed at its locations.  Id.  The Funeral Home has a strict employee dress code policy with several requirements, including that men must wear suits and women must wear jackets and skirts/dresses.  Id. at 8-9.

The claimant was hired in 2007.  Id. at 9.  In 2013, the claimant provided the Funeral Home with a letter stating he intended to begin transitioning his gender to female following return from a vacation.  Id. at 10.  Although the claimant intended to abide by the gender-specific dress code by wearing a skirt during the transition, Rost fired the claimant, stating “this is not going to work out.”  Id. at 11.

The claimant filed a charge of sex discrimination with the EEOC.  During its investigation, the EEOC discovered that male employees at the Funeral Home were provided with work clothing and that female employees were not.  The EEOC filed suit against the Funeral Home on September 25, 2014, asserting two claims.  Id. at 12.  First, it asserted a wrongful termination claim, alleging the claimant was fired because the claimant is transgender, because of the claimant’s transition from male to female, and/or because the claimant did not conform to the Funeral Home’s sex or gender-based preferences, expectations, or stereotypes.  Second, the EEOC alleged that the Funeral Home engaged in an unlawful employment practice by providing work clothes to male but not female employees.  The parties filed cross-motions for summary judgment.

The Decision

The court granted summary judgment in favor of the Funeral Home as to the wrongful termination claim, and dismissed the EEOC’s claim regarding the work clothes being provided only to males.  Id. at 55-56.  First, the Funeral Home asserted that its enforcement of its sex-specific dress code cannot constitute impermissible sex stereotyping under Title VII.  The court rejected this argument, opining that “[t]his evolving area of the law – how to reconcile this previous line of authority regarding sex-specific dress/grooming codes with the more recent sex/gender-stereotyping theory of sex discrimination under Title VII – has not been addressed by the Sixth Circuit.”  Id. at 25-26.

On the heels of the Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), the Funeral Home also argued that the RFRA prohibited the EEOC from applying Title VII to force the Funeral Home to violate its sincerely held religious beliefs.  Id. at 26.  The RFRA prohibits the “‘Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability’ unless the Government ‘demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.’”  Id. at 27 (quoting 42 U.S.C. §§ 2000bb–1(a), (b)).  The EEOC conceded that the Funeral Home’s religious beliefs were sincerely held.  Id.  Accordingly, citing Rost’s testimony that permitting employees to dress inconsistent with their biological sex would violate his religion and pressure him to relinquish his business, the court found that “the Funeral Home met its initial burden of showing that enforcement of Title VII, and the body of sex-stereotyping case law that has developed under it, would impose a substantial burden on the ability of the Funeral Home to conduct business in accordance with its sincerely-held religious beliefs.”  Id. at 32.

After finding that the Funeral Home demonstrated that enforcement of Title VII would be a substantial burden to its religious exercise, the EEOC then needed to meet its two-part test: (1) application of the burden is in furtherance of a compelling government interest; and (2) is the least restrictive means of furthering that compelling government interest.  The court assumed without deciding that the EEOC met its first burden, therefore proceeded to analyze the least restrictive means burden.  Id. at 36.  Quoting Hobby Lobby, the court noted that the “least-restrictive means standard is exceptionally demanding.”  134 S. Ct. at 2780.

Rejecting the EEOC’s conclusory argument that Title VII is narrowly tailored, the court noted that the EEOC did not provide “a focused ‘to the person’ analysis of how the burden on the Funeral Home’s religious exercise is the least restrictive means of clothing gender stereotypes at the Funeral Home under the facts and circumstances presented here.”  Id. at 38.  Further, noting the EEOC had been proceeding as if gender identity or transgender status was protected under Title VII, the court opined that the EEOC appeared to have taken the position that the only acceptable solution would be for the Funeral Home to allow the claimant to wear a skirt while working as a funeral director.  Id. at 39.

Finding that the EEOC failed to offer or even explore any solutions that could have worked under the facts of this case, the court rejected the EEOC’s approach and questioned “[i]f the EEOC truly has a compelling governmental interest in ensuring that [the claimant] is not subject to gender stereotypes in the workplace in terms of required clothing at the Funeral Home, couldn’t the EEOC propose a gender-neutral dress code (dark-colored suit, consisting of a matching business jacket and pants, but without a neck tie) as a reasonable accommodation that would be a less restrictive means of furthering that goal under the facts presented here?”  Id. at 38-41.  Accordingly, the court held that the EEOC did not meet its demanding burden, thus entitling the Funeral Home to RFRA exemption from Title VII.

As to the second claim, the EEOC alleged that the Funeral Home violated Title VII by providing a clothing allowance and/or work clothes to male employees but failing to provide such assistance to female employees.  Id. at 45.  Relying on EEOC v. Bailey, 563 F.2d 439 (6th Cir. 1977), the Funeral Home argued that the EEOC may include in a Title VII suit only claims that fall within an “investigation reasonably expected to grow out of the charge of discrimination.”  Id. at 45-46.  Applying Bailey, the court concluded that the EEOC investigation here uncovered possible unlawful discrimination (1) of a kind not raised by the claimant; and (2) not affecting the claimant.  Id. at 54-55.  Thus, the court instructed that the proper procedure would be the filing of a charge by a member of the EEOC and for a full EEOC investigation of that new claim of discrimination.  Accordingly, the court dismissed the EEOC’s clothing allowance claim without prejudice.  Id. at 56.

Implications For Employers

With an increasingly diverse workforce employing more transgender employees, employers would be wise to adopt an inclusive mentality in order allow their business to nurture a broader range of perspectives while also protecting against potential discrimination liability.  As this was a favorable ruling for the employer, businesses with sincerely held religious beliefs can use this as a template to seek protection under RFRA exemptions when defending against various discrimination claims, including those brought on behalf of transgender employees.  Until Title VII eventually incorporates transgender discrimination, the EEOC will continue to bring sex discrimination claims on behalf of transgender employees, but will use this opinion to remedy flaws in their strategy, for instance, in their approach to the least restrictive means test for gender-based dress code policies.

Instead of taking a reactionary approach and waiting for Title VII to evolve or for the EEOC to remedy their case theories, employers should be proactive in revising their policies to be gender-neutral when possible and contemplative of any employment requirement that might affect transgender employees.  As both employees and laws change, employers should follow suit now before having to pay to defend one later.

Our loyal blog readers can also find this post on our Workplace Class Action Blog here.

maryland state flagBy Gerald L. Maatman Jr. and Alex W. Karasik

Seyfarth Synopsis: Court granted EEOC’s partial motion for summary judgment on issue of pre-suit conciliation, finding that a declaration submitted by an EEOC official was sufficient evidence to show that the EEOC satisfied this obligation under Title VII.

In EEOC v. Dimensions Healthcare System, No. 15-2342 (D. Md. May 27, 2016), the Commission alleged that the defendant employer, Dimensions Healthcare System (“Dimensions”), unlawfully discriminated against one of its former employees on the basis of sex after it allegedly passed her over for a promotion due to her maternity leave. The EEOC filed two motions relative to the employer’s affirmative defense based on the Commission’s alleged failure to conciliate, including: (1) for partial summary judgment on the issue of pre-suit conciliation and (2) a motion to strike portions of Dimensions’ response in opposition to the EEOC’s summary judgment motion. On May 27, 2016, Judge Hazel of the U.S. District Court for the District of Maryland granted both of the EEOC’s motions.

The ruling, which heavily relied on the U.S. Supreme Court’s Mach Mining v. EEOC decision from 2015, held that a declaration submitted by an EEOC official was sufficient evidence that the government satisfied its Title VII pre-suit conciliation obligations. For employers seeking to challenge whether the EEOC met its Title VII pre-suit obligations, this ruling is instructive regarding the very low burden of proof the government needs to block the defense.

Case Background

The complainant was employed as a “Team Lead” by Dimensions, where she oversaw and managed several team members and performed various human resources tasks. Id. at 2. The complainant took maternity leave between January and April of 2014. On or around October 2014, she learned that Dimensions had promoted a less-experienced male employee, who was her subordinate, to a manager position. After learning of the promotion, the complainant met with a Dimensions executive. The executive told the complainant that while she was considered for the position, the male employee was selected instead because the complainant had been “on maternity leave for a while.” Id. Shortly thereafter, the complainant resigned and filed a charge of discrimination with the EEOC.

On May 11, the EEOC issued a reasonable cause determination to Dimensions. Id. at 2-3. According to the EEOC, the parties “engaged in communications” between May 11, 2015 and July 7, 2015 to provide Dimensions an opportunity to “remedy the discrimination practices described.” Id. at 3. Thereafter declaring the “communications” unsuccessful, the EEOC filed a lawsuit against Dimensions on August 10, 2015. In its answer to the complaint, Dimensions asserted the affirmative defense that the EEOC’s claims were barred to the extent it failed to properly conciliate, but later withdrew this defense.

While discovery was ongoing, the EEOC moved for partial summary judgement, arguing that Dimensions refused to stipulate that the EEOC fulfilled its pre-suit obligations. Id. at 4. Dimensions argued that there was a genuine dispute of material fact as to whether the EEOC failed to conciliate prior to filing its lawsuit. The EEOC moved to strike the specific allegations contained within Dimensions’ argument regarding the conciliation process. The Court granted the EEOC’s motion for partial summary judgment and its motion to strike.

The Decision

The Court began its analysis by discussing the U.S. Supreme Court’s decision in Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (2015), which examined whether and to what extent a federal district court can review the EEOC’s conciliation efforts. Id. at 5. Quoting Mach Mining, the Court noted that “[a] sworn affidavit from the EEOC stating that it has performed the [pre-suit] obligations . . . but that its efforts have failed will usually suffice.” Id. at 7. Further, the Court noted that “this ‘relatively barebones’ review is all that a court is permitted to inquire into when considering a failure-to-conciliate defense.” Id. Finally, discussing Mach Mining’s holding that the district court in that case erred by not striking from the record descriptions of the conciliation process, the Court opined that “[c]onfidentiality in the conciliation process is necessary.” Id.

Applied here, the Court noted that in support of its motion for partial summary judgment, the EEOC submitted the declaration of the Director of the Baltimore Field Office of the EEOC. Id. at 8. The declaration stated that after the EEOC determined there was reasonable cause to believe that Dimensions failed to promote the complainant because of her sex, it sent a letter of determination to Dimensions, and invited the employer to informally resolve the claim. Id. Further, the declaration explained that the EEOC “engaged in communications” with Dimensions and subsequently determined that further conciliation efforts would be unproductive. Id. at 8-9.

Granting the EEOC’s motion for partial summary judgment, the Court found that “[t]his evidence is sufficient for the EEOC to satisfy its burden to establish that it ‘endeavor[ed] to eliminate [the] alleged unlawful employment practice by informal methods’ prior to filing suit.” Id. at 9. Further, the “declaration establishes that the EEOC ‘tr[ied] to engage the employer in some form of discussion’ prior to filing suit.” Id. In opposition, Dimensions argued that the EEOC did not try in earnest to reach a resolution prior to litigating the case. Rejecting this argument, the Court held that “[t]hose details . . . are not only irrelevant to the scope of this Court’s review under Mach Mining, but also violate the confidentiality provision of Title VII.” Id. Accordingly, the Court granted the EEOC’s motion to strike the portions of Dimensions’ briefing regarding what was “said or done” during the conciliation process. Id.

Implications For Employers

This ruling is a very-pro Commission interpretation of the Mach Mining decision. It holds that merely mailing a demand letter and stating a settlement demand is enough. The practical realities of negotiation and give-and-take in the conciliation process are ignored. In this respect, it parts company with previous rulings on the Mach Mining issue that view the give-and-take of conciliation in a practical manner [see here].

As a result, this ruling gives employers an idea of how the EEOC will respond to challenges regarding whether it satisfied its Title VII pre-suit obligations: by submitting a declaration from one of its employees as to the mailing the determination, stating a settlement demand, and unilaterally deciding that further conciliation discussions are fruitless.

More importantly, this case illustrates how courts will likely find the EEOC’s declarations to be “sufficient evidence.” Id. Given that the EEOC only needs to submit a declaration to prove it satisfied its Title VII pre-suit obligations, employers can likely expect such conciliations to be far from fruitful if courts will now merely take the government at its word. Accordingly, employers engaged in future EEOC litigation likely have one less defense in their arsenal as a result of the Mach Mining decision.

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

wiflagBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: Court denied employer’s motion for summary judgment in EEOC race and/or national origin discrimination case involving the termination of non-English speaking employees.

In EEOC v. Wisconsin Plastics, Inc., No. 14-C-663 (E.D. Wis. May 5, 2016), the EEOC brought an action alleging discrimination in the workplace based on race and/or national origin after Wisconsin Plastics, Inc. (“WPI”) laid off a number of non-English speaking Hmong and Hispanics employees.  WPI moved for summary judgment, arguing that neither the EEOC nor the individually aggrieved intervening Plaintiffs provided any evidence of prohibited discrimination.  Judge Griesbach of the U.S. District Court for the Eastern District of Wisconsin denied WPI’s motion, finding that the mass termination of mostly non-English speaking employees, coupled with the subsequent hiring of primarily English-speaking Caucasian employees, precluded the employer from obtaining summary judgment.

For employers considering terminating non-English speaking employees, this ruling illustrates that even where there is no direct evidence of discrimination, courts will consider other contextual factors when assessing potential illegal discrimination claims.

Case Background

Between October 2012 and January 2013, WPI laid off 38 of its 114 production operators.  Of the 114 production operators working for WPI as of September 2012, some 85, or about 75%, were of Asian descent and 6 (5%) were Hispanic.  Twenty-eight of the fired employees, or about 74%, were of Asian descent, and 3 of them (8%) were Hispanic.  The EEOC subsequently brought an action alleging discrimination in the workplace based on race and/or national origin.  Thereafter, the aggrieved individuals were granted permission to intervene in the Commission’s lawsuit.  Id. at 1.

WPI initially conceded the prima facie factors required to show a case of illegal discrimination, including (1) the employees were members of a protected class (Hispanic or Hmong); (2) the employees were terminated; and (3) the employees were living up to the employer’s expectations.  Specifically, WPI also conceded that the job of production operator may be performed adequately by people who do not speak or read English.  WPI asserted that its legitimate reason for selecting these individuals for termination, i.e., their inability to speak English, was the “but for” cause of their termination.  Id. at 3.  Despite conceding that English was not required to perform the job, WPI viewed the inability to speak English as a negative factor and used that factor to dictate the termination decision. Thus, WPI moved for summary judgement, among other motions.

The Court’s Decision

The Court denied WPI’s motion for summary judgement.  Initially, the Court discussed how “[i]n some cases the lack of English language proficiency might not be a legitimate, non-discriminatory reason for termination, but that is essentially a question of fact that will turn on the particular circumstances of every case.”  Id.  Further, the Court opined that all things being equal, an employee who speaks fluent English is more valuable than one who does not because that employee has the potential to provide added value to the corporation in other capacities such as productivity and morale.  In other words, although the specific job at issue might not have required English proficiency, an employer’s preference for such a proficiency could be a legitimate consideration.  Nonetheless, Judge Griesbach noted this “does not mean a court can conclude, as a matter of law, that the ability to speak English is necessarily a legitimate, non-discriminatory reason” to terminate an employee.  Id.

While WPI cited English speaking as its legitimate, non-discriminatory reason for the terminations, the Court found that WPI did not provide a substantial justification for that reason, which was not surprising given WPI’s concession that English was not required to perform the job adequately.  Id. at 3-4.  WPI argued that because an inability to speak English was not the legal analog to race or national origin, the EEOC’s case must be dismissed.  The Court rejected this argument, noting that while it is “true that language ability per se is not the legal equivalent to a protected class like race or national origin, language can sometimes serve as a proxy, or stalking horse, for discrimination against a protected class.”  Id. at 5.

The Court further noted that “[o]n top of the unusual fact that the employer’s stated reason is conceded to be irrelevant to the employees’ job performance, the Plaintiffs point to the fact that during the same period the employer was hiring people — 88 people, of whom 62 were Caucasian.”  Id.  The Court found that the net effect of the firings and hiring resulted in a flip of the ethnic profile of the workplace, where Asians, who had been a significant majority of the assembly workforce, now constituted only a plurality.  Accordingly, the Court held that “[a] reasonable jury, faced with this evidence, might draw the conclusion that the company was reconstituting itself by race or national origin — particularly if that jury heard that language ability (WPI’s stated reason) did not affect job performance.”  Id.

Further, the Court took issue with WPI providing different reasons for the terminations at various times.  Id. at 6.  Early on, WPI suggested that employee performance was the problem, citing flunked performance improvement plans.  Later, WPI told the EEOC that the firings were done for economic reasons, despite the fact that WPI hired a substantial number of new assemblers during the same period, which happened to be its best sales years.  Finally, many WPI witnesses denied that language was a factor in the terminations, but during litigation, WPI seized on language as the reason for all of the terminations.

Finally, the intervening Plaintiffs argued that the WPI’s admissions were tantamount to direct evidence of discrimination, since language is closely linked to national origin.  Id. at 8.  WPI argued that Plaintiffs did not identify any memo, document, or oral testimony that suggested the reason for the firings was discriminatory on the basis of race or national origin.  Id. at 6.  While the Court noted the truth in WPI’s assertion, it nonetheless opined “[s]eldom is there a ‘gotcha’ moment (at least in cases that get this far) where an employer admits that race (for example) was the true reason for the termination.  Human resources staff are savvy enough to avoid putting things like that in writing, and so the mere fact that there isn’t direct (or even circumstantial) evidence of discrimination is merely to say that this is a case, like most, that relies on the indirect method established in McDonnell Douglass.”  Id.  Accordingly, the Court denied WPI’s motion for summary judgment.  Id. at 9.

Implications For Employers

While this ruling does not necessarily preclude employers from preferring English speaking employees, it does illustrate how courts will look at other factual circumstances when assessing whether terminations of non-English speaking employees could have amounted to discrimination.  Employers considering terminating such employees must be cognizant that other factors, such as the national origin and/or race of employees hired after the terminations, will be considered.  Accordingly, employers should exercise caution and thoroughly evaluate surrounding circumstances when considering a large scale termination of non-English speaking employees.

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