EMPLOYMENT LAW
2014
Andrew Kopon Jr.
Rachel E. Yarch
Christie Bolsen
Jaclyn A. Bacallao
Kopon Airdo, LLC
233 South Wacker Drive, Suite 4450
Chicago, Illinois 60606
p 312.506.4450
f 312.506.4460
KoponAirdo.Com
© Kopon Airdo, LLC
TABLE OF CONTENTS
RECENT LEGISLATIVE AND JUDICIAL DEVELOPMENTS
IN EMPLOYMENT LAW
United States Supreme Court Employment Law Decisions During 2013 ........................ 12-15
Causation under Title VII .................................................................................................12
Definition of a Supervisor..................................................................................................12
Equitable Relief Pursuant to ERISA ..................................................................................12
Mootness of FLSA Section 216(b) ....................................................................................13
Authority of Arbitrators .....................................................................................................13
Defense of Marriage Act ....................................................................................................14
Statute of Limitations for ERISA ......................................................................................14
Employment Issues Currently Pending Before the U.S. Supreme Court ......................... 15-16
Providing Contraceptives for Employees ..........................................................................15
Compensating Employees for Changing Clothing ...................................................... 15-16
Union Organization............................................................................................................16
Legislative Developments During 2013 ................................................................................ 16-19
NLRB Posting Requirement ........................................................................................ 16-17
Flexibility for Working Families Act ................................................................................17
Cooperative and Small Employer Charity Pension Flexibility Act ...................................17
Minimum Wage Fairness Act ............................................................................................17
Sexual Orientation as a Protected Class.............................................................................17
Illinois Conceal and Carry .................................................................................................18
Illinois Medical Marijuana.................................................................................................18
Illinois Restrictive Covenants ...................................................................................... 18-19
EMPLOYMENT LAW STATUTES
I. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964.................................................... 21-84
Who is an “Employer”? .....................................................................................................21
Who is an “Employee”? .....................................................................................................22
When Can a Timely Title VII Claim Be Filed? .................................................................23
The Employer-Employee Relationship ..............................................................................24
Who May Sue Under Title VII?.........................................................................................25
Prohibited Conduct Under Title VII ..................................................................................25
Examples of Unlawful Conduct ....................................................................................27
Limitations on Voiding Policies to Avoid Liability ..........................................................30
Employer’s Use of Information Attained Subsequent to the Discriminatory Act .............30
Burdens of Proof ................................................................................................................31
Direct Method of Proof .................................................................................................31
McDonnell Douglas Burden-Shifting Analysis ............................................................31
Mixed-Motive Analysis ................................................................................................34
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Use of Comparators ......................................................................................................35
Cat’s Paw Analysis .......................................................................................................35
Sexual Harassment .............................................................................................................36
Hostile Work Environment ...........................................................................................36
Quid Pro Quo Harassment ............................................................................................38
Same-Sex Harassment .......................................................................................................39
Other Forms of Harassment ...............................................................................................40
Sex Stereotyping ................................................................................................................40
Employer Liability Harassment by Supervisors ................................................................42
Affirmative Defenses .........................................................................................................44
Harassment by a Non-Supervisor ......................................................................................48
Sex Discrimination and the Pregnancy Discrimination Act ..............................................49
Maternity Leave ............................................................................................................50
Disability Benefits ........................................................................................................51
Paternity Leave .............................................................................................................51
Marital Status ................................................................................................................52
Abortion ........................................................................................................................53
Fringe Benefits ..............................................................................................................53
Breastfeeding ................................................................................................................54
Preemption ....................................................................................................................54
Affirmative Action .............................................................................................................54
Religious Discrimination ...................................................................................................56
Coverage .......................................................................................................................56
Definition of “Religion” ...............................................................................................57
Sincerely Held Beliefs ..................................................................................................57
Employer Inquiries into Religious Nature or Sincerity of Belief .................................57
Reasonable Accommodations .......................................................................................57
Notice of Conflict .........................................................................................................58
What is a “Reasonable” Accommodation? ...................................................................59
Undue Hardships...........................................................................................................61
Exemptions for Religious Organizations ...........................................................................62
Scope of Exemption ......................................................................................................63
Qualifying as a Religious Organization ........................................................................67
For-Profit Activities of Religious Organizations ..........................................................68
Exemption for Educational Entities ..............................................................................68
Ministerial Exemption ..................................................................................................69
The Bona Fide Occupation Qualification Exemption...................................................72
Associational Discrimination .............................................................................................73
Retaliation ..........................................................................................................................73
Proving a Retaliation Claim ..........................................................................................76
Retaliation Claims Not Dependent On the Underlying Claim......................................77
Associational Retaliation ...................................................................................................78
The Equal Employment Opportunity Commission and Title VII......................................78
Damages.............................................................................................................................80
Required Notices, Records and Documentation ................................................................83
EEO Reporting Requirements............................................................................................83
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II. THE AMERICANS WITH DISABILITIES ACT ........................................ 85-115
To Whom Does the ADA Apply? ......................................................................................86
Requirements of the ADA for Employers .........................................................................87
Definition of Disability Broadened....................................................................................88
Physical or Mental Impairment Requirements Amended ..................................................88
Loosening of “Substantial Limitation” Requirement ........................................................89
Major Life Activities Expanded.........................................................................................91
“Regarded As” Disabilities Clarified .................................................................................92
Qualifying Conditions Under the ADA .............................................................................93
Non-binding Examples of Impairments The EEOC Believes Should Consistently
Meet the Definition of Disability ...........................................................................93
Examples of Impairments Which Do Not Consistently Meet the Definition
of Disability ...........................................................................................................93
Specific Exclusions Under the ADA .................................................................................94
Qualified Individuals .........................................................................................................95
Reasonable Accommodations ............................................................................................96
Interactive Process Required.........................................................................................97
Requesting a Reasonable Accommodation.................................................................100
Requesting Documentation of Disability ....................................................................101
Accommodating “Regarded As” Disabilities .............................................................102
Undue Hardships..............................................................................................................102
Hostile Work Environment & Harassment Claims..........................................................103
Constructive Discharge ....................................................................................................105
Retaliation ........................................................................................................................106
Reverse Discrimination....................................................................................................106
Affirmative Defense – Direct Threat to Safety ................................................................106
Associational Discrimination ...........................................................................................106
Burdens of Proof ..............................................................................................................107
Effects of Social Security Total Disability Benefits Claim on an ADA Claim ...............108
Medical Examinations .....................................................................................................109
Pre-Employment Inquiries ...............................................................................................110
Last Chance Agreements .................................................................................................110
Enforcement and Damages ..............................................................................................111
EEOC Nuances Under the ADA ......................................................................................112
Recordkeeping Requirements .....................................................................................112
Medical Confirmation of an Employee’s Disability ...................................................112
After-Acquired Evidence of Employee Misconduct...................................................113
Practical Ramifications of the ADA Amendments Act ...................................................113
III. AGE DISCRIMINATION IN EMPLOYMENT ACT .......................................... 116-129
Definition of “Employer” ................................................................................................116
Definition of “Employee” ................................................................................................116
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Requirements of the ADEA .............................................................................................117
Examples of Prohibited Activities ...................................................................................117
Constructive Discharge ....................................................................................................118
Reverse Discrimination....................................................................................................118
Filing a Claim ..................................................................................................................118
Proving an ADEA Claim .................................................................................................120
Disparate Treatment v. Disparate Impact ...................................................................122
Permissible Actions by Employers .............................................................................123
Defenses ...........................................................................................................................124
Inconsistent Allegations and Social Security Benefits Claims ........................................126
Same Actor Inference ......................................................................................................126
Record Maintenance ........................................................................................................127
Releases of Liability ........................................................................................................127
Damages...........................................................................................................................128
IV.
OTHER FEDERAL STATUTES
Civil Rights Act of 1991 .......................................................................................... 130-136
Scope of the Civil Rights Act of 1991 .............................................................................130
Practical Impact on Section 1981 Claims ........................................................................130
Differences from Title VII ...............................................................................................131
Disparate Impact Cases ....................................................................................................132
Mixed Motive Cases ........................................................................................................133
Jury Trials ........................................................................................................................134
Arbitration ........................................................................................................................135
Damages...........................................................................................................................135
Equal Pay Act .......................................................................................................... 137-141
Pay Differentials ..............................................................................................................137
Prohibited Conduct Under the EPA .................................................................................138
Definition of “Wages” .....................................................................................................138
Definition of “Employer” ................................................................................................139
Stating a Claim.................................................................................................................139
Defenses ...........................................................................................................................140
The Equal Pay Act and Title VII .....................................................................................140
Salary Reviews.................................................................................................................141
Damages...........................................................................................................................141
Statute of Limitations.......................................................................................................141
State Statutes ....................................................................................................................141
Fair Labor Standards Act ......................................................................................... 142-171
Coverage Under the FLSA...............................................................................................142
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Who is an “Employee”? ...................................................................................................142
Independent Contractors .............................................................................................142
Volunteers ...................................................................................................................144
The Two Types of FLSA Coverage .................................................................................144
Individual Coverage Under the FLSA ........................................................................144
“Enterprise” Coverage Under the FLSA.....................................................................145
Exempt vs. Non-Exempt Employees ...............................................................................147
Salary Basis Requirement ...........................................................................................147
Fee Basis .....................................................................................................................148
“Actual Practice” Determination ................................................................................148
Safe Harbor .................................................................................................................148
Exceptions to the No-Docking Rule ...........................................................................149
Exemptions from the FLSA Minimum Wage and Overtime Pay Requirements.............149
White Collar Employee Exemptions ..........................................................................150
Family Business Exemption .......................................................................................157
Religious and Charitable Institutions Exemption ........................................................157
Ministerial Exemption ................................................................................................158
Law Enforcement and Fire Personnel Exemption ......................................................159
Companionship Services Exemption ..........................................................................160
Other Exemptions Under the FLSA.................................................................................161
FLSA Minimum Wage Requirements .............................................................................161
Compensation .............................................................................................................162
Deductions ..................................................................................................................162
Hours Worked .............................................................................................................163
FLSA Overtime Requirements ........................................................................................166
FLSA Child Labor Requirements ....................................................................................167
FLSA Recordkeeping Requirements ...............................................................................168
The FLSA & the Equal Pay Act ......................................................................................168
State and Local Government Employees .........................................................................169
Class Actions Under the FLSA ........................................................................................169
Enforcement .....................................................................................................................170
Statute of Limitations.......................................................................................................170
Arbitration Clauses ..........................................................................................................170
Damages...........................................................................................................................170
Penalties ...........................................................................................................................171
The Family and Medical Leave Act......................................................................... 172-198
2009 Changes to the FMLA.............................................................................................172
Definition of “Employer” ................................................................................................173
Serious Health Conditions ...............................................................................................175
Eligibility for Leave .........................................................................................................176
Taking Leave Pursuant to the FMLA ..............................................................................177
Calculating the Year for FMLA Purposes .......................................................................178
Paid or Unpaid Leave.......................................................................................................179
Employer Notice Requirements .......................................................................................180
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Employee Notice Requirements .....................................................................................181
Husband and Wife Employed by the Same Employer.....................................................183
Supporting Documentation ..............................................................................................183
Enforcement .....................................................................................................................185
Proving an FMLA Claim .................................................................................................186
Recordkeeping Requirements ..........................................................................................187
Returning After the Leave Period Expires .......................................................................188
Health Benefits During the Leave....................................................................................188
Damages...........................................................................................................................188
Releases of Liability ........................................................................................................189
Military-Related FMLA Leave ........................................................................................189
Qualifying Exigency Leave ........................................................................................190
Military Caregiver Leave ............................................................................................190
Changes to the Military Leave Entitlement ................................................................191
Taking Military-Related Leave ...................................................................................191
Military-Related Notice Requirements .......................................................................192
Documentation Required for Military-Related Leave ................................................192
Common FMLA Issues Arising in the Workplace ..........................................................193
Vague Healthcare Requirement Form ........................................................................193
Who Should Fill Out the Healthcare Provider Form? ................................................194
Suspicious Intermittent Leave Patterns.......................................................................194
Other Employment While On FMLA Leave ..............................................................195
Terminating an Employee on FMLA Leave ...............................................................195
Special Considerations for Schools .................................................................................196
Additional Clarifications Related to the FMLA ..............................................................197
The Fair Credit Reporting Act ................................................................................. 199-201
Who is Protected By the FCRA? .....................................................................................199
What is a Consumer Report? ...........................................................................................199
Key Provisions of the FCRA ...........................................................................................200
Written Notice and Authorization...............................................................................200
Adverse Action Procedures.........................................................................................200
Certifications to Consumer Reporting Agencies ........................................................200
Investigations Exempt from the FCRA............................................................................200
The Electronic Communications Privacy Act.......................................................... 202-206
Exceptions to Employers’ Interception of Communications ...........................................203
Consent .......................................................................................................................203
Ordinary Course of Business: “Extension Telephone Exemption” ...........................204
Intercepting Live Conversations ......................................................................................205
Penalties and Damages ....................................................................................................206
Statute of Limitations.......................................................................................................206
State “Wiretap” Statutes ..................................................................................................206
Tips for Employers ..........................................................................................................206
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The Volunteer Protection Act .................................................................................. 207-212
Protection Under the Volunteer Protection Act ...............................................................207
Definition of “Volunteer” ................................................................................................208
Definition of “Nonprofit Organization”...........................................................................208
Liability of Volunteers .....................................................................................................208
Volunteer Conduct Excluded from Immunity .................................................................209
Damages...........................................................................................................................209
Joint and Several Liability ...............................................................................................209
Preemption of State Volunteer Laws ...............................................................................210
Recommendations for Not-For-Profit Organizations ......................................................212
The Sarbanes-Oxley Act of 2002 ............................................................................. 213-216
Protection of Whistleblowers...........................................................................................213
Requirements of the Act ..................................................................................................213
Arbitration Agreements ...................................................................................................214
Filing a Claim ..................................................................................................................214
Damages...........................................................................................................................215
Compliance Guidance ......................................................................................................216
III.
ARBITRATION AGREEMENTS ....................................................................... 217-224
General Principles ............................................................................................................217
The Federal Arbitration Act .............................................................................................217
Contracts Under the Federal Arbitration Act ...................................................................217
What Types of Arbitration Agreements are Unenforceable? ..........................................218
Arbitrator’s Decisions ......................................................................................................220
Appealing an Arbitrator’s Decision .................................................................................221
Effects of Arbitration Agreements on Class Actions .......................................................221
State Statutes ....................................................................................................................221
Suggestions for Drafting and Executing Arbitration Agreements ...................................223
IV. VARIOUS ILLINOIS STATUTES ........................................................................ 225-238
The Illinois Religious Freedom And Civil Union Act .....................................................225
The Illinois Employee Credit Privacy Act .......................................................................226
The Illinois Human Rights Act ........................................................................................227
The Victims’ Economic Security and Safety Act ............................................................229
Illinois Equal Pay Act ......................................................................................................232
Privacy in the Workplace Statutes ...................................................................................233
Personnel Record Review Act .........................................................................................234
Wage Payment and Collection Act ..................................................................................237
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PRACTICAL EMPLOYMENT CONSIDERATIONS
V.
PREVENTATIVE EMPLOYMENT MEASURES ............................................ 240-249
Job Postings .....................................................................................................................240
Pre-Employment Screening .............................................................................................240
Damages...........................................................................................................................241
Hiring ..............................................................................................................................241
Performance Reviews ......................................................................................................243
Disciplinary Action ..........................................................................................................244
Leave of Absence Policies ...............................................................................................246
Advancements or Promotions ..........................................................................................246
Layoffs and Terminations ................................................................................................247
References for Former Employees...................................................................................248
VI.
EMPLOYEE HANDBOOKS ................................................................................ 250-260
At-Will Employment .......................................................................................................250
Handbooks and Implied Contracts ...................................................................................251
“Acceptance” of the Handbook .......................................................................................255
Disclaimers ......................................................................................................................255
Modification of an Existing Employee Handbook ..........................................................257
Drafting an Employee Handbook ....................................................................................258
VII.
EMPLOYMENT LIABILITY INVESTIGATIONS .......................................... 261-273
Employer’s Duty to Investigate .......................................................................................262
How Should an Employer Plan an Investigation? ...........................................................263
Designating an Investigator ........................................................................................263
Planning a Reasonable and Effective Investigation ....................................................264
Confidentiality ............................................................................................................265
Conducting an Investigation ............................................................................................265
Fact-Finding ................................................................................................................265
Documents to Procure .................................................................................................266
Interviewing Parties and Witnesses ............................................................................267
Interviewing Techniques.............................................................................................267
Credibility ...................................................................................................................270
Concluding an Investigation: The Investigative File and Report ...................................270
Documentation ............................................................................................................270
Corrective Action ........................................................................................................272
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APPENDIX
VIII. EMPLOYMENT POLICIES AND FORMS ....................................................... 275-293
Sexual Harassment Policy For Educational Organizations .............................................275
Purpose of the Policy .......................................................................................................275
Statement of the Policy ....................................................................................................275
Definition of Sexual Harassment .....................................................................................275
Procedural Remedy ..........................................................................................................276
Filing a Complaint ...........................................................................................................276
Informal Resolution .........................................................................................................276
Investigation and Hearing ................................................................................................276
Anti-Harassment Policy ...................................................................................................278
General Prohibitions ........................................................................................................278
Specific Sexual Harassment Prohibitions ........................................................................278
Employee’s Rights and Responsibilities..........................................................................278
Complaint Investigations .................................................................................................279
Managers’ Responsibilities ..............................................................................................279
Violations of Policy .........................................................................................................279
Sample Employee Acknowledgement Form ...................................................................280
Illinois Department of Human Rights Questionnaire .............................................. 281-282
Sample Application for Employees and Volunteers ................................................ 283-287
Sample Computer Usage and Social Media Policy ................................................. 288-293
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Recent Judicial And Legislative
Developments in Employment Law
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UNITED STATES SUPREME COURT
EMPLOYMENT LAW DECISIONS DURING 2013
Causation under Title VII of the Civil Rights Act
In University of Texas Southwestern Medical Center v. Nassar, a physician of Middle
Eastern descent brought a Title VII suit against a state university medical center. 133 S.Ct. 2517
(2013). The physician alleged that his constructive discharge from a university faculty position
was motivated by a superior’s harassment and that the university retaliated against him for
complaining of the alleged harassment. The issue before the Court was whether Title VII of the
Civil Rights Act required a plaintiff who alleged retaliation to prove that retaliation was the only
reason for a negative employment action.
The Court held that Title VII’s retaliation provision requires a plaintiff to prove that an
employer would not have taken negative employment action but for the improper motive.
Because no language in Title VII suggests otherwise, the Court reasoned that the legislature was
presumed to have intended that the standard understanding of causation to apply. And, the
standard understanding of causation requires a demonstrable link between the injury and the
alleged conduct. The Court also expressed concern that a lower threshold for causation would
result in an increase in frivolous claims, which would prevent employers and courts from
addressing harassment issues efficiently.
Definition of a Supervisor
In Vance v. Ball State University, an African–American employed by a state university
brought a Title VII action against her employer, in which she claimed that her work environment
was hostile and that she was retaliated against for complaining about racial harassment. 133 S.Ct.
2434 (2013). The Court was tasked with distinguishing between a coworker and supervisor
because an employer’s vicarious liability under Title VII depends on this difference. Thus, the
issue before the Court was whether an employee vested with the power to oversee the daily work
of a fellow employee should be considered a supervisor. The Court held that to be considered a
“supervisor” under Title VII, an individual must be “empowered by the employer to take tangible
employment actions against the victim.”
Equitable Relief Pursuant to ERISA
In U.S. Airways, INC. v. McCutchen, Respondent, James McCutchen, an employee of U.S.
Airways, was seriously injured in a car accident. 133 S.Ct. 1537 (2013). US Airways sponsored a
benefit plan that paid $66,866 to cover McCutchen’s medical expenses. The plan required
beneficiaries to repay any medical expenses recovered from third parties. McCutchen’s attorneys
secured a $110,000 award on his behalf, and McCutchen received $66,000 after deducting the
lawyers’ fees. The plan demanded reimbursement from McCutchen for his medical expenses, and
McCutchen argued that U.S. Airways failed to consider his legal fees, which reduced his net
award. Pursuant to the Employment Retirement Security Income Act (ERISA), U.S. Airways
filed suit for “appropriate equitable relief.”
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The district court ordered McCutchen to repay the full $66,866. The Third Circuit vacated
the lower court’s judgment and held that under ERISA, equitable limitations applied; therefore,
the equitable principle of unjust enrichment trumped the plan’s reimbursement clause. Moreover,
the Third Circuit reasoned that the award would constitute a windfall to U.S. Airways because
McCutchen would receive less than the full payment for his medical bills. The issue before the
Court was whether the Third Circuit was correct in holding that ERISA authorized courts to use
equitable principles in determining the appropriate remedy.
The Court vacated and remanded the Third Circuit’s opinion. The Court held that
equitable limitations did not apply to the benefit plan because it was a valid contract, and the
parties were bound by the terms for which they bargained. The common fund doctrine, on the
other hand, may provide relief because it does not address the specific allocation of attorney fees.
The common fund doctrine allows a litigant to recover attorney fees from a fund that is created,
increased, or protected by that litigant. And, because the parties did not contract otherwise, the
common fund doctrine may provide the best indication of the parties’ intent.
Mootness of FLSA Section 216(b) Collective Action
In Genesis HealthCare Corp. v. Symczyk, Laura Symczk (Symczk ) sued under the Fair
Labor Standards Act (FLSA) on behalf of herself and all others similarly situated in a section
216(b) collective action. 133 S.Ct. 1523 (2013). The defendants extended an offer of judgment
under Federal Rule of Civil Procedure 68 in full satisfaction of her alleged damages, fees, and
costs - prior to her moving for conditional certification and prior to other potential plaintiffs
opting in. The trial court dismissed the suit. The Third Circuit reversed, finding that the suit was
not moot under Article III. The Third Circuit adopted the “relation back” doctrine to the filing of
the complaint used in class certification cases (Rule 23), where a Rule 68 offer had been made;
and applied the doctrine to section 216(b) representative cases.
The issue before the Court was whether a case became moot, and thus beyond the judicial
power of Article III, when the lone plaintiff received an offer from the defendants to satisfy all of
the plaintiff's claims. The Court held that the suit was moot because the plaintiff had no personal
interest in the case after she did not accept her employer’s offer of judgment.
Authority of Arbitrator to Order Class Action Arbitration
In Oxford Health Plans v. Sutter, John Sutter (Sutter) entered into an agreement with
Oxford, a health insurance company, under which Sutter would provide primary care health
services to members of Oxford's managed care network in exchange for compensation. 133 S.Ct.
2064 (2013). When Sutter brought a class action suit in state court alleging delay and
underpayment, the court ordered arbitration. The arbitrator concluded that the following
arbitration clause expressed the parties’ intent to authorize class arbitration: “No civil action
concerning any dispute arising under this Agreement shall be instituted before any court, and all
such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the
Rules of the American Arbitration Association with one arbitrator.” A federal district court
confirmed the arbitrator's award. The Third Circuit affirmed.
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The issue before the Court was whether an arbitrator may determine that the parties agreed
to class arbitration based solely on the language in the contract, which required arbitration for any
dispute arising under the parties’ contract. In a unanimous decision, the Court held that the
arbitrator did not exceed his powers in interpreting the contract and determining that the parties
intended to authorize class-wide arbitration. The Court reasoned that when parties agree to
arbitration, the consequence is that the arbitrator may not interpret the contract correctly.
Moreover, pursuant to the Federal Arbitration Act, courts cannot overrule arbitrators so long as
they interpret the contract.
Constitutionality of The Defense of Marriage Act
In United States v. Windsor, Edith Windsor (Windsor) was lawfully married to her samesex partner who died and left her estate to Windsor. The Internal Revenue Service (IRS) refused
to recognize the marriage for purposes of allowing property to pass from a decedent to a surviving
same-sex spouse free of estate taxes. The IRS based its decision on the Defense of Marriage Act
(DOMA) Section 3, which defines the term “marriage” for all purposes under federal law as “only
a legal union between one man and one woman as husband and wife.” 1 U.S.C. 7. DOMA
similarly defines the term “spouse” as “a person of the opposite sex who is a husband or a wife.”
Id. A federal district court concluded that DOMA section 3 violates the equal protection guarantee
of the 5th amendment; the Second Circuit affirmed.
The issues before the Court were (1) whether Section 3 of DOMA violated the Fifth
Amendment’s guarantee of equal protection of the laws as applied to persons of the same sex who
are legally married under the laws of their State; (2) whether the Executive Branch’s agreement
with the court below that DOMA is unconstitutional deprived the Supreme Court of jurisdiction
to decide this case; and (3) whether the Bipartisan Legal Advisory Group of the United States
House of Representatives (BLAG) had Article III standing in this case.
The Court held that it had jurisdiction to hear the case because the judgment in question
ordered the U.S. Treasury issue a tax refund, and the Government stood to suffer an economic
injury. The BLAG argued that DOMA was constitutional, and that it reflected a controversy
under Article III. Because a controversy existed, the Court heard the case without needing to
determine whether BLAG had standing before the lower court.
The most significant holding in the case was that that states have the authority to define
marital relationships. The Court reasoned that DOMA went against historical and legislative by
undermining that authority. DOMA resulted in denying same-sex couples the rights that flow
from federal recognition of their marriages, and these rights are available to other couples with
legal marriages under state law. The Court held that the purpose and effect of DOMA is to impose
a “disadvantage, a separate status, and so a stigma” on same-sex couples in violation of the Fifth
Amendment’s guarantee of equal protection.
Statute of Limitations for ERISA
In Heimeshoff v. Hartford Life & Accident, Petitioner, a Wal-Mart employee, started
suffering from Irritable Bowel Syndrome, fibromyalgia, and lupus in January 2005. Petitioner’s
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condition deteriorated causing her to be unable to work, and she filed a claim for Long Term
Disability benefits in August 2005 with Hartford Life & Accident Insurance Co. (“Hartford”). By
December 2005, Petitioner’s doctor had failed to provide information regarding Petitioner’s
condition to Harford, and therefore, Hartford denied her claim in December 2005. In May 2006,
Petitioner sought the assistance of counsel to help her obtain benefits. Hartford denied Petitioner’s
claim again in November 2006 after finding that she was able to work. In November 2007,
Hartford made its final decision to deny Petitioner’s claim, and Petitioner appealed.
Petitioner sued Hartford alleging that the Company violated the ERISA when it denied her
claim. In reasoning that Petitioner’s claim was time barred, the district court determined that the
plan prohibited legal action after three years of proof of loss. Petitioner argued that the statute of
limitations should begin to accrue on the date that Hartford made its final decision to deny her
claim. The issue for the Court to determine was when the statute of limitations should being to
accrue for judicial review decision of an ERISA benefit determination. The Court held that absent
a controlling statute to the contrary, a participant and the plan may agree by contract to a
particular limitations period, even if that limitations period so as long as the period is reasonable.
EMPLOYMENT ISSUES CURRENTLY PENDING BEFORE THE
UNITED STATES SUPREME COURT
The 2013 Supreme Court has recently granted certiorari or heard oral argument in a
number of cases pertaining to employment law.
Providing Contraceptives for Employees of For-Profit Corporations
In Sebelius v. Hobby Lobby Stores, Inc., Hobby Lobby sought declaratory and injunctive
relief against Secretary of Health and Human Services under the Free Exercise Clause and
Religious Freedom Restoration Act (RFRA). Hobby Lobby alleged that under Health Resources
Services Administration guidelines promulgated pursuant to the Affordable Care Act,
corporations would be required to provide insurance coverage for drugs and devices that could
cause abortions.
The issue before the Court is whether RFRA, which provides that the government “shall
not substantially burden a person’s exercise of religion” unless that burden is the least restrictive
means to further a compelling governmental interest, allows a for-profit corporation to deny its
employees the health coverage for contraceptives to which the employees are otherwise entitled
by federal law, based on the religious objections of the corporation’s owners.
Compensating Employees for Changing Clothing
In Sandifer v. U.S. Steel Corporation, employees at the United Steel Corporation filed suit
as a class. The employees argued that the Fair Labor Standards Act required U.S. Steel
Corporation to compensate them for the time they spent changing in and out of work clothing and
transiting from locker rooms to work stations. The Fair Labor Standards Act specifically states
that an employer is not required to compensate employees for time expended “changing clothes.”
United States Steel Corporation filed a motion for summary judgment, and the motion was
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granted with respect to compensation for time spent changing clothes but not for transit time.
United Steel Corporation appealed, and the Seventh Circuit held that the company was not
required to compensate its employees for either time spent changing clothes or transiting. The
issue before the Court is whether changing into safety gear that is required by the job constitutes
“changing clothes” pursuant to the Fair Labor Standards Act.
Union Organizing In Unite Here Local 355 v. Mulhall, the owner of a casino and dog track, Mardi Gras
Gaming (Mardi Gras) entered into an agreement with Unite Here Local 355 (“UHL”). Pursuant to
the agreement, UHL paid for advertising that supported a gambling ballot initiative that Mardi
Gras wanted to get passed. In return, Mardi Gras was to provide UHL with employee information,
access to Mardi Gras’ premises, and neutrality toward unionization to facilitate union
organization at Mardi Gras. Moreover, UHL agreed not to protest, picket, strike, or put other
pressure on the company's business.
A Mardi Gras employee, Martin Mulhall (Mulhall), sued UHL and Mardi Gras. Mulhall
argued that the agreement violated the Labor Management Relations Act (LMRA). The LMRA
prohibits employers from giving and a union from receiving a “thing of value.” Mulhall’s suit was
dismissed in the district court for lack of standing. The district court reasoned that Mulhall was
not injured when UHL was only seeking to represent Mulhall. On appeal, the Eleventh Circuit
remanded and reversed. On remand, Mulhall’s suit was dismissed for failing to state a claim, and
the Eleventh Circuit reversed and remanded again. The issue before the Court is whether a union
and employer violate the LMRA when they enter into an agreement similar to that in this case and
under which the employer exercises its property rights by granting access to its premises to
employees and union representatives; its freedom of contract by entering into such an agreement;
and freedom of speech by remaining neutral during union organizing efforts.
RECENT LEGISLATIVE DEVELOPMENTS IN EMPLOYMENT LAW
There have also been several developments in federal employment legislation in the year
2013. Employers should be particularly aware of the following changes.
NLRB Posting Requirements
During 2011, the National Labor Relations Board (NLRB) issued a final rule requiring all
employers covered by the National Labor Relations Act (NLRA), to post a notice informing
employees of their rights under the NLRA. The rule would have required over six million
businesses covered by the NLRA to post 11-by-17 inch notices informing employees of their
rights under the NLRA to form unions and collectively bargain for better wages and working
conditions. The implementation of this rule was delayed on a couple of occasions.
On May 7, 2013 in National Association of Manufacturers v. NLRB, the D.C. Circuit
Court invalidated the NLRB’s rule and held that the rule violated an employer’s right to refrain
from speaking. 717 F.3d 947 (D.C. Cir. 2013). The Court determined that the rule violated 29
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U.S.C. § 158(c), which prohibits non-coercive regulation of speech pertaining to unionization. Id.
The Court reasoned that the rule violated the First Amendment because “the right to disseminate
another’s speech necessarily includes the right not to disseminate it.” Id. Thus, for now, there are
no such posting requirements imposed on employers.
Flexibility for Working Families Act
The Flexibility for Working Families Act would authorize employees to request temporary
or permanent changes in the terms or conditions of employment if the request relates to (1) the
hours the employee is required to work; (2) the times during which the employee is required to
work; (3) the location at which the employee is required to work; or (4) the notifications the
employee receives pertaining to work schedule assignments. The Act would also authorize
employees to file complaints with the Secretary of Labor for any violations these rights. Finally,
the Act provides for the investigation and assessment of civil penalties for violations. The
Flexibility for Working Families Act passed the House on May 8, 2013.
Cooperative and Small Employer Charity Pension Flexibility Act
The Cooperative and Small Employer Charity Pension Flexibility Act would amend
ERISA and the Internal Revenue Code to establish minimum funding standards for charity and
small employer (“CSEC”) pension plans and implement special rules for valuing plan assets. The
Act would permit the Secretary of Labor to extend the extend the amortization of any unfunded
liability of a CSEC pension plan for up to 10 years in certain circumstances The Act would also
allow CSEC plans to maintain an alternative minimum funding standards if they fund their plans
every year. Finally, the Act would also amend the notice requirements for CSEC plans.
Minimum Wage Fairness Act
The Minimum Wage Fairness Act, which was introduced in the Senate on November 19,
2013, amends the Fair Labor Standards Act of 1938 (FLSA) to increase the federal minimum
wage for employees to $8.20 per hour beginning six months after enactment. Thereafter, the
minimum wage will increase to $9.15 per hour one year after enactment and to $10.10 per hour
two years enactment. Three years after enactment, the Secretary of Labor will have the discretion
to increase the minimum wage annually based on increases in the Consumer Price Index.
Sexual Orientation as a Protected Class
The Employment Non-Discrimination Act (ENDA) passed the Senate on November 7,
2013. If the Senate bill were to become law, it would be unlawful for an employer to discriminate
against employees and job applicants based on their perceived or actual gender identity or sexual
orientation. ENDA would apply to employment agencies and labor unions but not to employers
with fifteen or fewer employers, the U.S. Armed Forces, or religious organizations that would
otherwise be exempt from the religious discrimination provisions of the Civil Rights Act of 1964.
While this would not impact the twenty-two states, including the District of Columbia, which
currently ban workplace discrimination based on sexual orientation, gender identity, or both, this
would be a major shift for the remainder of the country.
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In addition, there have been some significant development is Illinois law affecting
employers:
Illinois Conceal and Carry
On July 9, 2013, the Firearm Concealed Carry Act became law in Illinois. 430 ILCS 66.
This law requires an Illinois Concealed Carry License to carry a concealed firearm in Illinois and
became effective on January 1, 2014. Under this new law, there are certain prohibited areas
listed, including schools, medical facilities and nursing homes, among others. Additionally, the
owner of private real property may prohibit carrying concealed firearms by posting a sign
indicating firearms are prohibited on the property. Such signs must be clearly and conspicuously
posted at the entrance of the building or premises, and be of uniform design and as established by
the Department and shall be 4 inches by 6 inches in size. For employees prohibited from carrying
a concealed firearm at their workplace, they are permitted to carry a concealed firearm within a
vehicle to the parking area and may store the firearm or ammunition concealed in a case in a
locked vehicle or locked container out of plain view. They may also carry the concealed firearm
in the immediate area around their vehicles only to store or retrieve the firearm within the
vehicle’s trunk, as long as it is unloaded prior to exiting the vehicle.
Illinois Medical Marijuana
The Compassionate Use of Medical Cannabis Pilot Program Act, was signed on August 1,
2013, and went into effect January 1, 2014. Under this law, physicians may recommend the
therapeutic use of medical marijuana for certain qualifying medical conditions to patients who
have registered with the state Department of Public Health. Under the medical marijuana act,
employers are still permitted to: restrict or prohibit medical marijuana on its property; discipline
an employee who violates proper workplace drug policies; adopt reasonable rules about the use of
medical marijuana; and enforce drug-free policies if failing to do so would put the employer in
violation of federal laws or contracts. However, an employer cannot penalize employees for their
status as medical marijuana patients, unless it would put the employer in violation of federal laws,
or apply drug policies in a discriminatory manner.
Illinois Restrictive Covenants
A restrictive covenant, also called a noncompetition covenant, is a promise not to engage
in the same type of business for a stated time in the same market as an employer. Restrictive
covenants, such as nonsolicitation and noncompetition agreements in employment contracts, are
carefully scrutinized by Illinois courts when they have postemployment restrictions. This is
because they operate as partial restrictions on trade. Fifield v. Premier Dealer Services, Inc.,
2013 IL App 120327 (1st Dist. 2013). The Illinois Appellate Court recently held that before
making a reasonableness determination, the court must first decide: (1) whether the restrictive
covenant is ancillary to a valid contract; and (2) whether the restrictive covenant is supported by
adequate consideration. Id. at *13.
Regarding the second prong, adequate consideration, Illinois courts recognize that the
promise of continued employment may be an illusory benefit where employment is at-will. The
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restrictive covenant will not be enforced unless there is adequate consideration. Illinois courts
have held that continued employment for two or more years constitutes adequate consideration.
Id. at *14. Shorter lengths of employment have been held to be insufficient consideration to
support restrictive covenants, even if the employee resigned. Brown and Brown, Inc. v. Mudron,
379 Ill.App.3d 724 (3d Dist. 2008) (holding that seven months of employment was not sufficient
consideration to support a postemployment restrictive covenant).
The Fifield court held that the employment itself cannot be consideration. Even if an
employee signs the agreement before he or she is employed, the Fifield court rejected any
distinction between pre-hire or post-hire covenants. Illinois courts have repeatedly held that there
must be at least two or more years of continued employment to constitute sufficient consideration
to support a restrictive covenant, whether or not the employee resigns or is terminated.
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Employment Law Statutes
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TITLE VII of the Civil Rights Act of 1964
This year marks the 50th anniversary of the enactment of Title VII of the Civil Rights Act
of 1964 (“Title VII”). Title VII is a federal statute, which prohibits covered employers from
discriminating against employees based on or because of an employee’s race, color, religion, sex
or national origin.
Simply put, Title VII prohibits employers from using race, color, religion, sex or national
origin as a basis for taking any adverse action, including: (1) refusing to hire an individual; (2)
offering different compensation; (3) changing the terms, conditions, or privileges of employment;
(4) acting in any manner which deprives or may deprive an individual of employment or
adversely affects his/her status as an employee; or (5) discriminating in any manner.
Title VII also makes it illegal to retaliate against a person because the person complained
about discrimination, filed a charge of discrimination, or participated in an employment
discrimination investigation or lawsuit. Additionally, Title VII requires that employers reasonably
accommodate applicants’ and employees’ sincerely held religious practices, unless doing so
would impose an undue hardship on the operation of the employer’s business.
The Pregnancy Discrimination Act (“PDA”) amended Title VII to make it illegal to
discriminate against a woman because of pregnancy, childbirth, or a medical condition related to
pregnancy or childbirth. The PDA, which is not explicitly a part of Title VII, also makes it illegal
to retaliate against a person because the person complained about discrimination, filed a charge of
discrimination, or participated in an employment discrimination investigation or lawsuit
WHO IS AN “EMPLOYER”?
Title VII has broad application in that it applies to employers with 15 or more employees
and includes the actions of any agent of the employer. 42 U.S.C. §2000e(b). The Supreme Court
has interpreted this requirement so as to bring under the Act all employers who have on their
payroll 15 or more employees for any 20-week (or longer) period during the current or preceding
year. Walters v. Metro. Educ. Enter., 117 S. Ct. 660 (1997); Smith v. Castaways Family Diner,
453 F.3d 971, 974 (7th Cir. 2006). This means that a small employer need only have 15 people
(including part-time or flex-time workers) on the payroll to qualify, not 15 people actually present
and working each day for the required 20-week minimum period.
Even if an employer has fewer than 15 employees, it may still be covered under Title VII
if it is part of an affiliated group of corporations that has the minimum number of employees in
the aggregate. Papa v. Katy Industries, 166 F.3d 937 (7th Cir. 1999). In Papa, the Seventh
Circuit identified three situations in which an employer with fewer than 15 employees may be
subject to a Title VII suit: (1) where a parent company would be liable for its subsidiary
employer’s debts, torts, or contract breaches under the traditional standards for “piercing the
corporate veil”; (2) where an enterprise split itself into a number of small entities with the
intention of avoiding liability under the discrimination laws; and (3) where the parent company
directed the allegedly discriminatory act, practice or policy. See also Nesbit v. Gears Unlimited,
Inc., 347 F.3d 72 (3d Cir. 2003) (applying a modified version of the Papa test).
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The First Circuit Court of Appeals, as well as lower courts, has ruled that supervisors may
not be held individually liable for violations of Title VII. Fantini v. Salem State College, 557
F.3d 22 (1st Cir. 2009); Miranda v. Deloitte LLP, Civil No. 12–1271 (FAB), 2013 WL 5817650
(D. Puerto Rico October 10, 2013). Although Title VII’s definition of “employer” includes “any
agent” of an employer, the Court found that Congress did not intend to impose individual
liability; rather, Congress meant only “to import respondeat superior liability into Title VII.” In
so ruling, the Court joined ten other Circuits in holding that individuals may not be held liable
under Title VII. See Mormol v. Costco Wholesale Corp., 364 F.3d 54 (2nd Cir. 2004); Sheridan v.
E.I. DuPont de Nemours and Co., 100 F.3d 1061, 1077-1078 (3rd Cir. 1996); Lissau v. Southern
Food Service, Inc., 159 F.3d 177, 180 (4th Cir. 1998); Smith v. Amedisys, Inc., 298 F.3d 434, 448
(5th Cir. 2002); Wathen v. General Elec. Co., 115 F.3d 400, 405 (6th Cir. 1997); Williams v.
Banning, 72 F.3d 552, 555 (7th Cir. 1995); Powell v. Yellow Book USA, Inc., 445 F.3d 1074, 1079
(8th Cir.2006); Miller v. Maxwell's Intern. Inc., 991 F.2d 583, 587 (9th Cir. 1993); Haynes v.
Williams, 88 F.3d 898, 901 (10th Cir. 1996); Albra v. Advan, Inc., 490 F.3d 826, 830 (11th Cir.
2007).
Finally, the term “employer” does not include: (1) the United States; (2) a corporation
wholly owned by the United States; (3) an Indian tribe; (4) any department or agency of the
District of Columbia subject by statute to procedures of the competitive service; or (5) a bona fide
membership or club (other than a labor organization) that is exempt from taxation if it employs
fewer than twenty-five persons.
WHO IS AN “EMPLOYEE”?
Because Title VII applies only to employer-employee relationships, who constitutes an
“employee” for purposes of establishing a Title VII claim is a recurring question in employment
discrimination cases. Several courts have held that in order to establish an employer-employee
relationship, there must be financial compensation paid to the employee. Under these decisions,
interns or other unpaid working personnel are not “employees” who can state a claim under Title
VII. However, some federal courts have found volunteers to be “employees” if they receive
certain fringe benefits such as insurance, even if they do not receive a regular salary or wages.
One court held that union stewards, although a voluntary position elected by union
members, are employees of the union pursuant to Title VII. Daggitt v. United Food and
Commercial Workers Int’l Union, Local 304A, 245 F.3d 981 (8th Cir. 2001). Although local
union stewards served in elected volunteer positions, the court held the union was an employer
because the stewards received compensation from the union for withheld union dues in the form
of reimbursement, “lost time,” and additional contributions to a 401(k) program. This was
payment in exchange for services rendered, and the court considered it compensation, an essential
condition to the existence of an employer-employee relationship. But see Ferroni v. Teamsters,
Chauffers and Warehouseman Local 222, 297 F.3d 1146 (10th Cir. 2002) (holding evidence of
isolated reimbursement for lost time alone insufficient to establish an employer-employee
relationship).
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Finally, under Title VII, public officials and their staff members are not considered
“employees.”
WHEN CAN A TIMELY TITLE VII CLAIM BE FILED?
Before any plaintiff can file a Title VII action in court, he or she must exhaust all
administrative remedies available within the Equal Employment Opportunity Commission
(“EEOC”). A Plaintiff must file a charge of discrimination within 180 calendar days from the day
discrimination took place. The deadline is extended to 300 calendar days if a state or local agency
enforces a law that prohibits discrimination on the same basis. Once a plaintiff receives a Notice
of Right to Sue from the EEOC, he or she must file a lawsuit within 90 days.
The issue of when to begin calculating the 180 (or 300) day statute of limitations for filing
an EEOC Charge can be somewhat complicated. On January 22, 2009, President Obama signed
into law the Lilly Ledbetter Fair Pay Restoration Act of 2009 (“the Ledbetter Act”). The new law
rejects the U.S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct.
2162 (2007), which held that the charge-filing deadline for Title VII compensation discrimination
claims begins to run on the date of the first allegedly discriminatory pay decision.
The Ledbetter Act amends Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act of 1990, the Rehabilitation Act of 1973, and the Age Discrimination in
Employment Act of 1967 to provide that the period for filing a charge commences when:
(1) a discriminatory compensation decision or other practice is adopted;
(2) an individual becomes subject to the decision or practice; or
(3) an individual is affected by an application of a discriminatory compensation decision
or practice, “including each time wages, benefits, or other compensation is paid” as a
result of the decision or other practice.
Thus, the statute of limitations restarts each time an employee receives a paycheck based on a
discriminatory compensation decision.
The Ledbetter Act is retroactive to May 28, 2007, the day before the Ledbetter decision,
and applies to all pay discrimination claims pending on or after that date. Accordingly, employers
should be aware that individuals who had refrained from filing compensation discrimination
claims based on the Supreme Court’s Ledbetter decision may now come forward with their
complaints.
It is also important to note that the Ledbetter Acts provides that an unlawful employment
practice occurs when “a person” is affected by a discriminatory pay decision or other practice.
Therefore, pay discrimination charges filed by non-employees, such as the spouses of deceased
workers, may now be cognizable so long as those individuals claim they have been affected by
the discriminatory practice. It is unknown how the courts will interpret this broad language.
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Employers should also be aware that the statute of limitations can be extended in cases
involving allegedly discriminatory policies that have a disparate impact on a group of employees
in a protected class.
For example, as explained above, the U.S. Supreme Court recently held that a charge filed
more than 400 days after a group of black firefighter applicants were notified that they had failed
a test was timely because it was filed within 300 days of when the City began hiring applicants.
Lewis v. City of Chicago, 130 S.Ct. 2191 (2010). The Court explained that a plaintiff who does
not file a timely charge challenging the adoption of practice may assert a disparate impact claim
challenging the employer’s later application of that practice. The Court further held that “a
plaintiff establishes a prima facie disparate impact claim by showing that the employer ‘uses a
particular employment practice that causes a disparate impact’ on one of the prohibited bases.”
As such, employers should be particularly cautious to avoid implementing policies that have a
disparate impact on a protected class of employees.
THE EMPLOYER-EMPLOYEE RELATIONSHIP
The Seventh Circuit uses the economic reality test in determining whether the requisite
employer-employee relationship exists. Heinemeier v. Chemetco, 246 F.3d 1078 (7th Cir. 2001).
Under the economic reality test, the court considers the following factors: “(1) the extent of the
employer’s control and supervision over the worker, including directions on scheduling and
performance of work; (2) the kind of occupation and nature of skill required, including whether
skills are obtained in the workplace; (3) responsibility for the costs of operation, such as
equipment, supplies, fees, licenses, workplace, and maintenance operations; (4) method and form
of payment and benefits; and (5) length of job commitment and/or expectations.”
Generally, independent contractors are not protected by Title VII. Some courts, however,
have followed the “joint employer theory,” which considers any entity that exerts significant
control over the employee as an employer for purposes of Title VII. One court held that under the
joint employer theory, a company employing a (temporary) employee as a result of placement
services by a (temporary) employment agency was an employer under Title VII. Piano v.
Ameritech, 2003 WL 260337 (N.D. Ill. Feb. 5, 2003); Daniel v. Sargent & Lundy, LLC, 2012 WL
874419, at *6, (N.D. Ill. Mar. 14, 2012) (citing Piano).
In addition to the dilemma posed by independent contractors, courts have found it difficult
to distinguish between employers and highly placed workers for purposes of Title VII claims.
However, the Seventh Circuit has clarified that in order to properly determine who is an
“employee” versus an “employer,” the source of the individual’s authority must be considered. If
the authority is exercised by right, the individual is an employer. Smith v. Castaways Family
Diner, 453 F.3d 971 (7th Cir. 2006); Mariotti v. Mariotti Bldg. Products, Inc., 714 F.3d 761, 767
(3d Cir. 2013) (citing Smith).
In Smith, the individuals at issue were not deemed “employees” by the sole proprietor of
the restaurant they managed, even though they had the power to establish the business’s policies
and procedures, hire and fire other workers without approval, and share in the restaurant’s profits
and losses. The Seventh Circuit held that they were not “employees” because they exercised only
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delegated authority. Despite the great deal of authority they wielded, the workers could not
exercise rights comparable to those of a partner, owner, or director to govern the business.
According to the court, “‘Employers’ are those whose authority and interest are so aligned with
the business as to render them the legal personification of the business, i.e., principals rather than
agents.” Id., citing EEOC v. Sidley Austin Brown & Wood, 315 F.3d 696 (7th Cir. 2002).
WHO MAY SUE UNDER TITLE VII?
Title VII allows only employees “claiming to be aggrieved” to sue for discrimination. 42
U.S.C. §2000e-5(f). For example, a female employee had standing to bring a Title VII claim
against her employer for alleged emotional trauma she suffered as a result of the alleged sexual
harassment of a female co-worker. Leibovitz v. New York City Transit Authority, 252 F.3d 179 (2d
Cir. 2001). The court recognized that alleging a distinct palpable injury, although other women
working in the same environment may not have had the same claim, is sufficient to establish
standing to bring a Title VII claim.
The appellate courts, however, are split on the meaning of “persons claiming to be
aggrieved.” In particular, the courts are split on whether or not, for example, a male could raise a
Title VII cause of action where female co-workers were the targets of sexual discrimination by
the employer. These cases are often termed “indirect discrimination” or “associational
discrimination” cases, because the plaintiff is claiming to be somehow injured by the illegal
discrimination of a co-worker. (These cases do not include “reverse discrimination” cases, such
as where a male is claiming to be discriminated against in favor of a female.)
An illustrative case is Childress v. Richmond Virginia, 134 F.3d 1205 (4th Cir. 1998),
where white male plaintiffs were held not “persons aggrieved” under Title VII when they claimed
that the employer discriminated against African-American female co-workers. The court held
that to the extent that the white male plaintiffs attempted to assert the rights of third persons,
African-American females, the plaintiffs clearly stated no claim. The court noted that had the
employer directed the discrimination toward the plaintiffs, these plaintiffs would have an injury in
fact, thus making them “persons claiming to be aggrieved” and allowing them standing to sue
under Title VII.
Finally, the United States Supreme Court has held that former employees can bring a
claim under Title VII for retaliation if the former employer commits an act after the employment
relationship has ended that can be construed as retaliation, such as providing a negative reference.
Robinson v. Shell Oil Co., 519 U.S. 337 (1997); Szymanski v. County of Cook, 468 F.3d 1027 (7th Cir.
2006); Matthews v. Wisconsin Energy Corp. Inc., 534 F.3d 547, 559 (7th Cir. 2008) (citing
Szymanski).
PROHIBITED CONDUCT UNDER TITLE VII
Under Title VII, employers are prohibited from taking adverse employment actions, such
as failing or refusing to hire or discharge any individual, or making decisions with respect to
compensation, terms, conditions, or privileges of employment, because of race, color, religion,
sex, or national origin. In addition, Title VII prohibits employers from limiting, segregating, or
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classifying employees or applicants for employment in any way that would deprive any individual
of employment opportunities because of race, color, religion, sex, or national origin.
The issue of what constitutes an adverse employment action is not always straight
forward. For example, some employees might claim that trivial inconveniences, such as changes
in office location, constitute adverse employment actions. The Second Circuit released an
opinion regarding whether changes in an employee’s working conditions are adverse employment
actions under Title VII. Tehan v. Sacred Heart University, 388 Fed.Appx. 42 (2d Cir. 2010). The
Court held that absent evidence that the changes are more disruptive than a mere inconvenience or
alteration of job responsibilities, such claims should be dismissed at the summary judgment stage
of litigation. Thus, what constitutes an adverse employment action under Title VII should be more
than a mere inconvenience or alteration of job responsibilities.
Once an adverse employment action is established, Title VII plaintiffs are required to
show that such actions were either intentionally or unintentionally discriminatory. Title VII
prohibits both intentional and unintentional discrimination. Intentional discrimination (“disparate
treatment”) occurs where an illegal factor – such as race or sex – motivates the employer’s
decision. In contrast, unintentional discrimination (“disparate impact”) involves a situation where
an employer’s decision is not motivated by discriminatory animus. Rather, under a disparate
impact theory, an employer’s use of tests or other selection procedures disproportionately exclude
people of a particular group by race, sex, or another covered basis and are not job-related.
Therefore, among other acts and practices, an employer is prohibited from using any of
the stated categories as a basis for hiring, firing, disciplining, setting terms of compensation,
privileges, benefits or training. Many employment practices can be construed as Title VII
violations even if they are not perceived by the employer as being or intended to be
discriminatory. See Scheidemantle v. Slippery Rock University, 470 F.3d 535 (3d Cir. 2006)
(observing that Title VII is interpreted broadly and there is a “low bar” for establishing a prima
facie case of employment discrimination under the statute).
Additionally, as noted, Title VII prohibits employers from maintaining employment
policies that appear to be neutral on their face, but have a disparate impact on members of a
protected group. If an employment policy has a disparate impact upon members of a protected
group (for instance, a requirement that employees have a high school diploma without allowing a
GED to stand for the equivalent of a high school diploma), then even an innocent motive or good
intention on the part of the employer will not necessarily absolve it from liability.
For example, a fire department’s physical agility test was held to violate Title VII because
it had a disparate impact on females. Pietras v. Farmingville Fire District, 180 F.3d 468 (2d Cir.
1999). In determining whether a disparate impact existed, the court cited with approval the
EEOC’s “4-6 Rule”: If a test pass rate for women is less than 80% of the pass rate for men, it
constitutes a prima facie case of disparate impact under Title VII. In that case, the court found
the physical agility test failed the 4-6 Rule because the pass rate for volunteer firefighters was
57% for women and 95% for men.
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In a similar case, the Eighth Circuit held that a pre-employment strength test used at a
sausage-making plant discriminated against female job applicants. EEOC v. Dial Corp., 469 F.3d
735 (8th Cir. 2006). In this case, fewer than 40% of female applicants passed the test, while more
than 95% of male applicants passed. The court found that the test not only had a disparate impact
on women, but it was more difficult than the sausage-making jobs themselves and did not
correlate with safe and efficient job performance.
On the other hand, a casino’s policy of requiring female beverage servers to wear makeup,
but prohibiting male beverage servers from wearing makeup, does not constitute disparate
treatment under Title VII, because when an employer’s appearance policy does not unreasonably
burden one gender more than the other, that policy will not violate Title VII. Jespersen v.
Harrah’s Operating Co., 444 F3d. 1104 (9th Cir. 2006). Courts have generally upheld employers’
sex-differentiated appearance standards so long as the policy equally burdens both sexes with
different types of standards.
One court has stated that employers cannot avoid liability under Title VII for harassment
by co-worker employees by adopting a “see no evil, hear no evil” policy. Howard v. Winter, 446
F.3d 559, 567 (4th Cir. 2006); Ocheltree v. Scollon Productions, Inc., 335 F.3d 325 (4th Cir.
2003). An employer will incur liability even without knowledge of the harassment if it should
have known about the harassment and failed to take reasonable steps to prevent the conduct.
However, it has been held that an employer that promulgates a sexual harassment policy may
reasonably distinguish between sexually oriented conduct that elicits complaints from an offended
co-worker and arguably comparable conduct that is nonetheless tolerated by co-workers without
complaint. Yeager v. City Water and Light Plant of Jonesboro, 454 F.3d 932 (8th Cir. 2006).
Examples of Unlawful Conduct
Common forms of unlawful religious discrimination include:
•
Refusing to hire individuals of a certain religion, imposing stricter promotion
requirements for persons of a certain religion, and imposing more or different
work requirements on an employee because of that employee’s religious
beliefs or practices.
•
Religious slurs or hostility. Feingold v. New York, 366 F.3d 138 (2nd Cir.
2004).
•
Adverse employment actions based on religious views. Carey v. Marcicopa
County, 602 F.Supp.2d 1132 (D. Ariz. 2009).
•
Maintaining policies that restrict forms of religious expression, which do not
have a comparable effect on workplace efficiency and do not impose an undue
hardship on the employer, such as:
o Requiring employees to be clean shaven with short haircuts, Brown v. F.L.
Roberts & Co. Inc., 419 F.Supp.2d 7 (D. Mass 2006);
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o Requiring employees to sign written acknowledgments of diversity policies
that require employees to ascribe worth to behavior that conflicts with
religious beliefs, Buonanno v. AT&T Broadband, LLC, 313 F.Supp.2d 1069
(D.Colo. 2004); and
o Requiring employees to participate, or not participate, in a religious activity
as a condition of employment. However, Title VII provides exceptions to
this requirement in certain circumstances, which permit discrimination on
the basis of religion. These exceptions are discussed in the Exemptions for
Religious Organizations section below.
Generally, an employer may not place more restrictions on religious expression than on
other forms of expression that have a comparable effect on workplace efficiency. Therefore,
employers must permit employees to engage in religious expression, unless the religious
expression would impose an undue hardship on the employer.
Common forms of unlawful race/color discrimination include:
•
Discriminatory recruiting, hiring, and advancement practices, such as:
o Soliciting applications only from sources in which all or most potential
workers are of the same race or color;
o Requiring applicants to have a certain educational background that is not
important for job performance or business needs; or
o Testing applicants for knowledge, skills or abilities that are not important
for job performance or business needs.
•
Compensation and other employment terms, conditions, and privileges based on
race/color. Race or color discrimination may not be the basis for differences in
pay or benefits, work assignments, performance evaluations, training, discipline or
discharge, or any other area of employment.
•
Segregation and classification of employees based on race/color, such as:
o Physically isolating them from other employees or from customer contact;
o Delegating assignments according to race or color;
o Excluding members of one group from particular positions; or
o Grouping or categorizing employees or jobs so that certain jobs are
generally held by members of a certain protected group.
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Common forms of unlawful national origin discrimination include:
•
Accent discrimination, such as basing an employment decision on an employee’s
foreign accent, unless the accent materially interferes with job performance.
•
English fluency requirements, unless English fluency is required for the effective
performance of the position.
•
English-only rules, unless adopted for nondiscriminatory reasons such as when
necessary to promote the safe or efficient operation of the employer's business.
Common forms of unlawful sex discrimination include:
•
Recruiting, hiring, and advancing employees on the basis of sex.
•
Basing compensation and other employment terms, conditions, and privileges of
employment on sex.
•
Segregating and classifying employees on the basis of sex.
•
Harassing on the basis of sex, such as:
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Unwanted jokes, gestures, offensive words on clothing, and unwelcome
comments and banter.
•
Touching and any other bodily contact such as scratching or patting a
coworker's back, grabbing an employee around the waist, or interfering
with an employee's ability to move.
•
Repeated requests for dates that are turned down or unwanted flirting.
•
Transmitting or posting e-mails or pictures of a sexual or other harassmentrelated nature.
•
Displaying sexually suggestive objects, pictures, or posters.
•
Playing sexually suggestive music.
•
Implying that a subordinate employee must sleep with his or her supervisor
in order to keep a job or advance in one’s position.
•
Belittling an employee by using sexist or demeaning terms.
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LIMITATIONS ON VOIDING POLICIES TO AVOID LIABILITY
Employers attempting to avoid Title VII liability should be cautious about voiding certain
policies because the act of voiding policies, even in an attempt to prevent discrimination against
one class of employees may result in blatant discrimination against another class of employees.
Ricci v. DeStefano, 129 S. Ct. 2658 (2009); U.S. v. Brennan, 650 F.3d 65, 72 (2d Cir. 2011)
(citing Ricci). In Ricci, a group of white firefighters and one Hispanic firefighter sued the City of
New Haven, alleging that the City’s refusal to certify the results of a promotional examination
violated Title VII. The City claimed the voiding of the examination results was necessary to
avoid disparate-impact liability, as no black firefighters qualified for promotions. The Supreme
Court addressed the question of whether the City’s purpose – to avoid disparate-impact liability –
excuses what otherwise would have been prohibited disparate-treatment discrimination. The
Court found that the City had no strong basis in evidence that the tests were discriminatory
against black firefighters and, therefore, the City was in violation of Title VII when it voided the
exam results. Based on the holding in Ricci, employers are strongly encouraged to consult with
counsel before taking action with respect to any policies or rules that impact particular classes of
employees.
EMPLOYER’S USE OF INFORMATION ATTAINED SUBSEQUENT TO THE
DISCRIMINATORY ACT
If an employer performs a discriminatory act in violation of Title VII, it may still be held
liable even if after the act (i.e. termination, demotion, failure to hire, etc.) the employer discovers
information that would have justified the action. McKennon v. Nashville Banner Publ’g Co., 513
U.S. 352 (1995); Serrano v. Cintas Corp., 699 F.3d 884, 903 (6th Cir. 2012) (citing McKennon).
In McKennon, the court refused to allow an employer to use after-acquired evidence of
misconduct as its “legitimate, nondiscriminatory” reason for the plaintiff’s discharge. As the court
reasoned, “[t]he employer could not have been motivated by knowledge it did not have and it
cannot now claim that the employee was fired for the nondiscriminatory reason.” The Seventh
Circuit applied McKennon when it held that a plaintiff who alleged the defendant police
department discriminated against him on the basis of his race in failing to hire him could recover,
despite the fact that the plaintiff was not a qualified applicant for the position because he was over
the statutory hiring age. O’Neal v. City of New Albany, 293 F.3d 998 (7th Cir. 2002).
Employers should be aware that this standard is not applicable in the Family and Medical
Leave Act (“FMLA”) discrimination setting. Under an FMLA decision regarding after-acquired
evidence, the Seventh Circuit held that when an employer discovers information during an
employee’s FMLA leave that would otherwise form the basis of a valid termination, the law does
not act as a bar to adverse employment action. Cracco v. Vitran Express, 559 F.3d 625 (7th Cir.
2009); Pagel v. TIN, Inc., 695 F.3d 622, 629 (7th Cir. 2012) (citing Cracco). However, this
standard is unique to FMLA discrimination claims.
Nevertheless, if an employer discovers evidence of employee wrongdoing which would
have led to the employee’s discharge, then the employee’s right to back pay is limited to the
period before the discovery of this after-acquired evidence. Sheehan v. Donlen Corp., 173 F.3d
1039, 1047 (7th Cir. 1999); Lalowski v. Corinthian Schools, Inc., No. 10 C 1928, 2013 WL
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1788353, at *8 (N.D. Ill., April 26, 2013). This holding is particularly important for failure-to-hire
cases. In such a case, even if the employer is found liable for employment discrimination, the
applicant becomes unable to recover back pay if it is determined that the applicant lied on his or
her employment application. Under Sheehan, it is clear that after-acquired evidence in Title VII
cases cannot operate to bar all relief, but it can be used to limit back pay.
BURDENS OF PROOF
A Title VII complainant may prove discrimination in one of two ways: under the direct
method, by establishing that the employer acted with a discriminatory motivation; or under the
indirect method, by demonstrating a prima facie case and shifting the burden of proof as set forth
by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1981). Under either
route, the complainant must show that a discriminatory reason motivated the decision-maker. If
this is established, then the employer can defend on the grounds that it would have taken the same
action in the absence of discrimination. See Board of Education of the City of Chicago v. Cady,
369 Ill. App. 3d 486 (Ill. App. Ct. 2006) (noting that, although the employer’s career placement
office may have described a teaching position as being open to minorities only, the employer
presented the affirmative defense that it would not have hired the complainant even in the absence
of the alleged discrimination because he was not qualified for the teaching position).
Direct Method of Proof
A complainant proceeding under the direct method may offer either direct or
circumstantial evidence that the employer’s decision was motivated by an impermissible purpose,
such as race, gender, etc. Rudin v. Lincoln Land Community College, 420 F.3d 712 (7th Cir.
2005); Diadenko v. Folino, 890 F.Supp.2d 975, 988-89 (N.D. Ill. 2012) (citing Rudin). Direct
evidence of discrimination has been described as evidence that, if believed by the trier of fact,
would prove discrimination without reliance on inference or presumption. Rudin, 420 F.3d at
712. Alternatively, a complainant can present “a convincing mosaic” of circumstantial evidence
that would allow the trier of fact to infer intentional discrimination. Rhodes v. Illinois
Department of Transportation, 359 F.3d 498 (7th Cir. 2004).
McDonnell Douglas Burden-Shifting Analysis
Complainants rarely present direct evidence of discrimination. Instead, Title VII cases
often proceed under the indirect method of proof, which is also known as the McDonnell Douglas
burden-shifting analysis. See McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Under this
analysis, the plaintiff employee first bears the burden of presenting a prima facie case of
discrimination by the employer, which includes proving that: (1) he/she is a member of a
protected class; (2) he/she was meeting the employer’s legitimate expectations; (3) he/she
suffered an adverse employment action; and (4) other similarly situated employees who were not
members of the protected class were given more favorable treatment. Davis v. Con-Way
Transportation Central Express, Inc., 368 F.3d 776 (7th Cir. 2004); Haddad v. City Colleges of
Chicago, No. 10 CV 6528, 2012 WL 5363413, at *4 (N.D. Ill Oct. 30, 2012) (citing Davis).. The
establishment of a prima facie case creates a rebuttable presumption of discrimination.
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Federal circuits differ as to whether an employer’s “legitimate job expectations” for an
employee constitute a prima facie element of the McDonnell Douglas burden-shifting method of
proof, or whether it simply merges with the pretext inquiry. The majority of courts, however,
consider the employer’s evaluation of an employee after the prima facie stage. For example, in
Arnold v. Nursing and Rehab Ctr. at Good Shepherd, LLC, 471 F.3d 843 (8th Cir. 2006), the
Eighth Circuit held that the district court erred by requiring the plaintiff, as part of her prima
facie case, to show that she performed her job satisfactorily instead of merely requiring her to
show that she was qualified. According to the court, “[b]y requiring [the plaintiff] to prove that
she executed her duties satisfactorily, the district court raised the standard set by the Supreme
Court for what suffices to show qualification.” Thus, the fact that the plaintiff was a duly
licensed nurse and had acceptably performed for nearly a year before her discharge, was
sufficient to make out a prima facie case. But see Warch v. Ohio Casualty Insurance Co., 435
F.3d 510 (4th Cir. 2006) (allowing the issue of the employer’s evaluation of the employee’s job
performance to be presented at the prima facie stage).
A plaintiff must also establish the existence of an adverse employment action. While an
adverse employment action must be material and more than a mere inconvenience, it may take
many forms. Timmons v. General Motors Corp., 469 F.3d 1122 (7th Cir. 2006) (holding that
placing an employee on involuntary disability leave constituted an adverse employment action).
Adverse employment actions include, but are not limited to, termination of employment,
demotion evidenced by a decrease in wage or salary, a less-distinguished title, material loss of
benefits, significantly diminished material responsibilities, or other indications that might be
unique to a particular situation. Id.; but see Joseph v. Leavitt, 465 F.3d 87 (2d Cir. 2006)
(holding that application of the employer’s disciplinary policies to an employee, without more,
does not constitute an adverse employment action).
The Second Circuit Court of Appeals’ decision in Cunningham v. New York State Dep’t of
Labor, 326 Fed.Appx. 617 (2d Cir. 2009), underscores that minor workplace annoyances and
grievances do not support a discrimination case. In Cunningham, the plaintiff alleged that his
employer discriminated against him on the basis of his race by accusing him of “time abuse,”
reassigning him from a fifth-floor office to a first-floor office, opposing the hiring of his son for a
summer job, discontinuing a training conference organized by him, excluding him from a
“Welfare-to-Work” conference and a decision to hire an outside consultant. Although he
conceded that an adverse employment action typically involves “discharge, refusal to hire, refusal
to promote, demotion, reduction in pay, and reprimand,” the plaintiff argued that, when taken
together, his complaints constituted an adverse employment action, and thus he satisfied his prima
facie race discrimination case. The court disagreed and held that he failed to establish a prima
facie case of race discrimination, finding the plaintiff’s complaints involved only “everyday
workplace grievances, disappointments, and setbacks” not amounting to a “materially adverse
change in the terms or conditions of his employment.”
Once an employee proves a prima facie case of discrimination, the burden of proof shifts
to the employer to articulate a legitimate, nondiscriminatory purpose for the adverse employment
action. If the employer is capable of showing this, the burden then shifts back to the employee to
prove the employer’s legitimate, nondiscriminatory purpose was pretextual. Grube v. Lau
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Industries, Inc., 257 F.3d 723, 728 (7th Cir. 2001); Sommerfield v. City of Chicago, No. 08 C
3025, 2013 WL 4047606, at *17 (N.D. Ill. Aug. 9, 2013) (citing Grube).
Pretext for discrimination means “more than an unusual act; it means something worse
than a business error; pretext means deceit used to cover one’s tracks.” Thus, to establish an
employer’s pretext, the employee must offer proof that the employer’s stated reason was not the
true reason for its action. Forrester v. Rauland-Borg Corp., 453 F.3d 416 (7th Cir. 2006); Gilva
v. Piedmont Plastics, Inc., NO. 10-CV-818, 2012 WL 601863, at *9 (N.D. Ill Feb. 23, 2012)
(citing Forrester). An employee may prove pretext through circumstantial evidence, comparative
evidence, statistics, or direct evidence of discrimination. Gordon v. United Airlines, Inc., 246 F.3d
878 (7th Cir. 2002). For example, a plaintiff might establish pretext by demonstrating that an
employer: (1) failed to follow its own policies; (2) treated similarly situated employees in a
disparate manner; or (3) made substantial changes over time in its proffered reason for an
employment decision. Arnold v. Nursing and Rehab Ctr. at Good Shepherd, LLC, 471 F.3d 843
(8th Cir. 2006). It is not enough, however, to show that the decision was merely ill-considered or
foolish. Dyrek v. Garvey, 334 F.3d 590 (5th Cir. 2003).
Interestingly, the Sixth Circuit recently concluded that an employer’s silence following an
employee’s announcement of her pregnancy was evidence of pretext “because it can be read as
speculation regarding the impact of [the employee’s] pregnancy on her work…” The court further
noted that “an employer’s speculation or assumption about how an employee’s pregnancy will
interfere with her job can constitute evidence of discriminatory animus.” Asmo v. Keane, 471
F.3d 588 (6th Cir. 2006).
Even if an employee cannot show that she satisfied the employer’s legitimate
expectations, the employee may still prove a prima facie case of discrimination if she is capable
of establishing that the employer’s legitimate expectations were pretextual. Brummett v. Lee
Enterprises, Inc., 284 F.3d 742 (7th Cir. 2002); Haddad, 2012 WL 5363413, at *4 (citing
Brummett). However, if the employer’s policy is facially legitimate, a court of review will
consider the policy valid. In Brummett, the court held that the employer’s expectation of
employees possessing good driving records was facially legitimate and therefore not a pretext for
terminating the plaintiff.
An opinion from the First Circuit involved a failure-to-hire discrimination claim, where
the court held that the job applicant failed to show that the employer’s articulated
nondiscriminatory reasons for not hiring him, which included his lack of current knowledge or
experience, his status as a non-current employee, and the messy appearance of his application,
were a pretext for discrimination. Clifford v. Barnhart, 449 F.3d 276 (1st Cir. 2006). The court
found that the current knowledge and experience requirements were implicitly included in the
vacancy announcement, they were relevant to the applicant’s ability to perform the job, the
plaintiff lacked a technical ability comparable to that of the selected candidate, and the neat
appearance of an application could reflect the applicant’s substantive abilities. The court further
noted that the plaintiff conceded that the preference for hiring current employees was almost
always followed for the applied-for position. Thus, the plaintiff failed to show pretext with
respect to the employer’s proffered reasons for not hiring him.
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Similarly, the Seventh Circuit has opined that, in failure-to-hire cases, courts and
administrative bodies do not sit as super-personnel departments where disappointed applicants or
employees can have the merits of an employer’s decision replayed to determine best business
practices. Holmes v. Potter, 384 F.3d 356, 361-2 (7th Cir. 2004) (quoting Stewart v. Henderson,
207 F.3d 374, 378 (7th Cir. 2000)). Generally, asserting that a decision was mistaken or foolish is
insufficient to attempt to establish pretext. Instead, courts look to the truth of the employer’s
explanation.
Mixed-Motive Analysis
In “mixed-motive” cases (cases where it is shown that both legitimate and illegitimate
considerations motivated an employer’s conduct), the United States Supreme Court has held that
the employee may meet his/her burden by presenting circumstantial evidence of the employer’s
pretext. Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003); Claudio v. Mattituck, 2013 WL
3820671, at *8 (E.D.NY July 24, 2013) (citing Desert Palace). The Court found that if the
employee presents some evidence indirectly showing that the employer’s decision was made on
the basis of an illegitimate consideration, the employee has met the burden and the jury may
receive “mixed-motive” instructions. Specifically, the Court held that a plaintiff is only required
to demonstrate that an impermissible factor was used with respect to any employment practice.
The Court’s decision in Desert Palace has created dispute among the circuits regarding
the proper application of the McDonnell Douglas burden-shifting analysis described above. Some
courts have held that the decision did not affect the McDonnell Douglas analysis, while others
have held that it renders the analysis meaningless. The latter position seems unlikely, since the
Court recently applied the traditional McDonnell Douglas analysis in Raytheon Co. v. Hernandez,
supra, a 2003 ADA decision. However, a Fifth Circuit decision incorporated the Desert Palace
decision with McDonnell Douglas analysis in a way that allows plaintiffs to show something
other than “pure” pretext. Rachid v. Jack in the Box, Inc., 376 F.3d 305 (5th Cir. 2004); McMann
v. Greystar Management Services, LP, 2013 WL 6243847, at *6 (W.D. Texas Dec.2, 2013)
(citing Rachid).
The Rachid court considered a claim arising under the Age Discrimination in Employment
Act and held that direct evidence was not required for a plaintiff to receive a mixed-motive
instruction. Instead, the court created a hybrid analysis under which, if a defendant has met
his/her burden of production under the traditional McDonnell Douglas analysis, a plaintiff may
then rebut the proffered reason by showing either: (1) the defendant’s reason was not true, but
was instead pretext for discrimination; or (2) that the defendant’s reason, while true, was only one
of the reasons for its conduct, and another “motivating factor” was the plaintiff’s protected
characteristic. It is the second prong of this hybrid test that incorporates the mixed-motive
analysis.
The Fourth Circuit took a different approach in Diamond v. Colonial Life & Accident Ins.
Co., 416 F.3d 310 (4th Cir. 2005). The plaintiff in Diamond argued that the court’s holding in
Desert Palace abrogated the burden-shifting analysis set forth in McDonnell Douglas, and that to
survive a motion for summary judgment, a plaintiff need only establish the initial prima facie
showing. Under the plaintiff’s argument, an employer with a legitimate, nondiscriminatory
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reason for allegedly discriminatory conduct could only assert that reason as an affirmative
defense, not as a basis for summary judgment.
The Fourth Circuit rejected this argument and asserted that Desert Palace had no practical
effect on the McDonnell Douglas proof paradigm. A plaintiff in a discrimination case has always
had “two avenues of proof” available to avoid summary judgment. Desert Palace simply clarified
that circumstantial as well as direct evidence could be used to establish a genuine issue of
material fact regarding the existence of a discriminatory motive. However, if no such evidence
exists, a plaintiff may still survive summary judgment under the traditional burden-shifting
analysis, and, under Diamond, Desert Palace did nothing to alter that analysis.
Use of Comparators
One court has held that, in determining if an employer’s promotion decision was
pretextual, it is not sufficient to merely compare the qualifications of the plaintiff with those of
the individual awarded the position. Millbrook v. IBP, Inc., 280 F.3d 1169 (7th Cir. 2002);
Hitchcock v. Angel Corps, Inc., 718 F.3d 733, 738 (7th Cir. 2013) (citing Millbrook). The court
stated that considering the qualifications of individuals considered for a position alone without
any evidence of intentional discrimination is not sufficient to support a finding of discrimination.
Should the difference in qualifications be great, however, such a comparison may be sufficient.
See Harvey v. Office of Banks and Real Estate, 377 F.3d 698 (7th Cir. 2004).
Many courts agree with the Seventh Circuit’s position in Harvey, but dissension remains
as to how great the difference in qualifications must be in order for a plaintiff to avoid summary
judgment. The Fifth Circuit granted summary judgment against a plaintiff who, despite offering
some evidence of greater qualification, was unable to show that her qualifications glaringly
outshined the candidate who received the position. Cook v. Mississippi Dep’t of Human Servs.,
108 Fed. Appx. 852, (5th Cir. 2004). Because the plaintiff’s qualifications did not “jump off the
page and slap [the justices] in the face,” the court held that no reasonable juror could conclude
that her qualifications were blatantly superior and therefore capable of establishing pretext. The
Ninth Circuit, on the other hand, has expressly rejected the Fifth Circuit’s “slap in the face”
standard. Raad v. Fairbanks N. Star Borough Sch. Dist., 323 F.3d 1185 (9th Cir. 2003). Instead,
the Raad court required only some basis for disbelieving the employer.
Cat’s Paw Analysis
As indicated above, the Supreme Court held that an employer can be held liable for
violating the Uniformed Services Employment and Reemployment Rights Act under the “cats
paw” theory if the employer relied on more than one individual’s advice in making the decision.
Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011).
As stated above, this is known as the “cat’s paw” theory of liability. The term “cat’s paw”
derives from the 17th century fable “The Monkey and the Cat” by Jean de La Fontaine (16211696). Id. In the fable, a monkey persuades a cat to snatch chestnuts from a fire. Consequently,
the cat burns her paw and the monkey is left with all of the chestnuts. The cat’s paw theory has
been applied to discrimination law to hold employers liable for Title VII violations, even when
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they are unbiased, if they are influenced by biased employees- just as the unsuspecting cat was
influenced by the monkey.
For example, the Fifth Circuit held that the cat’s paw theory applies so long as the same
co-worker “possessed leverage, or exerted influence, over the titular decision-maker.” Roberson
v. Alltel Information Services, 373 F.3d 647 (5th Cir. 2004); Hervey v. Mississippi Dept. of Educ.,
404 Fed.Appx. 865, 872 (5th Cir. 2010).
Now that the Supreme Court reversed and remanded Straub, plaintiffs will have an easier
time presenting evidence of discriminatory animus by non-decisionmakers under the cat’s paw
theory.
SEXUAL HARASSMENT
Courts may also find a violation of Title VII if sexual harassment is established by the
employee showing the existence of either: (1) a hostile work environment; or (2) quid pro quo
harassment (when a term of employment is conditioned upon acceding to unwelcome sexual
behavior).
Hostile Work Environment
A hostile work environment exists where the workplace is permeated with discriminatory
behavior that is sufficiently severe or pervasive for a reasonable person to perceive the
environment as abusive. See Patton v. Keystone, 455 F.3d 812 (7th Cir. 2006) (explaining, “Title
VII protects against employees being subject to a workplace so permeated with harassment on the
basis of sex that the conditions of employment are altered and a ‘hostile’ (or ‘abusive’) work
environment is created.”). It is the harasser’s conduct that must be severe or pervasive, not the
alteration of the conditions of employment. Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993).
Moreover, the discrimination or abusive conduct must be directed toward a particular
gender. EEOC v. Harbert-Yeargin, Inc., 266 F.3d 498 (6th Cir. 2001). Thus, the hostile
environment claim may be supported by sexist remarks which are not sexual, such as, “women
don’t belong in the workplace.” Boumehdi v. Plastag Holdings, LLC, 489 F.3d 781 (7th Cir.
2007) (holding that although the plaintiff’s co-workers directed crude and sexually suggestive
language toward the plaintiff, the conduct was not sexual discrimination because there was no
evidence that the harasser was motivated by sexual desire or was expressing a general hostility
toward a certain sex). Courts will consider the frequency of the conduct, its severity, whether it is
physically threatening or humiliating as opposed to a mere offensive utterance, and whether the
conduct interferes with the employee’s work performance. Harris, 510 U.S. 17. As the Seventh
Circuit noted in Patton, supra, an environment does not rise to the level of “hostile” unless “a
reasonable person would find it offensive and the plaintiff actually perceived it as such.”
The “severe and pervasive” requirement can be very difficult to establish. In Bilal, the
plaintiff, a receptionist, filed a charge of discrimination, followed by a complaint in the district
court, alleging that the CEO of the company she worked for created a hostile work environment.
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Bilal v. Rotec Industries, Inc., 326 Fed. Appx. 949 (7th Cir. 2009). The allegations set forth in
Bilal were particularly disturbing. Specifically, the plaintiff alleged that the CEO made sexual
comments about her body and “what he would do with her [body] if given the opportunity.” She
also alleged that he called her a “useless tease” and told her that “he knows exactly what to do
with a tease.” At one point, he allegedly referred to her as his “beautiful, black, long-legged
stallion.” He also told her that “if she had sex with him it would make her job better.” He invited
her out to dinner on multiple occasions and she declined every time. In addition to the alleged
comments, she also alleged that he “touched her thigh and caressed her buttocks,” “rubbed his
genitals against her arm,” and “took a chocolate out of his mouth and placed it in her mouth while
she was speaking.”
Notwithstanding the alarming allegations set forth in Bilal, the district court granted
summary judgment for the company with respect to the issue of hostile work environment and the
Seventh Circuit affirmed because the alleged conduct was not so “severe and pervasive” as to
alter the conditions of the plaintiff’s employment. The Seventh Circuit reasoned that the alleged
comments “though clearly boorish and unprofessional, were not the type of humiliating and
threatening statements that could be considered severe in isolation.” Id. at 7.
Generally, isolated sexually offensive incidents will not support a sexual harassment
claim. “The [harassing] incidents must be repeated and continuous; isolated acts or occasional
episodes will not merit relief.” Kotcher v. Rosa & Sullivan Appliance Center, Inc., 957 F.2d 59,
62 (2d Cir. 1992); McKenzie v. Illinois Department of Transportation, 92 F.3d 473, 480 (7th Cir.
1996). For example, in Clark County Sch. Dist. v. Breeden, 532 U.S. 268 (2001), a school district
employee, who was required her to review job applicant profiles, sued the school district after one
profile contained a sexually explicit statement, about which her male co-workers in the screening
process made comments and laughed. The United States Supreme Court found that this single
incident was not enough to constitute sexual harassment, and stated that sexual harassment is
actionable under Title VII only if it is so severe or pervasive as to alter conditions of victim's
employment and create an abusive working environment.
Similarly, the First Circuit has held that a supervisor’s conduct in making a gesture
indicating a desire to have sex with the plaintiff, while certainly crude, comprised only a single
incident and was not severe or pervasive enough to establish a hostile environment. Pomales v.
Celulares Telefonica Inc., 447 F.3d 79 (1st Cir. 2006).
Nevertheless, courts have recognized that direct contact with an “intimate body part” is a
severe form of sexual harassment and the Seventh Circuit suggested that a supervisor running his
hand up the employee’s inner thigh and under her shorts “might be sufficient alone to create an
abusive working environment.” Patton v. Keystone, 455 F.3d 812 (7th Cir. 2006). However, the
Eighth Circuit held that a single instance where a co-worker touched and grabbed an employee’s
breast was not sufficiently severe to create a hostile work environment. Sutherland v. Missouri
Dept. of Corrections, 580 F.3d 748 (8th Cir. 2009).
The Supreme Court has also noted that Title VII is not a “general civility code,” and that
conduct must be examined in the social context in which it occurs. Oncale v. Sundowner
Offshore Services, 523 U.S. 75 (1998). For instance, certain conduct may be acceptable on a
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football field but inappropriate in the coach’s office. Furthermore, the requirement of severe
conduct ensures that courts and juries do not mistake ordinary socializing in the workplace for
discriminatory conditions of employment. Id. Accordingly, the Seventh Circuit held that where
co-workers cursed at the plaintiff and used vulgar language in her presence, the incidents were
“more reflective of run of the mill uncouth behavior than an atmosphere permeated with
discriminatory ridicule and insult.” Racicot v. Wal-Mart Stores, Inc., 414 F.3d 675 (7th Cir.
2005).
On the other hand, however, a company president propositioning an employee for sexual
activity three times during the course of a single meeting was found to be so severe that a jury
could conclude that it constituted a hostile work environment. Quantock v. Shared Marketing
Servs. Inc., 312 F.3d 899 (7th Cir. 2002). The court did not believe the conduct was pervasive,
but in considering that the president made the requests for sex directly to the plaintiff, the
president’s position of authority, and the close working quarters, the court concluded that the
conduct was so severe that a reasonable jury could find that there was a hostile work environment.
But see Krause v. Turnberry Country Club, 571 F.Supp. 2d 851 (N.D. Ill. 2008) (holding that
employer’s conduct included asking the plaintiff what type of underwear she wore, requesting to
see the plaintiff's tan lines, telling the plaintiff that he bought his wife a sex toy, and asking the
plaintiff to engage in phone sex did constitute pervasive and severe conduct).
Additionally, where sexual contact occurs, claims of harassment do not necessarily hinge
on whether that contact was consensual. That the sexual contact which occurred was “voluntary”
in the sense that the plaintiff was not forced to participate is never the appropriate consideration.
Instead, it is whether the alleged sexual advances were unwelcome. Rodriguez v. City of Houston,
250 F. Supp. 2d 691 (S.D. Tex. 2003). A case from the Southern District of Illinois illustrates
that the consideration is not as subjective as it might first appear. In Boyd v. Vonnahmen, the
court stated that the appropriate question is “whether the victim by her conduct indicated that the
alleged sexual advances were unwelcome, not whether her actual participation in sexual
intercourse was voluntary.” Boyd, 1995 WL 420040 (S.D. Ill. March 29, 1995) (emphasis added),
citing Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986).
Quid Pro Quo Harassment
Quid pro quo harassment occurs where the employee’s acceptance of the harassment is an
expressed or implied condition of employment or advancement, or where the employee’s
rejection of the harassing conduct leads to a tangible employment action. In other words, quid
pro quo harassment occurs where a supervisor conditions the granting of an economic or other job
benefit upon the receipt of sexual favors from a subordinate, or punishes that subordinate for
refusing to comply. Cortes v. Nieves Valle, 253 F. Supp. 2d 206 (D. P.R. 2003), aff’d, 375 F.3d
35 (1st Cir. 2004). In Cortes, quid pro quo harassment was found where a supervisor repeatedly
propositioned a female employee with whom he had a previous sexual relationship, and
terminated the employee upon her rejection of those advances. However, feelings of job
insecurity alone are insufficient to constitute the tangible employment action required to
adequately plead a claim of quid pro quo harassment. An v. Regents of U. of Cal., 94 Fed. Appx.
667, 2004 WL 188192 (10th Cir. 2004).
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SAME-SEX HARASSMENT
Title VII also prohibits same-sex harassment, which constitutes discrimination. A plaintiff
may be able to establish discrimination resulting from same-sex harassment under three different
theories: (1) an alleged homosexual harasser made explicit or implicit proposals of sexual
activity; (2) the harasser was motivated by general hostility to the presence of persons of the
plaintiff’s sex in the workplace; or (3) by offering direct, comparative evidence showing how the
harasser treated members of both sexes in the workplace. La Day v. Catalyst Technology Inc.,
302 F.3d 474 (5th Cir. 2002). In contrast, in Le Grand v. Area Resources for Community and
Human Services, 394 F.3d 1098 (8th Cir. 2005), the court held that where a parish priest
propositioned the plaintiff, hugged and kissed the plaintiff, and brushed his hand against the
plaintiff’s crotch, all over a nine-month period, the conduct was not severe or pervasive enough to
be actionable as same-sex harassment.
Same-sex harassment can be motivated not only by sexual desire, but also by general
hostility. Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998). When analyzing a
same-sex harassment case, courts use “common sense, and an appropriate sensitivity to social
context” to determine if the conduct is mere teasing and horseplay with the same sex or a hostile
and abusive environment.
For instance, in Johnson v. Hondo, 125 F.3d 408 (7th Cir. 1997), the Seventh Circuit
noted that expressions such as “fuck me,” “kiss my ass,” and “suck my dick,” are commonplace
in certain circles, and more often than not, when used (particularly when uttered by men speaking
to other men), the use has no connection whatsoever with the sexual acts to which they make
reference, even when they are accompanied by “a crotch-grabbing gesture.” Johnson, at 412. The
employer’s motion for summary judgment was granted, with the court finding that the plaintiff
failed to raise a genuine issue of material fact, as the alleged expressions were “nothing more than
vulgar provocations having no causal relationship to Johnson’s gender as a male.” Id., at 413. But
see Shepherd v. Steels Corp., 168 F.3d 998 (7th Cir. 1999) (holding that comments “borne of
sexual attraction” such as referring to the plaintiff as a “handsome young man,” an encounter
where a co-employee “rubbed himself into an erection” while the plaintiff was laying on his
stomach and the co-employee urged the plaintiff to turn over, lest he “crawl up on top of the
plaintiff and fuck him in the ass,” and the co-employee remarking to Shepherd another time that
“[a] man can come if he's fucked in the ass,” were considered by the court to exceed casual
obscenity.)
Same-sex harassment claims can only be raised where the harassment is “because of sex.”
Thus, a same-sex harassment claim under Title VII will not succeed where the defendant harasses
an individual based on sexual orientation or harasses males and females alike without regard to
gender. Caines v. Forest Park, No. 02 C 7472, 2003 WL 21518558 (N.D. Ill. 2003). For
example, in Nichols v. Azteca Restaurant Enterprises, Inc., 256 F.3d 864 (9th Cir. 2001), the
court held that a male restaurant worker’s complaints of abuse by male co-workers were “because
of” his sex and were therefore actionable under Title VII. The court found that the verbal abuse
he suffered at the hands of his male co-workers, which included referring to him as “she” and
“her,” commenting that he walked and carried his tray “like a woman,” and mocking him for not
having sexual intercourse with a female friend, was sufficient to establish hostile work
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environment sexual harassment. This abuse, according to the court, reflected a belief among his
co-workers that he did not act as a male should.
Similarly, in Shepherd v. Slater Steels Co., 168 F.3d 998, 1001 (7th Cir. 1999), a male
employee claimed that he was sexually harassed by a male co-worker, and the Seventh Circuit
Court of Appeals found that the complainant had put forth a genuine issue of material fact as to
whether or not he was harassed on the basis of his sex. Among his allegations, the complainant
alleged that the harasser called him “handsome,” slapped him on the buttocks, exposed his penis
four or five times weekly, and repeatedly grabbed his penis and “rubbed himself” into an erection
as he threatened to sexually assault the complainant. Shepherd, at 1011. The court also pointed
out that the record in that matter included evidence that the alleged harasser had exposed himself
to other men at the workplace. Id., at 1003.
Likewise, in Prowel v. Wise Business Forms, Inc., No., 579 F.3d 285 (3d Cir. 2009), the
Third Circuit Court of Appeals ruled that although federal law does not prohibit sexual orientation
discrimination in the workplace, it does prohibit employers from discriminating against gay and
lesbian employees who do not conform to gender stereotypes. While the United States Supreme
Court recognized “gender stereotyping” discrimination as a valid claim under Title VII 20 years
ago, Prowel makes clear that homosexual employees can go to trial to assert gender stereotyping
claims even if the discrimination is based in part on sexual orientation, where there is sufficient
evidence to conclude that the discrimination was based on the employee’s failure to conform to
gender stereotypes.
OTHER FORMS OF HARASSMENT
While sexual harassment is the most commonly discussed form of harassment, Title VII
prohibits all forms of harassment based on the categories protected by the Act. Indeed, Title VII
prohibits harassment on the basis of a person’s race, color, national origin, and religion, in
addition to sex. Harassment based on national origin, race/color, and religion can take many
forms, including racial, ethnic, or religious slurs, workplace graffiti, or other offensive conduct
directed towards an individual’s race, religion, birthplace, ethnicity, culture, or foreign accent.
Regardless of the basis, harassment violates Title VII when it is so severe or pervasive that
the individual being harassed reasonably finds the work environment to be hostile or abusive.
Employers must be aware that a hostile environment may be created by the actions of supervisors,
coworkers, or even non-employees such as customers or business partners.
SEX STEREOTYPING
An analysis similar to that applied by the Ninth Circuit in Nichols, discussed above, has
been employed to find discrimination on the basis of gender stereotypes, even though such claims
were originally characterized as outside the scope of Title VII’s protection. As mentioned above,
the court in Oncale held that while harassment based on one’s sex is prohibited under Title VII,
harassment based on one’s sexual orientation is not. However, in Price Waterhouse v. Hopkins,
490 U.S. 228 (1989), the Supreme Court held that Title VII’s prohibition of discrimination
“because of … sex” barred gender discrimination, including sex stereotypes. The essence of the
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Price Waterhouse holding was that a corporation could not discriminate against a female
employee because she failed to “act” like a woman.
For example, the Sixth Circuit applied this logic to hold that a transsexual could state a
viable claim for discrimination under Title VII. Smith v. City of Salem, Ohio, 378 F.3d 566 (6th
Cir. 2004). In Smith, the plaintiff claimed that he was discriminated against because of his failure
to conform to sex stereotypes by expressing feminine mannerisms and appearances. The court in
Smith found such allegations sufficient to state a claim under Title VII and explicitly rejected prePrice Waterhouse holdings that transsexuals were not protected. The Smith court stated, “After
Price Waterhouse, an employer who discriminates against women because, for instance, they do
not wear dresses or makeup, is engaging in sex discrimination because the discrimination would
not occur but for the victim’s sex. It follows that employers who discriminate against men
because they do wear dresses and makeup, or otherwise act femininely, are also engaging in sex
discrimination, because the discrimination would not occur but for the victim’s sex.”
Similarly, the Tenth Circuit has held that Title VII’s prohibition against sex discrimination
extends to transsexuals only if they are discriminated against because they are male or because
they are female, not because of their status as a transsexual. Etsitty v. Utah Transit Auth., 502
F.3d 1215 (10th Cir. 2007) (ruling that an employer’s requirement that employees use restrooms
matching their biological sex is not prohibited by Title VII).
Judge Posner of the Seventh Circuit offered a thoughtful analysis of the developing area of
sex stereotyping jurisprudence in a concurring opinion in Hamm v. Weyauwega Milk Prods., Inc.,
332 F.3d 1058 (7th Cir. 2003). In Hamm, the court held that being perceived to be gay is not the
same as sexual harassment. Judge Posner went on to address what he termed “a curious
distinction” within Title VII case law which does not protect homosexuals from discrimination on
the basis of their sexual orientation, but does protect heterosexuals who are victims of “sex
stereotyping,” stating:
If an employer refuses to hire unfeminine women, its refusal bears more heavily on
women than men, and is therefore discriminatory. That was the Hopkins case. But
if, as in this case, an employer…discriminates against effeminate men, there is no
discrimination against men, just against a subclass of men. They are discriminated
against not because they are men, but because they are effeminate. If this analysis
is rejected, the absurd conclusion follows that the law protects effeminate men
from employment discrimination, but only if they are (or believed to be)
heterosexuals. To impute such a distinction to the authors of Title VII is to indulge
in a most extravagant legal fiction….“Sex stereotyping” should not be regarded as
a form of sex discrimination, though it will sometimes, as in the Hopkins case, be
evidence of sex discrimination.
However, the Second Circuit expressly rejected Judge Posner’s assertion that sex
stereotyping should only serve as evidence of sex discrimination. In Back v. Hastings On Hudson
Union Free Sch. Dist., 365 F.3d 107 (2d Cir. 2004), the Second Circuit held that sex stereotyping
alone can constitute an actionable form of unlawful sex discrimination. In Back, the plaintiff
claimed that the defendants held the stereotypical belief that young mothers were incapable of
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handling work and motherhood, and therefore terminated her upon completion of maternity leave.
The court held that stereotypical comments made by the school’s principal and director of
personnel were sufficient to constitute direct evidence of discriminatory intent and sufficient to
establish a prima facie case, even where the statements were uncorroborated. Although this case
was brought under Section 1983, not Title VII, the holding is nevertheless instructive regarding
the importance of this developing area of discrimination law. Similarly, the Sixth Circuit upheld
a sex stereotyping verdict under Title VII where a transgendered police officer was found to be
demoted for failure to conform to male stereotypes. Barnes v. Cincinati, 401 F.3d 729 (6th Cir.
2005). See also Dawson v. Bumble & Bumble, 398 F.3d 211 (2d Cir. 2005).
EMPLOYER LIABILITY FOR HARASSMENT BY SUPERVISORS
Under Title VII, the standard for harassment by supervisors is strict liability, whereas the
standard for harassment by co-workers is negligence. Title VII does not define the term
“supervisor.” Until Vance v. Ball State University was decided earlier this year, there was a
circuit split as to how the term “supervisor” was defined. 133 S. Ct. 2434 (2013). A majority of
the Circuits concentrated on whether the individual had the authority to make key personnel
decisions, such as whether the employee “had the power to fire, hire, demote, promote, transfer,
or discipline another employee.” Parkins v. Civil Contractors of Illinois, Inc., 163 F.3d 1027 (7th
Cir. 1998). See also Wooten v. Federal Express Corp., 325 Fed.Appx. 297 (5th Cir. 2009) (to be
considered a “supervisor” under Title VII of the Civil Rights Act, a co-worker must have the
power to directly affect the terms and conditions of the plaintiff’s employment (such as the
authority to discipline or evaluate performance); Joens v. John Morrell & Co., 354 F.3d 938, 940
(8th Cir. 2004) (“[T]o be a supervisor, the alleged harasser must have had the power to take
tangible employment action against the victim, such as the authority to hire, fire, promote, or
reassign to significantly different duties.”); Doe v. Oberweis Dairy, 456 F.3d 704 (7th Cir. 2006)
(concluding that a shift supervisor, although he had no authority to fire the plaintiff, was
nonetheless a “supervisor” for purposes of Title VII liability because he was often the only
supervisor present and was thus “in charge.”) Vance adopted the position of the majority of
circuits and held that a “supervisor” under Title VII is an individual who “is empowered by the
employer to take tangible employment actions against the victim.” Vance, 133 S. Ct. at 2439. A
tangible employment action includes any action that would cause “a significant change in
employment status, such as hiring, firing, failing to promote, reassignment with significantly
different responsibilities, or a decision causing a significant change in benefits.” Id. at 2443
(internal quotations omitted).
A minority of the courts took a broader approach and focused on the individual’s power to
direct and control the daily, on-the-job activities of another. Mack v. Otis Elevators, 326 F.3d 116
(2d Cir. 2003). For instance, one court adopted a broad definition of which positions qualify as
“supervisory” when it held that the primary focus is “whether the power the offending employee
possessed was reasonably perceived by the victim, accurately or not, as giving that employee the
power to adversely affects the victim’s working life.” Entrot v. BASF Corp., 359 N.J.Super. 162,
819 A.2d 447 (2003). Under this approach, the emphasis was not placed on the amount of
authority the harassing employee possessed, but rather, concentrated on the victim’s reasonable
perception of the harassing employee’s authority. The EEOC has also seemingly embraced this
subjective test in part to determine supervisor status. See EEOC’s Enforcement Guidance on
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Vicarious Employer Liability for Unlawful Harassment by Supervisors, § III(B). However,
Vance rejected the EEOC’s definition of “supervisor,” and the Court expressly overruled Mack.
Vance, 133 S. Ct. at 2443.
More specifically, in Rhodes v. Illinois Dept. of Transp., the Seventh Circuit held that
when considering whether a “supervisor” was the harasser, it is not enough that the harasser had
managerial authority; instead, the harasser must have served specifically as the plaintiff’s
supervisor. 359 F.3d 498 (7th Cir. 2004). Rhodes was decided consistently with Vance. In
Rhodes, the harasser managed the plaintiff’s work assignments, investigated complaints and
disputes, and made recommendations concerning sanctions for rule violations to the Department
Administrative Services Manager. However, it was undisputed that the harasser had no authority
to make any decisions affecting the terms and conditions of the plaintiff’s employment, i.e., the
authority to hire, fire, promote, demote, discipline or transfer. Consequently, the harasser could
not be deemed a “supervisor” for purposes of Title VII.
On the other hand, in 2009, the Illinois Supreme Court clarified Illinois’ position as it
relates to strict liability for manager conduct. Sangamon County Sheriff’s Department v. Illinois
Human Rights Commission, 233 Ill.2d 125 (2009). Although this decision related to a claim of
discrimination under the Illinois Human Rights Act, as opposed to Title VII, it is likely that this
decision will have an impact in the Seventh Circuit as well. In Sangamon County Sheriff’s
Department, an employee claimed that a sergeant of the department sexually harassed her. The
Illinois Human Rights Commission (“IHRC”) found for the employee and held the employer
strictly liable for the sergeant’s actions. The employer appealed, and the Appellate Court
overturned the IHRC’s decision, finding that there was no legal theory for holding the Sheriff’s
Department strictly liable for the sergeant’s actions. The Illinois Supreme Court reversed,
holding that employers are strictly liable for the sexual harassment of an employee by a
supervisory employee. Sangamon, at 141. The Court found that even where a supervisor does not
have direct authority over the employee’s working conditions, the employer can be held strictly
liable for the harassment. Id., at 137.
The qualification of an employee as a “supervisor” is not merely academic, as employers
may be held liable under Title VII for sexual harassment by supervisors. The Supreme Court, in
two decisions, clarified an employer’s liability originating from sexual harassment by its
supervisors. An employer may now be held vicariously liable for the hostile environment created
by an employee’s immediate or successively higher supervisor, despite having no notice of the
harassing conduct. If the employee’s supervisor significantly alters the terms or conditions of
his/her employment, then no affirmative defense is available to the employer. That is, if the
action is sufficiently serious and is endorsed by the employer, then the employer should not be
able to raise a defense to the action.
If, on the other hand, the supervisor merely threatens to alter the terms and conditions of
employment and no tangible employment action occurs, then the employer may assert an
affirmative defense by establishing that: (1) the employer exercised reasonable care to prevent
and promptly correct any sexually harassing behavior; and (2) that the plaintiff failed to take
advantage of any preventative or corrective opportunities provided by the employer or to avoid
harm otherwise. Thus, these cases demonstrate the necessity for distributing clearly established
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anti-harassment policies and procedures to all employees. Faragher v. City of Boca Raton, 524
U.S. 775 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998).
An interesting development in the area of supervisory conduct occurred in Miller v.
Department of Corrections, 115 P.3d 77 (Cal. Sup. Ct. 2005). In Miller, two female prison
employees alleged that several of their co-workers received preferential treatment because they
were having affairs with the prison’s warden. The affairs were widely known, and several
employees had witnessed the warden fondling favored employees at work-related events. The
warden had also intervened to secure a promotion for one of the favored employees, against the
recommendations of a review panel, and he promoted another favored employee over a morequalified plaintiff.
The plaintiff sued, claiming that the favoritism created a sexually hostile work
environment. The California trial court entered judgment against the plaintiff. This decision was
affirmed by the Court of Appeals, which held that the supervisor’s grant of favorable treatment to
a paramour does not, by itself, constitute sexual harassment against other non-favored employees.
The California Supreme Court relied on the EEOC’s Policy Guidance on Employer
Liability under Title VII for Sexual Favoritism and found that managers who engage in
widespread sexual favoritism may communicate a message to women that they can get ahead in
the workplace by engaging in sexual conduct or that sexual solicitations are a prerequisite to fair
treatment at work.
The court found that this could form the basis for an implicit quid pro quo harassment
claim, as well as a hostile environment claim for both women and men who find this behavior
objectionable. The court further noted that male employees who know of the sexual liaisons and
believe that they are treated less favorably as a result, could also maintain a claim for hostile
environment. But see Alaniz v. Robert M. Peppercorn, M.D., Inc., 2007 WL 1299804 (E.D. Cal.
2007) (holding that in a claim for workplace harassment based upon favoritism, the plaintiff must
demonstrate “widespread sexual conduct” such as open affairs with significant favoritism that
permeated the working environment, involving unfettered abuse and harassment and repeated
promotions based on sexual favors rather than on qualifications).
AFFIRMATIVE DEFENSES
Courts now widely use the Faragher and Ellerth cases in determining whether an
affirmative defense to a Title VII claim is available. For example, in Hill v. American General
Finance, Inc., 218 F.3d 639 (7th Cir. 2000), the plaintiff made anonymous complaints against her
supervisors, which were promptly investigated and responded to by the employer. The
supervisor’s salary was cut by $10,000.00, and he was transferred out of the office. After the
investigation was concluded, the plaintiff sued for race and sexual harassment. The court applied
the Ellerth/Faragher test and determined that the employer exercised reasonable care to prevent
harassment and that the plaintiff had unreasonably failed to take advantage of the employer’s
corrective measures.
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Along the same lines, the Fifth Circuit held that an employee’s failure to make a second
report under the employer’s harassment policy after her supervisor refused to act on her first
complaint, precluded Title VII liability. Lauderdale v. Texas Dep’t of Criminal Justice, 512 F.3d
157 (5th Cir. 2007). According to the Seventh Circuit, an employer cannot “be criticized for
attempting to work with complainants who do not wish to lodge formal complaints.” Jackson v.
County of Racine, 474 F.3d 493 (7th Cir. 2007). One sign of an employee’s unreasonable failure
to use an employer’s anti-harassment procedures is undue delay in reporting the issue. Id.
Similar to the court’s decision in Hill, an employer was not liable for sexual harassment by a coworker where the employer suspended the co-worker without pay and warned him that additional
harassment would result in termination, even though the co-worker continued to harass upon his
return from suspension. Engel v. Rapid City Sch. Dist., 506 F.3d 1118 (8th Cir. 2007). The court
held that the employer’s actions were “reasonably calculated” to stop the harassment. Id.
An employer is precluded from raising the Faragher/Ellerth affirmative defense in certain
cases, such as where the alleged harassment includes a “tangible employment action.”
Pennsylvania State Police v. Suders, 542 U.S. 129 (2004). Tangible employment actions include
conduct such as discharges and demotions. However, in Suders, the Supreme Court rejected the
assertion that a constructive discharge, where it is found that a reasonable person would resign as
a result of the harassment, always qualifies as a tangible employment action. In Suders, a female
state police officer alleged that supervisors harassed her for a four-month period and raised false
accusations of theft against her, which led to her resignation. The Court held that a constructive
discharge will be viewed as a “tangible employment action” only where an “official action” of the
employer is involved. Although the Court offered little insight into what constitutes an “official
act,” it cited two Circuit Court cases that addressed the issue. See Robinson v. Sappington, 351
F.3d 317 (7th Cir. 2003) (unpublished decision); Reed v. MBNA Marketing Systems, Inc., 333
F.3d 27 (1st Cir. 2003). But see Chaloult v. Interstate Brands Corp., 540 F.3d 64 (1st Cir. 2008)
(holding that the plaintiff, in waiting to report harassment, did not act reasonably, especially in
light of the fact that the plaintiff was a supervisor herself).
Some decisions have already begun to illustrate how an employer may succeed in using
the Faragher/Ellerth affirmative defense in light of Suders. A Seventh Circuit decision illustrates
that employers may avoid liability for the actions of supervisors where the employer’s response is
quick and effective. See McPherson v. City of Waukegan, 379 F.3d 430 (7th Cir. 2004). In
McPherson, a former city employee brought a Title VII claim alleging sexual harassment and
constructive discharge. The former employee asserted that the Assistant Building Commissioner
made sexually inappropriate remarks to her over a period of time and eventually sexually
assaulted her. It was not until the sexual assault that the employee reported the conduct to her
employer. However, upon learning of the supervisor’s conduct, the employer informed the
supervisor that he could either be suspended immediately or resign, offered the plaintiff 30 days
of paid leave starting immediately, allowed her to take another 22 days of accrued paid leave, and
offered her the ability to seek additional discretionary leave if she wanted. Additionally, toward
the end of the plaintiff’s leave period, in response to an inquiry regarding her employment status,
the employer sent her a letter indicating that the offending supervisor had been removed and that
she was still considered an active and valued employee. The Seventh Circuit affirmed summary
judgment based on the Faragher/Ellerth defense. In so doing, it relied on language from Suders,
which expressed that not only must a hostile work environment be established; it also must be
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shown that the environment “was so intolerable that her resignation was an appropriate response.”
The effectiveness of the response prohibited the employee from making such an argument.
However, for purposes of guidance, this decision should be compared with another
Seventh Circuit case, Robinson v. Sappington, 351 F.3d 317 (7th Cir. 2004). This decision came
down shortly before Suders, and the Suders court relied upon it as an example of the proper
analysis to determine whether a constructive discharge qualified as a tangible employment action.
In Robinson, a clerk was subjected to months of harassing conduct by the judge for whom she
worked. When the clerk reported the conduct to the presiding judge, she was informed that she
would be transferred, but warned that the new assignment “would probably be hell for the first six
months” and that it would be in her best interest to simply resign. The court found that this
conduct led to a constructive discharge that constituted a tangible employment action. As such,
while the court did not directly discuss that issue, the Ellerth/Faragher defense would have been
unavailable.
The Suders court also looked to the First Circuit’s decision in Reed v. MBNA Mktg. Sys.,
Inc., 333 F.3d 27 (1st Cir. 2003) as an example of appropriate analysis. In Reed, the court held
that the relevant consideration should be the underlying reasons for the Supreme Court’s
preclusion of the Faragher/Ellerth affirmative defense for tangible employment actions. This
preclusion was based on the understanding that where official action caused the tangible
employment action, the law of agency provided for liability. However, where no official action,
i.e. unauthorized conduct, occurred, no strict liability could be found and, therefore, an
affirmative defense should be made available. In Reed, an employee was sexually harassed by
her supervisor but did not report it until a year later. However, upon reporting the harassment, the
employer began an investigation that day, and the supervisor was terminated. Consequently, the
Reed court found the facts to be “exactly the kind of wholly unauthorized conduct for which the
affirmative defense was designed.” The court found that while the supervisor’s status may have
“facilitated” the harassment, this is only a reason to establish vicarious liability under agency law,
not to impose per se strict liability.
The foregoing decisions serve to illuminate the proper course of action upon receiving
notice of discriminatory conduct by a supervisor. It is imperative that employers act swiftly upon
notice of the harassment and that the actions taken effectively eliminate those aspects of the
workplace environment that could lead to an employee’s resignation being deemed an appropriate
response.
An employer may also be able to raise the Faragher/Ellerth affirmative defense to state
specific claims. In State Department of Health Services v. Superior Court, 79 P.3d 556 (2003),
the California Supreme Court held that although an employer could not use the Faragher/Ellerth
affirmative defense to completely escape liability to a state Fair Employment and Housing Act
claim, an employer could limit the extent of its damages by showing that the employer
implemented a program to eliminate and correct sexual harassment and the employee
unreasonably failed to utilize the program. The Court based its holding on California’s
“avoidable consequences” doctrine.
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Employers should be mindful of one decision, which held that the Faragher/Ellerth
affirmative defense is not available to employers where it is shown that “successful coercion of
sex” occurred. The court held that “successful coercion of sex” is a tangible employment action
where “the participation in unwanted sexual acts becomes a condition of the employee’s
employment – a critical condition that effects a substantial change in the terms of the
employment.” Further, the court stated that a claim of “successful coercion” exists when
“continued employment has been expressly conditioned on participation in sexual acts or a
reasonable woman would find that such participation is a condition of employment.” Therefore,
an employee may prevent the employer’s raising of an affirmative defense even if it is not shown
that the terms of employment were actually conditioned upon performing sexual acts, so long as
the employee reasonably believed that participation was a condition of employment. Holly D. v.
California Institute of Technology, 339 F.3d 1158 (9th Cir. 2003).
Since the Faragher and Ellerth decisions, the case law continues to illustrate the
importance of creating an effective anti-harassment policy and ensuring that all employees are
aware of and understand that policy. For instance, the Fourth Circuit has ruled that it could not,
as a matter of law, find that an employer’s harassment policy was reasonably designed to prevent
and correct unlawful harassment where: (1) no training or discussion was provided on sexual
harassment; (2) the policy failed to inform employees that they would not be retaliated against for
bringing complaints; and (3) the policy directed employees to report complaints to one of four
managers, one of whom was the harasser and the other three of whom were his friends. Williams
v. Spartan Commun., Inc., 210 F.3d 364 (4th Cir. 2000). This last point illustrates the importance
of providing alternate parties to whom a complaint may be raised. Effective policies will allow
employees to bring complaints to an alternate employee where a conflict with the initial reportee
exists and/or where the initial reportee is the alleged harasser.
One large question concerning the application of the Faragher/Ellerth defense was
resolved by the Eighth Circuit in a decision destined to create consternation amongst the circuits.
The second prong of the Faragher/Ellerth defense requires a showing that the plaintiff employee
unreasonably failed to take advantage of the preventative or corrective opportunities provide by
the employer. This prong begs the question: What is the result where the harassment consisted of
merely one serious incident of harassment, which was promptly reported? The Eighth Circuit
held that single instances of harassment do not bar the availability of the Faragher/Ellerth
defense. McCurdy v. Arkansas State Police, 375 F.3d 762 (8th Cir. 2004), cert. denied, 543 U.S.
1121 (2005).
In McCurdy, a female employee was subject to one hour of sexually harassing behavior by
her supervisor, including inappropriate physical conduct and sexual remarks. The employee
reported the incident within hours of its occurrence. The employer responded by taking
immediate steps to ensure that no further contact occurred between the plaintiff and her
supervisor while an investigation was conducted. Upon conclusion of the investigation, the
harasser was transferred to another location and demoted. The plaintiff argued that strict liability
should result despite the employer’s swift and effective response because the second prong of
Faragher/Ellerth could not be satisfied. The Eighth Circuit expressly rejected this claim,
explaining that the “underlying theme of Title VII is employers should nip harassment in the
bud.” Consequently, the employer was entitled to a modified application of Faragher/Ellerth.
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Under this holding, an employer likely need only demonstrate that swift and effective action was
taken in response to the reporting of a single incident of harassment. But see Reed v. Cedar
County, 474 F.Supp.2d 1045 (N.D. Iowa 2007) (holding that the McCurdy modification did not
apply because it was not a case involving “a single incident of supervisor sexual harassment not
resulting in tangible employment action”).
HARASSMENT BY A NON-SUPERVISOR
In circumstances where the alleged harasser is a non-supervisor, the traditional rule of
notice still applies. An employer that has been put on notice that an employee is being harassed
faces liability under the Act for failing to take action to preclude discriminatory behavior.
In the Seventh Circuit, an employer is “on notice” if the person being harassed notifies
either the appropriate person under the company harassment policy or someone whom the
harassed employee reasonably believes to be authorized to receive and pass on complaints, such
as a department head or supervisor. Notice does not need to be given to upper-level management
for it to be effective. Young v. Bayer Corp., 123 F.3d 672 (7th Cir. 1997). The employer is also
put on notice and may be held liable if a co-worker, but not the harassee, reports the conduct.
Bombaci v. Journal Cmty. Publ’s Group, Inc., 482 F.3d 979 (7th Cir. 2007). See also Johnson v.
City of Marseilles, 2008 WL 94803 (2008), where the court found that the employee did put the
employer on sufficient notice of her complaint by showing her supervisor a suggestive email,
even though she asked him not to say anything about it.
However, some courts merely require that the employer knew or should have known of
the sexual harassment. Minnich v. Copper Farms, Inc., 39 Fed. Appx. 289, 2002 WL 1396910
(6th Cir. 2002). In Minnich, the plaintiffs made numerous complaints to superiors concerning a
co-worker’s repeated sexual advances, sexual comments, and physical contact. The court held
that, based on the severity and frequency of the plaintiffs’ claims of sexual harassment from the
co-worker, there was a triable issue of fact and summary judgment in favor of the employer was
not appropriate.
The Seventh Circuit emphasized, “the law of our circuit supports Title VII’s goals by
holding an employer liable under Title VII’s negligence standard if it ‘failed to discover and
prevent’ sexual harassment of an employee giving rise to a hostile work environment.” See
Erickson v. Wisconsin Department of Corrections, 469 F.3d 600 (7th Cir. 2006). The court noted,
however, that liability can arise only after the employee provides the employer with “enough
information to make a reasonable employer think that there was some probability that she was
being sexually harassed.” Id., citing Zimmerman v. Cook County Sheriff’s Dep’t, 96 F.3d 1017
(7th Cir. 1996). It explained that, in determining the risk of sexual harassment, employers
typically draw upon two sources of information: information received directly from the
employee, and the employer’s knowledge of the specific context of its own working environment.
In Erickson, the court held that the employee’s effort to bring a threat of potential harassment to
the employer’s attention could support a finding of employer liability under Title VII for
negligence in assessing the risk that the female employee would be harassed by a male prisoner.
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However, the Eleventh Circuit has held that a well-enforced and widely distributed policy
against sexual harassment can rebut a plaintiff’s claim that an employer should have known that
she was being harassed. Farley v. American Cast Iron Pipe Co., 115 F.3d 1548 (11th Cir. 1997).
A Seventh Circuit decision also supports this position. In Durkin v. City of Chicago, 341 F.3d
606 (7th Cir. 2003), the plaintiff failed to properly make a complaint in accordance with the
employer’s established procedure. However, she argued that the failure was not fatal to her claim
because she complained to many people about the alleged harassment. The court noted that while
such an assertion could theoretically establish the notice requirement, the plaintiff’s comments
were vague and did not specifically address the issue of sexual harassment. Consequently,
because the employer had a reasonable mechanism in place for detecting and correcting
harassment, the employer’s failure to respond to the vague comments of the employee did not
constitute negligence sufficient to create liability. Nevertheless, a material issue of fact can exist
concerning whether a defendant actually had an effective harassment policy in place. Watson v.
Blue Circle Inc., 324 F.3d 1252 (11th Cir. 2003). This stance could serve to preclude summary
judgment, and the Watson decision reinforces the importance of maintaining and disseminating
well-crafted sexual harassment policies.
Moreover, an employer can defend against allegations of co-worker harassment by
showing prompt and effective response to reports of such harassment. The Seventh Circuit Court
of Appeals analyzed specific actions taken by an employer after a noose was found hanging in a
workplace, and found those actions to have been sufficient to uphold summary judgment in favor
of the employer. Porter v. Erie Foods International, Inc., 576 F.3d 629 (7th Cir. 2009). In Porter,
the court determined that the steps taken by two of the employer’s managers showed that they
took the harassment seriously and made a reasonable effort to bring the harassment to an end. The
actions of the managers in informing their own supervisors of the incident, making attempts to
find out who was responsible, reminding employees of company anti-discrimination policies, and
following up with the plaintiff-employee, formed the basis of prompt and effective remedial
action sufficient to defend against the plaintiff’s claims of co-worker harassment.
The important point for employers to take away from Porter is the court’s statement that
“[i]n assessing corrective action, our focus is not whether the perpetrators were punished by the
employer, but whether the employer took reasonable steps to prevent future harm.” Certainly,
what steps are reasonable will be dependent upon the specific facts of each situation. However,
the actions taken by the employer in Porter should stand as a minimum checklist for a “prompt
and effective” reaction to incidents of co-worker harassment.
SEX DISCRIMINATION AND THE PREGNANCY DISCRIMINATION ACT
In 1976, Congress amended Title VII to provide that discrimination because of or based
upon sex includes, but is not limited to, pregnancy, childbirth or related medical conditions.
See Griffin v. Sisters of Saint Francis, Inc., 489 F.3d 838, 842–43 (7th Cir.2011) (explaining that
for purposes of Title VII, discrimination based on pregnancy is discrimination based on sex). This
provision, commonly known as the Pregnancy Discrimination Act (“PDA”), states that women
affected by pregnancy, childbirth or related medical conditions shall be treated the same for all
employment-related purposes as other persons not so affected but similar in their ability or
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inability to work. Pregnancy is no longer a legal reason for refusing to hire, refusing to promote,
discharging, laying off, or failing to reinstate an otherwise qualified woman.
In the event that a woman is no longer able to perform her normal job functions as a result
of her pregnancy, her employer must treat her in the same manner as it treats any other employee
who is temporarily disabled for other reasons. Appendix to Part 1604 of Title 29 of the Code of
Federal Regulations. This does not mean that the PDA guarantees pregnant women a right to
work; it simply requires that pregnant employees and applicants be treated the same as similarly
situated employees and applicants affected by other conditions that impact their ability to work.
Id. For example, if an employer allows temporarily disabled workers to take time off for their
disabilities, then that employer must also allow pregnant workers to take time off for maternity
leave.
In International Union, United Auto, Aerospace and Agr. Implement Workers of America,
UAW v. Johnson, 499 U.S. 187 (1991), a class action lawsuit was brought against an employer
that prohibited fertile women from working in jobs that involved exposure to lead in amounts
exceeding the Occupational Safety and Health Administration standards. The United States
District Court for the Eastern District of Wisconsin granted summary judgment for the employer
and the Seventh Circuit affirmed. The United States Supreme Court reversed and remanded the
holding that the PDA forbids sex-specific fetal protection policies. The employer’s policy was
discriminatory on its face because it only affected the employment opportunities of women. The
court reasoned that if the employer informs its female employees of the risk, and the employer has
not acted negligently, the chances of the employer being liable in tort for fetal injuries is “remote
at best.”
Maternity Leave
Maternity leave is a form of disability or sick leave during which a female employee is
unable to work as a result of pregnancy, childbirth, or related medical conditions. Even a policy
prohibiting all forms of disability leave unless an employee has been employed for a set period of
time is illegal if it adversely affects female employees and is not justified by an overriding
business necessity. 29 C.F.R. § 1604.10(c).
Although some pregnant employees have the right to take time off for maternity leave,
they cannot be forced to do so. For example, an employer cannot force a female employee to
begin her maternity leave during her second trimester of pregnancy. The PDA also prohibits
employers from forcing women to take unwanted maternity leaves. Somers v. Aldine Independent
School District, 464 F.Supp. 900 (S.D.Tex. 1979). In Somers, a school policy required pregnant
employees to take mandatory maternity leaves following their third month of pregnancy. The
court held that the school’s policy violated the PDA.
Once an employee returns to work after maternity leave, her employer cannot deprive her
of any previously accumulated seniority. Female employees are entitled to the same seniority
crediting during maternity leave that similarly situated employees receive during other leaves of
absence. Nashville Gas v. Satty, 434 US 136 (1977). The rationale behind this rule is that a
policy is illegal if it has an adverse impact on female employees and is not justified by business
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necessity. As such, seniority crediting should be calculated differently depending on whether a
woman is taking time off based on physical inability or based on non-physical voluntary reasons.
To the extent that a maternity leave is based on a physical inability to work, a woman
should receive the same seniority crediting that she would receive for any other type of disability
leave. To the extent that a maternity leave is based on non-physical, voluntary reasons, a woman
should receive the same crediting that she would receive for taking a leave of absence for nonphysical, voluntary reasons.
Disability Benefits
The PDA does not require employers to pay disability benefits to women during maternity
leave unless the employer already has a disability or sick leave benefit program in place. If there
is no program in place, a pregnant employee is not entitled to disability benefits.
The Supreme Court addressed disability benefits under the PDA in AT&T Corporation v.
Hulteen, 556 U.S. 701 (2009). In AT&T Corporation, a group of female employees and their
union brought a Title VII claim against their employer, alleging sex and pregnancy discrimination
in connection with the calculation of their pension benefits. In 1968, prior to the enactment of
the PDA, the female employees received fewer pension credits during their maternity leaves than
similarly situated employees did during other medical-related leaves of absence. Although the
employer’s calculation of pension benefits would clearly violate the PDA today, the PDA did not
exist at the time of the employer’s conduct in 1968. The Court held that the PDA could not be
applied retroactively to the employer’s conduct. Thus, employers do not have to fear liability
under the PDA for conduct that occurred prior to the enactment of the PDA.
In Newport News Shipbuilding and Dry Dock Co. v. E.E.O.C., 462 U.S. 669 (1983), a
male employee filed an EEOC claim because his employer’s insurance company did not provide
full benefits when his wife was hospitalized as a result of her pregnancy. The male employee
argued that his employer was violating the PDA by providing full pregnancy insurance benefits to
female employees and not to the wives of male employees. The Supreme Court held that the
employer’s conduct in providing more extensive pregnancy benefits for female employees
violated the PDA. As such, the PDA requires that wives of male employees receive the same
insurance coverage as female employees.
Paternity Leave
The PDA’s rules relating to maternity leave are based on a pregnant employee’s physical
inability to work as a result of pregnancy, childbirth or other related conditions, and thus,
expectant fathers are not necessarily entitled to paternity leave. As such, expecting fathers do not
have the same rights under the PDA to paternity leave. However, if an employer allows extended
maternity leave beyond the period of disability for female employees to care for their newborn
children, those employers cannot deny paternity leave to male employees for similar purposes.
Making accommodations for only female employees to spend time at home with their newborn
would amount to sexual discrimination against men. Byrd v. Unified School District No. 1 of
Racine, 453 F.Supp. 621 (E.D. Wis. 1978).
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Marital Status
Additionally, under the Act, employers cannot take action against a pregnant woman on
the basis of her marital status. Even a facially neutral policy prohibiting both women and men
from having children outside of marriage violates the Act because unwed motherhood cannot be
discovered as easily as unwed fatherhood. See Jacobs v. Martin Sweets Co., Inc., 550 F.2d 364
(6th Cir. 1977), cert. denied, 431 U.S. 917 (1977). In Jacobs, a pregnant employee was
transferred from her job as secretary for the Senior Vice President of a company to an inferior
clerical position in the purchasing department based on her pregnancy outside of marriage. The
court held that the company’s actions amounted to constructive termination of the employee on
the basis of her pregnancy in violation of Title VII. The court rejected the company’s argument
that the employee failed to show that male employees were treated any differently. The court
explained that pregnancy is a condition unique to women and, thus, it was not necessary to show
that men were treated differently.
In Strickland v. Prime Care, 108 F.Supp.2d 1329 (M.D. Ala. 2000), the court refused to
grant summary judgment because fact issues remained as to whether employer’s decision to
terminate unmarried, pregnant employee was due to violation of work rules or to discriminatory
animus toward unmarried, pregnant women.
In Hargett v. Delta Automotive, Inc. 765 F.Supp. 1487 (N.D. Ala. 1991), a telephone sales
associate for a car dealership filed an action against the dealership, alleging that she was
discharged because of her out-of-wedlock pregnancy in violation of the PDA. The dealership
attempted to defend its employment decision on the grounds that it fired the employee for
violating the unwritten company policy of acting “ladylike” when she became pregnant out of
wedlock by one of the dealership’s customers. The District Court held that the employee
established that her pregnancy was a factor in the dealership’s decision to fire her and thus, her
discharge violated the Act, notwithstanding the employer’s allegation of legitimate nonpregnancy reasons for termination.
Likewise, in Avery v. Homewood City Bd. of Ed., 674 F.2d 337 (5th Cir. 1982), the Fifth
Circuit held that the plaintiff, an elementary school teacher who became pregnant out of wedlock,
carried her initial burden of showing that her conduct was constitutionally protected and was a
substantial or motivating factor in school board’s decision to discharge her. Based on this, the
Circuit Court held that the lower court should have determined whether the defendants proved by
a preponderance of the evidence that they would have discharged the plaintiff even in the absence
of her out-of-wedlock pregnancy. Thus, it was erroneous for the lower court to simply hold that
the legitimate nondiscriminatory reason for the plaintiff’s termination rendered the school board’s
decision lawful.
However, a contrary result was reached in Chambers v. Omaha Girls Club, Inc., 834 F.2d
697 (8th Cir.1987), based on Title VII’s Bona Fide Occupational Qualification (“BFOQ”)
exception. In Chambers, the 8th Circuit upheld a private, nonprofit girls club’s personnel “role
model rule” which banned single-parent pregnancies among its staff members. The club was
founded to “assist young girls between the ages of eight and eighteen to maximize their life
opportunities.” The club counselors were to develop close contacts and strong relationships with
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the member girls, and they were trained and expected to act as role models in the hope and
expectation that the girls would emulate the counselors’ behavior. In essence, their function was
to act as role models for young girls. Therefore, the Court held that the employer’s prohibition of
out-of-wedlock pregnancies was a valid BFOQ.
Abortion
The PDA applies to all situations in which women are “affected by pregnancy, childbirth,
and related medical conditions.” Based on this, the Third Circuit has construed the PDA to cover
women who have abortions. Doe v. C.A.R.S. Protection Plus, Inc., 527 F.3d 358 (3rd Cir. 2008),
cert. denied, 129 S. Ct. 576 (2008). In C.A.R.S., the plaintiff sued her employer, alleging that she
had been fired in violation of the PDA for having an abortion. Shortly after the plaintiff informed
her employer of her pregnancy, the plaintiff’s doctor informed her that her baby had multiple
deformities and that she should terminate the pregnancy. Three days later, on the day of her
baby’s funeral, the plaintiff was informed that she was being terminated from her job. The
employer argued that the plaintiff had been fired for abandoning her job; however, the plaintiff
argued that her husband had called the office and received consent for the plaintiff to take time off
of work. The court held that the plaintiff had established a prima facie case of pregnancy
discrimination, precluding summary judgment in favor of the employer on the issue of whether it
had fired the plaintiff on the basis of her abortion.
Courts have been reluctant to address the interplay between Title VII’s prohibition against
sex discrimination and an employer’s adverse employment action on the basis of an employee’s
abortion. Therefore, employers must consult the law of their particular jurisdiction before taking
any action against employees who choose to have an abortion. In addition, there may be certain
exemptions for religious employers, depending on the circumstances and whether the religious
mission has been consistently applied.
Fringe Benefits
The PDA also applies to the receipt of benefits under fringe benefits program. It does not
require an employer to pay for health insurance benefits for abortion, except where the life of the
mother would be endangered if the fetus were carried to term, or where medical complications
have arisen from an abortion. An employer is not, however, precluded from providing abortion
benefits and may enter into bargaining agreements with respect to abortion. 42 U.S.C. §2000e (k).
In 2000, the EEOC issued a decision finding that certain employers were in violation of
Title VII for failing to provide insurance coverage for prescription contraceptives. The EEOC
relied on the Supreme Court’s decision in Int’l Union, UAW v. Johnson Controls, 499 U.S. 187
(1991) and found that exclusion of contraceptives from coverage violated the PDA due to the fact
that the PDA protects women from discrimination because they have the ability to become
pregnant, not just because they are already pregnant. The EEOC found that contraceptives are a
means by which women can control the ability to become pregnant. The PDA does not require
that all employers provide insurance coverage for contraceptives. It does require, however, that
employers provide the same insurance coverage for prescription contraceptives that they do for
other drugs, devices, or services that are used to prevent the occurrence of medical conditions
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other than pregnancy. For example, if a health plan covers vaccinations, medications to control
blood pressure or cholesterol levels, and preventative dental care, then the plan must also cover
contraceptives.
Breastfeeding
One court refused to afford special protections under Title VII to mothers who breastfeed
their infants. Martinez v. N.B.C., 49 F.Supp.2d 305 (S.D.N.Y. 1999). The court held that the
employer’s failure to accommodate female employees who are breastfeeding does not constitute
sex discrimination under Title VII. In dismissing the claim, the court held that it is impossible for
a plaintiff to show that she was treated less favorably than similarly situated men because men are
physiologically incapable of pumping breast milk. Further, it is not a violation of Title VII for an
employer to draw distinctions among individuals of one gender based on criteria unique to that
particular gender.
However, in a matter of first impression, the Fifth Circuit recently held that lactation is a
related medical condition of pregnancy for purposes of the PDA, and that an adverse employment
action against a female employee because she was lactating or expressing milk constituted sex
discrimination in violation of Title VII. E.E.O.C. v. Houston Funding II, Ltd., 717 F.3d 425, (5th
2013).
Preemption
In California Federal Savings and Loan Ass’n. v. Guerra, 479 U.S. 272 (1987), a
federally chartered savings and loan association filed for a declaratory judgment that the
California Fair Housing and Employment Act (FHEA), a California law mandating paid maternity
leave and post-maternity leave reinstatement, was preempted by the PDA. The action was filed
in response to a pending FHEA case filed by one of the savings and loan association’s
receptionists, whose job had been replaced while she was on maternity leave. The United States
Supreme Court held that Congress intended the PDA to be “a floor beneath which pregnancy
disability benefits may not drop – not a ceiling above which they may not rise.” Thus, the
California statute requiring benefits that went above and beyond the PDA was not inconsistent
with or preempted by the PDA.
AFFIRMATIVE ACTION
In 2003, the United States Supreme Court issued two decisions regarding the issue of
whether affirmative action programs result in violations of Title VII by discriminating against
individuals on the basis of race. Generally, courts will apply a “strict scrutiny test” to challenged
actions involving purposeful discrimination on the basis of race. This test requires the party
implementing the conduct to show that the discrimination: (1) serves a compelling state interest;
and (2) is narrowly tailored or the least restrictive means of accomplishing this interest.
First, in Gratz v. Bollinger, 539 U.S. 244 (2003), the Court held there are situations where
it may be legal to discriminate for the purpose of promoting diversity; however, the court did not
find the circumstances of Gratz to be one of those situations. In Gratz, the petitioners were
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Caucasian applicants to the University of Michigan’s undergraduate program who were denied
admission on the basis of guidelines that awarded points to applicants of certain minority status.
Under the University’s policy, Hispanics, African-Americans and Native Americans were
considered “underrepresented minorities,” and applicants from these groups were awarded an
automatic 20 points. As a result of this system, almost all of the qualified applicants of one of the
“underrepresented minority” groups were admitted to the University, while large numbers of
qualified non-minorities were denied admission. Petitioners filed suit, claiming that the University
violated the Equal Protection Clause of the Fourteenth Amendment and Title VII. While the
court held that it is indeed possible to discriminate for the purpose of promoting diversity, the
court did not believe that the University’s system was narrowly tailored to promote the
compelling state interest of promoting diversity. The court reasoned that the admission system
nearly guaranteed admission to applicants of the “underrepresented minority” groups. Based on
this, the court held that the University’s admission system violated Title VII.
In Grutter v. Bollinger, 539 U.S. 306 (2003), the court held that the policy of promoting
diversity within the student body was a compelling interest and was narrowly tailored because it
did not “insulate each category of applicants with certain desired qualifications from competition
with all other applicants.” Grutter involved Caucasian applicants to the University of Michigan’s
Law School who challenged the University’s admission policy after being denied admission. The
admission policy considered each applicant’s academic ability with flexible considerations of
talent, potential and experiences. The goal of the admissions policy was to achieve “racial and
ethnic diversity with special reference to the inclusion of students from groups which have been
historically discriminated against, like African-Americans, Hispanics and Native Americans, who
without this commitment might not be represented in our student body in meaningful numbers.”
Because the admissions policy considered race as a “plus in a particular applicant’s file without
insulating the individual from comparison with all other candidates,” the Court upheld the policy.
However, in Fisher v. University of Texas, the Supreme Court reversed and remanded a
district court for applying the strict scrutiny inquiry in too narrow of a way by deferring to the
University's good faith in its use of racial classifications and affirming the grant of summary
judgment on that basis. 133 S.Ct. 2411 (2013) The Court vacated the judgment, and held that
fairness to the litigants required that it be remanded so that the admissions process can be
considered and judged under a correct analysis. The Court further stated that simple assurances of
good intention are not enough and that the lower court must assess whether the University offered
sufficient evidence to provide that its admissions program is narrowly tailored to obtain the
educational benefits of diversity. Id. at 2421.
Although these cases do not directly involve employment issues, the Court’s holdings
concerning affirmative action programs are equally applicable to employers’ affirmative action
and equal opportunity policies. Based on the Court’s holdings, if an employer elects to implement
an affirmative action program, it is recommended that the employer consider an applicant’s race
as a flexible factor among several factors considered – a mere “thumb on the scale.” If an
employer uses a rigid system based on certain quotas, percentages or points, it is likely that the
affirmative action program will be held to violate Title VII.
RELIGIOUS DISCRIMINATION
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Title VII protects workers from employment discrimination based on their religion, in
addition to other categories. Title VII also requires reasonable accommodation of employees’
sincerely held religious beliefs, observances, and practices when requested, unless
accommodation would impose an undue hardship on business operations. The prohibition on
discrimination and the requirement of reasonable accommodation apply whether the religious
views in question are mainstream or non-traditional, and even if not recognized by any organized
religion. These protections also extend to those who profess no religious beliefs.
Coverage
With respect to religion, Title VII prohibits covered employers from:
•
treating applicants or employees differently based on their religious beliefs or
practices, or lack thereof, in any aspect of employment, including recruitment, hiring,
assignments, discipline, promotion, and benefits;
•
forcing employees to participate in religious activities;
•
subjecting employees to harassment because of their religious beliefs or practices, or
lack thereof, or because of the religious practices or beliefs of people with whom they
associate;
•
treating employees differently based on their spouses’ religious beliefs;
•
making offensive remarks about an employee’s religious beliefs or practices;
•
denying a requested reasonable accommodation of an applicant’s or employee’s
sincerely held religious beliefs or practices, or lack thereof, if an accommodation will
not impose an undue hardship on the conduct of the business; and
•
retaliating against an applicant or employee who has engaged in protected activity,
including participation in a discrimination investigation (i.e. filing an EEO charge or
testifying as a witness in someone else’s EEO matter), or opposition to alleged
religious discrimination (i.e. complaining to the human resources department about
alleged religious discrimination).
Definition of “Religion”
Title VII defines “religion” to include “all aspects of religious observance and practice as
well as belief.” Religion includes not only traditional, organized religions such as Christianity,
Judaism, Islam, Hinduism, and Buddhism, but also religious beliefs that are new, uncommon, not
part of a formal church or sect, only subscribed to by a small number of people, or that seem
illogical or unreasonable to others. Further, a person’s religious beliefs “need not be confined in
either source or content to traditional or parochial concepts of religion.”
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Religious beliefs include theistic beliefs as well as non-theistic “moral or ethical beliefs as
to what is right and wrong which are sincerely held with the strength of traditional religious
views.” Although courts generally resolve doubts about particular beliefs in favor of finding that
they are religious, beliefs are not protected merely because they are strongly held. Rather,
religion typically concerns “ultimate ideas” about “life, purpose, and death.” Social, political, or
economic philosophies, as well as mere personal preferences, are not “religious” beliefs protected
by Title VII
Sincerely Held Beliefs
Title VII requires employers to accommodate only those religious beliefs that are
“sincerely held.” Therefore, whether or not a religious belief is “sincerely held” by an applicant or
employee is only relevant to religious accommodation, not to claims of disparate treatment or
harassment because of religion.
Like the “religious” nature of a belief or practice, the “sincerity” of an employee’s stated
religious belief is usually not in dispute. Nevertheless, there are some circumstances in which an
employer may assert as a defense that it was not required to provide accommodation because the
employee’s asserted religious belief was not sincerely held. However, an employer should not
assume that an employee is insincere simply because some of his or her practices deviate from the
commonly followed tenets of his or her religion.
Employer Inquiries into Religious Nature or Sincerity of Belief
The definition of religion is broad and protects beliefs and practices with which the
employer may be unfamiliar. Therefore, an employer should ordinarily assume that an
employee’s request for religious accommodation is based on a sincerely held religious belief.
However, if an employee requests a religious accommodation and an employer has an objective
basis for questioning either the religious nature or the sincerity of a particular belief or practice,
the employer would be justified in seeking additional supporting information.
Reasonable Accommodations
Once on notice of the conflict, Title VII requires an employer to reasonably accommodate
an employee who’s sincerely held religious belief, practice, or observance conflicts with a work
requirement, unless providing the accommodation would create an undue hardship. A reasonable
religious accommodation is any adjustment to the work environment that will allow the employee
to comply with his or her religious beliefs.
Notice of Conflict
In order for an employer to provide reasonable accommodations, the employee’s religious
beliefs must conflict with an employment requirement, and the employer must be informed of the
conflict. Ansonia Board of Education v. Philbrook, 479 U.S. 60 (1986); 29 CFR §1605. Indeed,
an applicant or employee who seeks religious accommodation must make the employer aware
both of the need for accommodation and that it is being requested due to a conflict between
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religion and work. No “magic words” are required to place an employer on notice of an
applicant’s or employee’s conflict between religious needs and a work requirement. When
requesting an accommodation, an individual may use plain language and need not mention any
particular terms such as “Title VII” or “religious accommodation.” Nevertheless, the applicant or
employee must provide enough information to make the employer aware that a conflict exists
between the individual’s religious practice or belief and a requirement for applying for or
performing the job.
In Adeyeye v. Heartland Sweeteners, LLC, 721 F.3d 444 (7th Cir. 2013), the Seventh
Circuit overturned the lower court’s granting of summary judgment on the issue of whether
plaintiff’s two written requests for unpaid leave provided notice of a religious nature. Plaintiff
asserted that his requests for unpaid leave were motivated by his genuine, sincerely held religious
beliefs that he had to perform his father’s burial rites in Nigeria. He was fired when he missed
work to perform the rites.
The Seventh Circuit held that an employee who wants to invoke an employer’s duty to
accommodate his religion under Title VII must give fair notice of the need for accommodation
and the religious nature of the conflict. Although religion is not necessarily immediately apparent
to others, and employers are not charged with detailed knowledge of beliefs associated with
different sects, an employer cannot shield itself from liability by intentionally remaining ignorant.
Id. at 449-450.
An employee is not required to adhere to a rigid script to satisfy notice, and is to be
construed liberally in favor of employee protection. Id. The request must be reasonably clear to
alert the employer that it is motivated by religious belief, and the employer must be alert enough
to grasp the religious nature of the request. If the employer is not certain, managers are entitled to
ask the employee to clarify the nature of the request. Id. (finding that a reasonable jury could find
there was sufficient notice of a religious request, and that the employer should have asked
plaintiff to clarify the nature of the funeral if necessary).
The EEOC has identified the following practices as examples of areas where employers
commonly fail to reasonably accommodate religious beliefs and practices:
•
•
•
•
•
•
•
Observance of a Sabbath or religious holiday;
Prayer breaks during work hours;
Dietary requirements;
Taking days off during a mourning period for a deceased relative;
Prohibitions against medical examinations;
Prohibitions against membership in labor or other organizations; and
Dress and personal grooming practices (29 CFR §1605, Appx. A).
What is a “Reasonable” Accommodation?
When determining whether a religious accommodation is reasonable, a court will examine
the alternatives considered by the employer and offered to the individual. Ultimately,
reasonableness is a fact-specific determination. “The reasonableness of an employer’s attempt at
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accommodation cannot be determined in a vacuum. Instead, it must be determined on a
case-by-case basis; what may be a reasonable accommodation for one employee may not be
reasonable for another . . . . The term ‘reasonable accommodation’ is a relative term and cannot
be given a hard and fast meaning; each case . . . necessarily depends upon its own facts and
circumstances, and comes down to a determination of ‘reasonableness’ under the unique
circumstances of the individual employer-employee relationship.” Smith v. Pyro Mining Co., 827
F.2d 1081, 1085 (6th Cir. 1987), cert. denied, 485 U.S. 989 (1988) (internal quotations omitted.)
Some examples of reasonable accommodations include schedule swapping, flexible
scheduling, lateral transfers, and changing job assignments. Courts have held the following
practices to constitute reasonable accommodations:
•
Allowing a teacher to take unpaid absences so that the teacher could observe six holy
days mandated by his religion during the school year. Ansonia Bd. of Education v.
Philbrook, 479 U.S. 60 (1986). See also EEOC v. Bridgestone/Firestone, Inc., 95
F.Supp.2d 913 (C.D. Ill. 2000) (concluding that the employer’s offer of an unpaid
leave of absence or a transfer to lesser-paying position constituted a reasonable
accommodation for the employee’s religious beliefs where, under the circumstances,
other proposed accommodations would have imposed an undue hardship on the
employer).
•
Permitting a police officer to wear a cross ring or bracelet instead of a cross pin, where
wearing a pin would violate city code. Daniels v. City of Arlington, Tex., 246 F.3d
500 (5th Cir. 2001), cert. denied, 534 U.S. 951 (2001).
•
Permitting an employee to use the phrase “Have a Blessed Day” with her co-workers,
while prohibiting her from including the phrase in her written correspondence with
company customers. Anderson v. U.S.F. Logistics (IMC), Inc., 274 F.3d 470 (7th Cir.
2001).
•
Transferring a nurse to the newborn intensive care unit in response to her informing
the hospital that her religious beliefs prevented her from assisting in emergency
procedures terminating pregnancies. Shelton v. Univ.y of Med. & Dentistry of N.J.,
223 F.3d 220 (3d Cir. 2000).
•
Permitting a postal carrier who refused to work Saturdays due to his religious beliefs,
to take leave on Saturdays, to use substitutes, and recommending that he bid on a
position that would provide for Saturdays off. Thomas v. Nat’l Ass’n of Letter
Carriers, 225 F.3d 1149 (10th Cir. 2000).
•
Allowing a Native American student to wear his hair visibly long, in accordance with
his religious beliefs, notwithstanding the school’s hygiene policy. A.A. ex rel.
Betenbaugh v. Needville Indep. School Dist., 611 F.3d 248 (5th Cir. 2010) (explaining
that the school’s grooming policy that the student either wear his hair in a bun on top
of his head or in a braid tucked into his shirt, was not a sufficient accommodation
because the school’s interests in teaching hygiene, preventing disruption, and avoiding
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safety hazards were not sufficiently compelling interests to justify burdening the
student’s religious beliefs.).
Recently, in Porter v. City of Chicago, No. 11-2006 (Nov. 8, 2012), the Seventh Circuit
affirmed the district court’s finding that the employee was offered reasonable accommodations
for her religious needs by the city. In that case, the plaintiff was a senior data entry specialist for
the Chicago Police Department's records department. The plaintiff, who identified herself as
Christian, attends church services, Bible studies and prayer services every Sunday as well as
church related events on Tuesday, Wednesday and Friday nights. It was undisputed that church
services were held at three different times on Sunday.
Based on the needs of her division, the plaintiff’s days off were switched from Sunday and
Monday to Friday and Saturday. She requested to be switched back to the group with Sundays
and Mondays off as an accommodation so that she could attend church services on Sunday. The
city declined her request, but instead offered to change Porter to a later watch on Sundays, which
would allow her to attend the earlier services.
The Seventh Circuit agreed with the district court that the city attempted to reasonably
accommodate the employee by offering to change her shift time on Sundays. The court held that
the offer to assign the employee to a later shift on Sunday was sufficient accommodation for
purposes of Title VII where the assignment would allow her to attend morning church services
without affecting her pay or benefits. The Court cited the Supreme Court decision in Ansonia v.
Bd. Of Educ. v. Philbrook, 479 U.S. 60 (1986) and held that Title VII is meant to ensure that an
individual can observe religious practices, but is not meant to mandate an employer to grant every
accommodation at all costs.
The Seventh Circuit’s holding specifically cites the Supreme Court’s decision in
Philbrook, where the Court held that the accommodation need not be the employee’s preferred
accommodation, but only needs to reasonably “eliminate the conflict between employment
requirements and religious practices.”
Moreover, the Seventh Circuit reiterated that the act of offering an accommodation is
sufficient if it would reasonably cure the conflict between the employment and religious practice,
regardless of whether the employee actually accepts the offer.
Undue Hardships
An accommodation poses an undue hardship upon an employer if the employer would
have to bear “more than a de minimis cost” in order to accommodate an employee’s religious
practices. This is a far lower standard for an employer to meet than undue hardship under the
Americans with Disabilities Act, which is defined in that statute as “significant difficulty or
expense.”
In determining whether there is more than a di minimis cost, courts generally consider: (1)
the cost to the employer; (2) the relation of that cost to the operating costs of the employer; (3) the
employer’s financial resources; and (4) the number of individuals who will need a particular
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accommodation. Generally, a cost equivalent to the regular payment of premium wages for
substitute employee(s) will constitute undue hardship. Trans World Airlines v. Hardison, 432 U.S.
63 (1977). Undue hardship can also be shown when variance from a bona fide seniority system is
necessary in order to accommodate. 29 CFR §1605.2.
Courts have determined that employers have been justified in denying the following
requests for accommodation:
•
Employer, who operated employee assistance program, was not required to permit
employee to refuse to counsel clients who were homosexual on the basis of her
religious beliefs because this would require other counselors to assume a
disproportionate workload and/or to travel with the plaintiff to sessions to be available
in the event a problematic subject matter arose. Bruff v. N. Miss. Health Services,
Inc., 244 F.3d 495 (5th Cir. 2001), cert. denied, 534 U.S. 952 (2001).
•
Employer was not required to accommodate a truck driver’s religious beliefs where
the beliefs prevented him from making overnight runs with a female partner. Weber v.
Roadway Express, Inc., 199 F.3d 270 (5th Cir. 2000). To accommodate the
employee’s religious beliefs, the employer would have been required to “skip over”
the employee, which would have had an adverse impact on co-workers.
•
Employer was not required to provide paid time off for employee’s religious holidays
even though the employer gave paid time off for Christmas and Good Friday. Ansonia
Bd. of Edu. v. Philbrook, 479 U.S. 60 (1986).
One court held that an employer did not violate Title VII for terminating an employee
because he refused to remove controversial biblical passages posted in his cubicle in protest of a
company poster with a gay employee to support diversity. Peterson v. Hewlett-Packard Co., 358
F.3d 599 (9th Cir. 2004). The posted passages were interpreted as homophobic. The court held
that the employee was terminated not because of his religious beliefs, but rather because he
violated the company’s harassment policy by “attempting to generate a hostile and intolerant
work environment.”
An Illinois Appellate Court, relying on federal Title VII law in interpreting the Illinois
Human Rights Act, recently applied the “minimal hardship” test to determine undue hardship to
the employer or other employees. Robinson v. Village of Oak Park, 990 NE.2d 251 (1st Dist.
2013). The Robinson court found that plaintiff’s proposed accommodation, which was to place
plaintiff in a position where her inability to perform functions of the job could result in violations
of the collective bargaining agreement, was not reasonable. In addition, any accommodation that
requires other employees to assume part of the plaintiff’s workload and divert them from their
regularly assigned duties is an undue hardship as a matter of law.
Employers also do not have an obligation to try out any proposed accommodations before
deciding they impose undue hardship. Id. at *38. The state of the law is that an employer may
establish undue hardship without putting an accommodation into effect. Id. (finding that a
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defendant is under no obligation to rearrange staffing and take on costs to accommodate an
inflexible employee).
EXEMPTIONS FOR RELIGIOUS ORGANIZATIONS
Section 702 of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-1, exempts religious
organizations from Title VII’s prohibition against discrimination in employment on the basis of
religion.
Section 702 provides in relevant part:
This subchapter shall not apply … to a religious corporation,
association, educational institution, or society with respect to the
employment of individuals of a particular religion to perform work
connected with the carrying on by such corporation, association,
educational institution, or society of its activities.
42 U.S.C. § 2000e-1(a). Likewise, the Act provides:
[I]t shall not be an unlawful employment practice for a school,
college, university, or other educational institution or institution of
learning to hire and employ employees of a particular religion if
such school, college, university, or other educational institution or
institution of learning is, in whole or in substantial part, owned,
supported, controlled, or managed by a particular religion or by a
particular religious corporation, association, or society, or if the
curriculum of such school, college, university, or other educational
institution or institution of learning is directed toward the
propagation of a particular religion.
42 U.S.C. §2000e-2(e)(2).
These exemptions are rooted in the free exercise clause of the First Amendment of the
Constitution. “This basic freedom is guaranteed not only to individuals but also to churches in
their collective capacities, which must have ‘power to decide for themselves, free from state
interference, matters of church government as well as those of faith and doctrine.’” Little v.
Wuerl, 929 F.2d 944 (3rd Cir. 1991) (citing Kedroff v. St. Nicholas Cathedral, 344 U.S. 94
(1952)).
Scope of Exemption
The scope of the exemption extends to both religious and non-religious activities of
religious organizations. The U.S. Supreme Court examined the constitutionality of the exemption
as applied to the non-religious activities of religious organizations in Corporation of Presiding
Bishop of Church of Jesus Christ of Latter-day Saints v. Amos, 483 U.S. 327 (1987). Specifically,
the Court addressed the question of whether a gymnasium owned by a religious organization
could terminate the employment of a building engineer for failing to conduct himself in
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accordance with the organization’s religious beliefs and values. The Court’s answer to that
question, in short, was yes.
In Amos, a nonprofit gymnasium owned and operated by a religious organization
associated with the Church of Latter-day Saints (also known as the Mormon Church), terminated
the 16-year employment of a building engineer based on his failure to qualify for a “temple
recommend,” or certificate showing that he is a member of the Church and eligible to attend
temples. Temple recommends were only issued to individuals who observed the Church’s
standards in such matters as attendance, tithing, and abstinence from coffee, tea, alcohol, and
tobacco. The building engineer, on behalf of a class of plaintiffs, filed a lawsuit against the
religious organization, alleging discrimination on the basis of religion in violation of Title VII.
The religious organization moved to dismiss on the basis of Section 702’s exemption for religious
organizations. The plaintiff argued that application of the exemption to the termination of his nonreligious job as a building engineer would violate the establishment clause and free exercise
clause of the First Amendment. As such, the Court addressed the interplay between (1) Title
VII’s exemption for religious organizations, (2) the First Amendment’s establishment clause, and
(3) the First Amendment’s free exercise clause. The First Amendment’s establishment and free
exercise clauses together read: “Congress shall make no law respecting an establishment of
religion, or prohibiting the free exercise thereof.”
The Court held that “there is ample room under the establishment clause for ‘benevolent
neutrality which will permit religious exercise without sponsorship and without interference.’”
Id. at 334. In other words, the exemption is not only constitutionally valid under the
establishment clause, it is constitutionally necessary to protect the free exercise rights of religious
organizations.
In his concurring opinion, Justice Brennan explained that even though the exemption
infringes on the free exercise rights of employees of religious organizations by putting them to the
choice of “either conforming to certain religious tenants or losing a job opportunity, a promotion,
or, as in these cases, employment itself…. [R]eligious organizations have an interest in autonomy
in ordering their internal affairs.” And, the interests of religious organizations “must be protected
by the Free Exercise Clause.” Id. at 341-42. Furthermore, a case-by-case analysis of whether an
employee’s position is religious or secular would inherently violate the free exercise rights of
religious organizations. However, Justice O’Connor cautioned in her concurring opinion that the
issue of whether the exemption is constitutional as applied to for-profit activities of religious
organizations remains open. Id. at 349.
After the Supreme Court’s decision in Amos, the exemption was applied in EEOC v.
Presbyterian Ministries, Inc., 788 F.Supp. 1154 (W.D. Wash. 1992). As such, a Christian
retirement home was permitted to prohibit a Muslim receptionist from wearing a head covering to
work, notwithstanding the fact that it never made any inquiries about her religion when it decided
to hire her. The court reasoned that just because the home did not actively inquire into the
employee’s religion prior to employment did not mean that she could subsequently begin to assert
a non-Christian religious belief in a manner deemed inappropriate by the home.
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Likewise, in Saeemodarae v. Mercy Health Services, 456 F.Supp.2d 1021 (N.D. Iowa,
2006), a telemetry technician was fired by a Catholic hospital for practicing Wicca. The
technician filed a lawsuit against the hospital pursuant to Title VII and argued that her religious
beliefs had nothing to do with her secular job at the hospital. Nevertheless, the court granted the
hospital’s motion for summary judgment because, as a religious organization, the hospital’s
termination decisions were exempt from religious discrimination lawsuits brought under Title
VII.
Moreover, the court in Hopkins v. Women’s Div. General. Bd. of Global Ministries, 238
F.Supp.2d 174 (D.D.C. 2002), held that religious discrimination claims against religious entities
are barred with respect to the entire realm of the employment arena and not just the actual hiring
of individuals. In Hopkins, an office secretary employed by a Methodist organization was fired
for insubordination after refusing to participate in certain religious activities within the
organization. The secretary filed a lawsuit against the organization pursuant to Title VII, arguing
that religious organizations are only exempt from Title VII claims arising out of discrimination
during the hiring stage. The court disagreed and held that religious organizations are exempt
from discrimination claims with respect to the entire realm of employment and not just the hiring
stage.
Again, the exemption for religious institutions is consistent with each religious
institution’s right to free exercise, as provided by the First Amendment to the U.S. Constitution.
As such, an employer cannot waive the privilege of the exemption under Title VII, such as with a
statement that it is an equal opportunity employer. Hall v. Baptist Mem’l Health Care Corp., 27
F.Supp.2d 1029 (W.D. Tenn. 1998), aff’d, 215 F.3d 618 (6th Cir. 2000).
In Hall, a terminated employee brought a Title VII suit against a Baptist college, alleging
that she was unlawfully terminated on the basis of her religion. The employee was a member of a
non-denominational church that accepted her as a lesbian. The Baptist college, however,
adamantly opposed homosexuality and, thus, terminated her employment. The court held, and the
Sixth Circuit affirmed, that the college was exempt from Title VII’s prohibition against
discrimination based on religion. Moreover, the court specifically held that the college did not
“waive” the exemption by holding itself out as an equal opportunity employer because:
The Title VII exemption is not a privilege which can be invoked or
waived at Defendant's discretion. Rather, the exemption represents
a Congressional decision to protect the free exercise of religion
under the First Amendment to the Constitution by minimizing
governmental intrusion upon religious organizations. In essence,
Congress has decided that the right to be free from religious
discrimination from religious organizations is outweighed by the
rights of those organizations to be free from government
intervention.
Hall v. Baptist Memorial Health Care Corp., 27 F.Supp.2d 1029, (W.D.Tenn.1998), aff’d, 215
F.3d 618 (6th Cir. 2000).
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Likewise, in Little v. Wuerl, 929 F.2d 944 (3rd Cir. 1991), the Third Circuit affirmed
summary judgment in a Catholic school’s favor after the school terminated the employment of a
non-Catholic employee for religious reasons. More specifically, a non-Catholic teacher was hired
to work in a Catholic school. Subsequently, she was fired for entering into a second marriage
without obtaining an annulment, as required by the Catholic Church. The teacher filed a lawsuit
against the school pursuant to Title VII and argued that the school waived its exemption from
Title VII by hiring a non-Catholic employee. The court rejected the teacher’s argument and held
that a religious group may discriminate based on religion with respect to all of its employment
practices. A religious organization does not “waive” this exemption simply by hiring individuals
from outside of the religion.
In Curay-Cramer v. Ursuline Academy of Wilmington, Delaware, Inc., 450 F.3d 130 (3d
Cir. 2006), a former teacher filed a discrimination lawsuit under Title VII when the Catholic
school for which she worked terminated her after she signed a pro-choice advertisement in the
local newspaper. The court held that the school’s decision to terminate the teacher was covered
by the Title VII exemption for religious organizations. The court went on to explain that an
evaluation of the teacher’s discrimination claim against the school would also violate the First
Amendment because it would entail judicial assessment of the relative severity of employee
repudiations of Catholic doctrine regarding “when life begins and the responsibility to preserve
life in utero.”
Most recently, in Kennedy v. St. Joseph’s Ministries, Inc., 657 F.3d 189 (4th Cir. 2011), a
nursing assistant employed by a Catholic nursing center filed an action, alleging claims under
Title VII for religious harassment, retaliatory discharge for complaining about religious
harassment, and discriminatory discharge on the basis of religion. While the Catholic nursing
center was granted summary judgment with respect to the discriminatory discharge claim on the
basis of the religious exemption, the lower court held that the Catholic nursing center could not
rely on the religious exemption to obtain summary judgment in its favor with respect to the
nursing assistant’s religious harassment and retaliation claims.
On appeal, the Catholic nursing center argued that the religious exemption makes clear
that Title VII does not apply to claims for religious harassment and retaliation against religious
organizations. The Court of Appeals for the Fourth Circuit agreed, finding that the lower court’s
determination that the term “employment” was synonymous with hiring and firing was too narrow
and incompatible with the actual language of the religious exemption. “Employment,” as used
throughout Title VII, covers a broader understanding of “employment” than mere hiring and
firing, and the nursing assistant’s harassment and retaliation claims, as well as the discharge
claim, arose from her employment. Accordingly, the lower court erred in denying the Catholic
nursing center’s motion for summary judgment on the harassment and retaliation claims. As a
result, the district court’s order was reversed and remanded with instructions to enter judgment in
favor of the Catholic nursing center.
Therefore, based on Amos and its progeny, religious organizations should be aware of the
following guidelines:
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•
Religious organizations can choose not to employ individuals who fail to
conduct themselves in accordance with their values and beliefs.
This was made clear by the Court in Amos when a janitor was lawfully fired for failing to
obtain a “temple recommend;” in Hall, when a college lawfully terminated the employment of an
employee for engaging homosexual conduct; and in Little when a Catholic school terminated the
employment of a teacher whose name was published in a pro-choice advertisement.
•
Religious institutions can set forth rules and policies that infringe on different
religious practices.
For example, in EEOC v. Presbyterian Ministries, Inc., 788 F.Supp. 1154 (W.D. Wash.
1992), a Catholic nursing center had the right to prohibit receptionist from wearing Islamic
headdress because it made residents and visitors feel uncomfortable. Moreover, in Wechsler v.
Orthodox Union, 2009 WL 29596 (S.D.N.Y.), a Jewish kosher certification agency had the right
to refuse to assign an employee to work on Fridays.
•
Religious institutions cannot discriminate on the basis of other protected
categories.
A major pitfall with respect to Title VII’s exemption for religious organizations is that
often what may seem like a case of protected discrimination on the basis of religion may also
amount to unlawful discrimination on other protected bases, such as sex, national origin,
pregnancy, or other categories protected by some state laws, such as homosexuality.
For example, in Vigars v. Valley Christian Center of Dublin, 805 F.Supp. 802 (N.D. Cal.
1992), a parochial school could not rely on the exemption when it terminated a teacher’s
employment on the basis of her out-of-wedlock pregnancy, even though sex outside of marriage
violated the school’s religious values, because the school’s actions may have amounted to
discrimination on the basis of pregnancy.
Likewise, in Ganzy v. Allen Christian School, 995 F.Supp. 340 (E.D.N.Y 1998), the
exemption did not apply with respect to an unmarried pregnant teacher’s Title VII claim alleging
her termination resulted from her pregnancy, because a genuine issue of material fact remained as
to whether the termination resulted from the teacher’s pregnancy or from the teacher violating the
school’s religious beliefs by engaging in premarital sexual activity.
In Cline v. Catholic Diocese of Toledo, 206 F.3d 651 (6th Cir. 2000), the Sixth Circuit
reiterated that courts have made clear that if the school’s purported “discrimination” is based on a
policy of preventing extramarital sexual activity which emanates from the religious and moral
precepts of the school, and if that policy is applied equally to its male and female employees, then
the school has not discriminated based on pregnancy in violation of Title VII. However, the court
refused to grant summary judgment for the Diocese because school officials had acknowledged
during depositions that the plaintiff’s pregnancy alone had signaled to them that she was engaged
in premarital sex, and that the school does not otherwise inquire as to whether men are engaged in
premarital sex.
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In contrast, the Eighth Circuit in Chambers v. Omaha Girls Club, Inc., 834 F.2d 697 (8th
Cir. 1987), upheld a private social club for girls’ termination of a pregnant, unmarried staff
member for violation of the club’s “role model rule.” The court found that the termination was
justified by business necessity because there was a manifest relationship between the club’s
fundamental purpose and the rule.
And, in Boyd v. Harding Academy of Memphis, 88 F.3d 410 (6th Cir. 1996), the court
ruled in favor of a religious school that terminated the employment of a pregnant, unwed
preschool teacher, finding that the school had a history of terminating both male and female
employees for engaging in extramarital sexual relationships in violation of school’s code of
conduct.
Qualifying as a Religious Organization
In order to qualify for the religious exemption, an institution must be able to show that its
“purpose and character are primarily religious.” Spencer v. World Vision, Inc., 570 F.Supp.2d
1279 (W.D. Wash. 2008), cert. denied, 2011 WL 4530150 (2011). The determination is to be
based on “[a]ll significant religious and secular characteristics.” Id. In making a determination as
to whether an organization could assert the exemption, the courts consider whether the entity:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
operates for profit;
produces a secular product;
states a religious purpose in its articles of incorporation or other pertinent
documents;
receives financial support from a formally religious entity such as a church or
synagogue;
is managed by a religious entity, for instance by having representatives on the
board of trustees;
holds itself out to the public as secular or sectarian;
includes prayer or other forms of worship in its activities;
includes religious instruction in its curriculum, to the extent that it is an
educational institution; or
includes co-religionist members.
Spencer v. World Vision, Inc., 570 F.Supp.2d 1279 (W.D. Wash. 2008), cert. denied, 2011 WL
4530150 (2011).
In Spencer, a non-profit Christian organization devoted to “aiding the world’s poorest
children and families” qualified as a “religious organization” for Title VII purposes. Other factors
considered by the court are whether the religious purpose for which the entity was created has
remained unchanged, the religion of the employees and any student body, and the nature of
student activities and curriculum, if applicable. EEOC v. Kamehameha, 990 F.2d 458 (9th Cir.
1992), cert. denied, 510 U.S. 963 (1993); EEOC Decision No. 83-6 (1983). No single factor
alone is determinative of whether an institution is “religious.” Rather, a totality of the
circumstances test will be applied. Killinger v. Samford Univ., 113 F.3d 196 (11th Cir. 1997).
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For-Profit Activities of Religious Organizations
Finally, one issue that remains unsettled is how the exemption applies to for-profit
activities of religious organizations. Again, in Amos, 483 U.S. 327 (1987), members of the Court
warned that it was not clear whether the exemption would be so broadly applied to for-profit
activities of religious organizations.
Case law has shown that a religious organization’s for-profit status at the very least
reduces the organization’s chances of obtaining the exemption. Although an organization’s forprofit status is not a complete bar, it is a factor taken into consideration when determining
whether the entity is sufficiently tied to religion for a Title VII exemption. In EEOC v. Townley
Engineering & Manufacturing Co., 859 F.2d 610 (9th Cir. 1988), cert denied, 489 U.S. 1077
(1989), the court addressed the issue of whether a for-profit corporation that manufactured mining
equipment qualified for a Title VII exemption based on the founders’ intention that their business
be a “Christian faith operated business.” The court stated that Congress “assumed that only those
institutions with extremely close ties to organized religions would be covered.” The court
announced a balancing test to determine whether a corporation’s purpose and character are
primarily religious. The court relied on (1) the corporation’s for-profit status; (2) the secular
nature of the product it manufactured; (3) its lack of affiliation or support from any church; and
(4) the absence of any explicit religious purpose to conclude that the business was primarily
secular and therefore not entitled to an exemption from Title VII.
Exemption for Educational Entities
In addition to the exemption for religious institutions, Section 702 provides:
[I]t shall not be an unlawful employment practice for a school,
college, university, or other educational institution or institution of
learning to hire and employ employees of a particular religion if
such school, college, university, or other educational institution or
institution of learning is, in whole or in substantial part, owned,
supported, controlled, or managed by a particular religion or by a
particular religious corporation, association, or society, or if the
curriculum of such school, college, university, or other educational
institution or institution of learning is directed toward the
propagation of a particular religion.
42 U.S.C. §2000e-2(e)(2).
According to the EEOC’s Compliance Manual, many of the same factors that are
considered when determining whether an organization is “religious” under the first exemption
also apply to analyzing the applicability of the particular defenses in this section. When
determining substantial ownership, control, and the additional factors articulated above,
considerations include the percentage of contributions received from a religious source, the
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entity’s founding sources, affiliations, and religious requirements for management bodies and
faculty.
Generally, the application of the curriculum exemption is determined by a fact-based
inquiry into the extent to which a school’s curriculum reflects an effort to spread and instill
particular religious beliefs. EEOC v. Kamehameha, 990 F.2d 458 (9th Cir. 1992), cert. denied,
510 U.S. 963 (1993). Factors for consideration include a review of course descriptions and
offerings for the three previous years and the percentage of faculty with training in the particular
religion. EEOC Compliance Manual 604:0030. In Kamehameha, the schools’ founder specified
that all teachers and trustees shall be Protestant. Even though religion was regularly taught, the
purpose and emphasis of the school’s mission had shifted over the years from providing religious
instruction to teaching ethical principles that enabled students to make their own moral
judgments. Consequently, the curriculum exemption was not applicable.
The EEOC considered the application of the educational entity and curriculum exemptions
in 1975 when a Jewish teacher charged a school with refusing to hire her based upon her religion.
The EEOC denied the charge, finding that the school qualified as a religious educational
institution as it was wholly owned, supported and controlled by its Christian church founder.
Furthermore, the propagation of Christian principles by the school’s teachers and the teachers’
participation in religious activities were central parts of what the school regarded as the
educational process and required of its teachers. Consequently, the school also met the curriculum
standard. EEOC Dec. P. 6553, 1975 WL 4483 (EEOC).
Likewise, in Killinger v. Samford University, 113 F.3d 196 (11th Cir. 1997), the exemption
allowed a University to terminate the employment of a professor within its divinity school
because his religious beliefs differed from those of the divinity school’s dean.
However, in Redhead v. Conference of Seventh Day Adventists, 566 F.Supp.2d 125
(E.D.N.Y. 2008), the exemption did not immunize a school from liability when it terminated a
teacher for violating its policy against sex outside of wedlock because it was also discriminating
against her on the basis of her pregnancy.
Ministerial Exception
In addition to the exemptions discussed above, employers should be aware of the
“ministerial exception.” The exception is based entirely on the First Amendment principle that
governmental regulation of church administration, including the appointment of clergy, impedes
the free exercise of religion and constitutes impermissible government entanglement with church
authority. Based on this, courts have refused to consider whether a church’s employment decision
concerning one of its ministers was based on discriminatory grounds. Nevertheless, some courts
have allowed ministers to bring sexual harassment claims.
In creating this exception, courts have held that clergy members cannot bring claims under
the federal employment discrimination laws, including Title VII, the Age Discrimination in
Employment Act, the Equal Pay Act, and the Americans with Disabilities Act, because “[t]he
relationship between an organized church and its ministers is its lifeblood.” McClure v. Salvation
Army, 460 F.2d 553, 558-60 (5th Cir. 1972), cert. denied, 409 U.S. 896 (1972).
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The ministerial exception applies only to those employees who perform essentially
religious functions. However, the exception is not limited to ordained clergy, and has been
applied by courts to others involved in clergy-like roles who conduct services or provide pastoral
counseling. Generally, such individuals include those whose primary duties consist of engaging
in church governance, supervising a religious order, or conducting religious ritual, worship, or
instruction.
In Geary v. Visitation of Blessed Virgin Mary Parish Sch., 7 F.3d 324 (3d Cir. 1993), the
court found that a lay teacher at church-operated elementary school was not a minister for
purposes of the exception. Similarly, in Dole v. Shenandoah Baptist Church, 899 F.2d 1389 (4th
Cir. 1990), cert denied, 498 U.S. 846 (1990), the court found that lay teachers at private religious
schools who performed no sacerdotal functions, did not serve as church governors, and belonged
to no clearly delineated religious order were not ministers, despite their sincere belief that their
organization is a ministry.
Furthermore, the exception does not necessarily apply to an employee simply because he
or she has a title typically conferred upon clergy (e.g., minister). Rather, in each case it is
necessary to make a factual determination of whether the function of the position is one to which
the exception applies.
Most recently, the Supreme Court held that churches and other religious groups must be
free to choose and dismiss their leaders without government interference. Hosanna-Tabor
Evangelical Lutheran Church and School v. E.E.O.C., 132 S. Ct. 694 (2012))
In that matter, a former teacher, Cheryl Perich, sued Hosanna-Tabor for allegedly
terminating her in violation of the Americans with Disabilities Act. Perich took a disability
related leave of absence from teaching while seeking treatment for narcolepsy. During her leave,
the Hosanna-Tabor congregation voted to offer her a “peaceful release” by paying a portion of her
health insurance premiums in exchange for her resignation. She declined, and reported for work
when released by her doctors. Upon reporting to work she was told she would likely be fired.
She reacted by threatening to file a lawsuit based upon the ADA. Perich was terminated the next
day for her “insubordination and disruptive behavior” and for “threatening to take legal action.”
In the legal action that followed, Hosanna-Tabor invoked the ministerial exception by
arguing that Perich’s lawsuit was barred by the First Amendment because her claims concerned
the employment relationship between a religious institution and one of its ministers. Id. In
holding that the ministerial exception applied, the Court held that the exception will not be limited
to the head of a religious congregation, but then refused to adopt any “rigid formula” for deciding
when someone is a “minister” or not. The Court provided only limited guidance to lower courts
regarding how to determine which employees are considered ministers under the exemption. The
Court considered several factors, including the “formal title given to Perich by the Church, the
substance reflected in that title, her own use of that title, and the important religious functions she
performed for the Church.” Id. Ultimately, the Court determined that “requiring the Church to
accept a minister it did not want” would have violated the First Amendment. Id.
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The following are additional examples of cases in which the ministerial exemption has
been applied:
•
In Rayburn v. Gen. Conf. of Seventh-Day Adventists, 772 F.2d 1164 (4th Cir. 1984),
cert. denied, 478 U.S. 1020 (1986), the ministerial exception was applied to an
associate pastor who had completed seminary training but was not ordained.
•
In EEOC v. Roman Catholic Diocese of Raleigh, 213 F.3d 795 (4th Cir. 2000), the
ministerial exception was applied to a cathedral’s music director, who was also
employed part-time as the music teacher.
•
In Starkman v. Evans, 198 F.3d 173 (5th Cir. 1999), cert. denied, 531 U.S. 814 (2000),
the court applied the ministerial exception to bar an ADA claim by church choir
director.
•
In Combs v. Central Texas Annual Conf. of United Methodist Church, 173 F.3d 343
(5th Cir. 1999), the court used the ministerial exception to bar a sex discrimination
claim because the court could not determine whether the employment decision
concerning a minister was based on legitimate or illegitimate grounds without entering
the constitutionally impermissible realm of internal church management.
•
In Alicea-Hernandez v. Catholic Bishop of Chicago, 320 F.3d 698 (7th Cir. 2003), the
court applied the ministerial exception to a communications director who was
responsible for crafting the church’s message to the Hispanic community.
•
In EEOC v. Catholic Univ. of America, 83 F.3d 455 (D.C. Cir. 1996), the court held
that the ministerial exception barred a Title VII sex discrimination claim brought by a
tenured member of a Catholic University’s department of religious canon law.
•
In Rweyemamu v. Cote, 520 F.3d 198 (2nd Cir. 2008), the court held that an African
American priest was barred from claiming that a Roman Catholic Diocese and Bishop
discriminated against him on the basis of race in violation of Title VII when they
denied him a requested promotion to parish administrator and subsequently terminated
him.
The Bona Fide Occupation Qualification Exemption
Title VII also provides that it is not an unlawful employment practice for an employer to
hire and employ employees on the basis of their religion, sex or national origin in those certain
instances where religion, sex, or national origin is a bona fide occupational qualification
(“BFOQ”) reasonably necessary to the normal operation of that particular business or enterprise.
42 U.S.C. §2000e-2(e)(1).
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Title VII permits employers to hire and employ employees on the basis of religion if
religion is “a bona fide occupational qualification (“BFOQ”) reasonably necessary to the normal
operation of that particular business or enterprise.”
However, because the “religious
organization” exemption in Title VII permits employers to prefer their co-religionists, religious
organizations do not typically need to rely on the BFOQ defense.
It is well-settled that for employers that are not religious organizations and therefore seek
to rely on the BFOQ defense to justify a religious preference, the defense is a narrow one and can
rarely be successfully invoked. In order for a religious requirement to be deemed a BFOQ, the
employee’s job must depend upon the characteristics of the institution. The qualification must
affect an employee’s ability to do the job and relate to the essence or the central mission of the
employer’s business. U.A.W. v. Johnson Controls, Inc., 499 U.S. 187 (1991). Federal courts
have consistently found that both the language and legislative history of Title VII indicate that the
BFOQ exemption should be applied only to the narrowest extent. Dothard v. Rawlinson, 433
U.S. 321 (1977).
The BFOQ defense was upheld in Pime v. Loyola Univ. of Chicago, 803 F.2d 351 (7th
Cir. 1986). In Pime, a Jewish lecturer filed a Title VII claim against a university based on the
university’s reservation of three vacancies in tenure-track teaching positions for Jesuits. The
court found that the University’s long Jesuit tradition and its desire to have adequate Jesuit
presence in the philosophy department constituted a valid BFOQ.
In Vigars v. Valley Christian Center of Dublin, Cal., 805 F.Supp. 802 (N.D. Cal. 1992) a
librarian who was terminated brought suit under Title VII, alleging that she was dismissed from
the parochial school because of her out-of-wedlock pregnancy. In response, the school argued
that the plaintiff served as a role model for the school’s students, and thus, her moral character
and “non-pregnant out of wedlock” status was a BFOQ. The court denied the school’s motion for
summary judgment on this point, finding that there was serious disagreement about how central
the plaintiff’s moral life was to her job as librarian, whether or not she was truly expected to act
as a role model, and what impact her pregnancy truly had on her ability to perform either of those
functions.
An employer’s BFOQ defense was denied in Abrams v. Baylor Coll. of Med., 805 F.2d
528 (5th Cir. 1986). In Abrams, the court found that being non-Jewish was not a BFOQ for a
university that had a contract to supply physicians on rotation at a Saudi Arabian hospital, when
the hospital presented no evidence to support its contention that Saudi Arabia would actually have
refused an entry visa to a Jewish faculty member.
However, a religious school could dismiss a music teacher, for carrying on an adulterous
relationship with the father of children enrolled in the school, even though she claimed that her
private life was irrelevant to her duties as a teacher of music, because a religious school could
make adherence to the moral standards of the church a requirement of continued employment.
Gosche v. Calvert High School, 997 F.Supp. 867 (N.D.Ohio 1998).
ASSOCIATIONAL DISCRIMINATION
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According to a number of Circuit Court decisions, Title VII also provides an employee
with the right to allege discrimination or retaliation based not only on his or her own protected
characteristics or activity, but on the employee’s “association” with another individual who comes
within a protected classification or engaged in a protected activity.
In Holcomb v. Iona College, 521 F.3d 130 (2nd Cir. 2008), the Second Circuit held that, as
a matter of first impression, a claim of adverse action based on an employee’s association with a
person of another race is cognizable under Title VII. In Holcomb, a Caucasian former college
basketball coach alleged that he was terminated because of his association with his AfricanAmerican spouse. The Second Circuit agreed that the allegation was sufficient to state a claim of
“associational” discrimination under Title VII. The court stated, “where an employee is subjected
to adverse action because an employer disapproves of interracial association, the employee suffers
discrimination because of the employee’s own race.”
Similarly, in Barrett v. Whirlpool Corp., 556 F.3d 502 (6th Cir. 2009), the Sixth Circuit
recognized that Title VII protects individuals who, though not members of a protected class, are
“victims of discriminatory animus toward [protected] third persons with whom the individuals
associate.” Likewise, in Drake v. Minnesota Mining & Mfg. Co., 134 F.3d 878 (7th Cir. 1998),
the Seventh Circuit recognized a cause of action based on associational discrimination, holding
that a white employee may sue under Title VII for discrimination against him resulting from his
friendship with black co-workers.
While a majority of associational discrimination claims relate to discrimination on the
basis of association with persons of a particular race, color, or national origin, a New York district
court recognized a cause of action for associational discrimination based on gender. In
Ventimiglia v. Hustedt Chevrolet, 2009 WL 803477 (E.D.N.Y. 2009), the court held that a jury
could conclude that the plaintiff was subject to a hostile work environment because of his sex. In
other words, if not for his sex (male), his relationship with his co-worker (female) would not have
been an issue.
RETALIATION
Title VII also prohibits retaliation by an employer in response to an employee exercising
his/her rights under the Act. Under Title VII, unlawful retaliation occurs where an employer
takes adverse employment action against an employee for opposing impermissible discrimination.
Rogers v. City of Chicago, 320 F.3d 748 (7th Cir. 2003). Title VII not only protects employees’
rights to be free from certain types of forbidden discrimination; it also protects the right to speak
out against discrimination. Henandez v. Spacelabs Med. Inc., 343 F.3d 1107 (9th Cir. 2003).
Thus, an employer may not discharge, discipline or take action against employees for exercising
their Title VII rights. Exercising these rights can take the form of actually filing a charge of
discrimination or testifying regarding improper conduct, or may be as small as complaining of
discrimination or taking actions to eradicate discrimination. 42 U.S.C. §2000e-3(a).
In Bianchi v. City of Phil., 80 Fed. Appx. 232 (3d Cir. 2003), co-workers harassed a male
firefighter because they believed he was homosexual. The co-workers placed condoms and
sexual paraphernalia in his desk and gear, placed playing cards depicting nude males with his
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belongings, and soiled his gear with urine and feces, causing a fungal infection around his mouth.
The firefighter informed his superiors of his intention to file a complaint and was subsequently
transferred to a desk job. The court held that the city’s conduct constituted impermissible
retaliatory conduct. The court admitted evidence of the graphic nature of the acts of sexual
harassment, because it showed that the city retaliated against the firefighter in order to keep such
conduct unexposed.
One court held that an employer’s attendance policy that distinguishes between leave due
to a court order and leave to enable an employee to engage in private business, including the
filing of lawsuits against the employer, did not amount to retaliatory conduct actionable under
Title VII. Johnson v. ITT Aerospace/Communications Division of ITT Industries, Inc., 272 F.3d
498 (7th Cir. 2001). The court held that the employer’s conduct in assessing two unexcused
absences for the days the plaintiff attended a pretrial conference and a deposition for his lawsuit
was not retaliation.
Additionally, some courts have held that a refusal to allow a lateral transfer is not an
adverse employment action sufficient to assert a retaliation claim under Title VII. Burger v.
Central Apartment Management, 168 F.3d 875 (5th Cir. 1999). The court in Burger held that a
transfer that does not involve a demotion in form or substance cannot rise to the level of a
materially adverse employment action. Further, a transfer involving no reduction in pay and no
more than a minor change in working conditions also cannot support a retaliation claim.
However, a Seventh Circuit opinion held that a lateral transfer which allowed an employee
to retain his salary, title and benefits, nonetheless constituted an adverse employment action
because the new position was objectively inferior, involving far less skill and significantly harsher
working conditions. Tart v. Illinois Power Co., 366 F.3d 461 (7th Cir. 2004). In so holding, the
court in Tart recognized two classes of employment action, other than loss of compensation or
benefits, where the criteria for a materially adverse employment action could be met: (1) cases
where a nominally lateral transfer without a change in financial terms significantly reduces the
employee’s career prospects by preventing the employee from using the skills in which the
employee is trained and experienced; and (2) cases in which the employee is not moved to a
different job, but the conditions in which the employee works are changed in a way that subjects
the employee to a humiliating, degrading, unsafe, unhealthy, or otherwise significantly negative
alteration in workplace environment. The court reiterated that employers cannot insulate
themselves from liability simply by offering to transfer an employee at the same salary and
benefits.
With respect to retaliatory failure-to-hire claims, the First Circuit has stated that, to
establish the adverse employment prong of a retaliation claim, the plaintiff must have submitted
an application for a particular vacancy. Velez v. Janssen Ortho, LLC, 467 F.3d 802 (1st Cir.
2006). In Velez, the plaintiff alleged that the employer failed to hire her because she had filed a
lawsuit against the company in the past. According to the court, however, the plaintiff failed to
state a Title VII failure-to-hire claim because general letters seeking placement in “any position
available” could not serve as the predicate for an adverse employment action.
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One court held that disciplining an employee for filing a frivolous charge against the
employer is not actionable retaliation. Johnson v. ITT Aerospace/Communications Div. of ITT
Indus. Inc., 272 F.3d 498 (7th Cir. 2001). On the other hand, the Ninth Circuit has held that an
employee’s refusal to cooperate in the retaliatory treatment of another employee alone constituted
protected activity and supported a claim for retaliation. Thomas v. City of Beaverton, 379 F.3d
802 (9th Cir. 2004). Another court has held that a negative job reference can constitute
retaliation. Hillig v. Rumsfeld, 381 F.3d 1028 (10th Cir. 2004). Moreover, the Hillig court only
required the plaintiff to bring forward evidence that the negative reference likely would have had
a negative effect on future job opportunities, not that it actually cost her a new job.
The anti-retaliation provision of Title VII also encompasses retaliation claims brought by
an employee who speaks out about discrimination during an employer’s internal investigation.
Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, 555 U.S.
271 (2009). In Crawford, an employee claimed she was fired in retaliation for answering
questions in connection with her employer’s internal sexual harassment investigation. The
Supreme Court held that the employee’s disapproving account of a fellow employee’s harassment
of her when questioned constituted “opposing an unlawful employment practice” under the
statute, and therefore the employee could bring suit under Title VII.
In determining if an employer’s alleged retaliation possesses the required causal
connection with the employee’s assertion of rights, a court will examine the remoteness between
the retaliation and the assertion of rights under Title VII. In Albrechtsen v. Bd. of Regents of the
Univ. of Wis. Sys., 309 F.3d 433 (7th Cir. 2002), cert. denied, 539 U.S. 941 (2003), the court held
that a professor’s contention that the university canceled two workshops and withheld a salary
increase in 1998 in retaliation for events that occurred from 1987 until 1991 was too remote to
support a retaliation claim. Rather, most courts have held that a time gap of even one year
between the act and the alleged retaliation is too remote to support a retaliation claim under Title
VII.
Title VII also prohibits an employer’s retaliation against an employee who is opposed to
an unlawful employment practice under Title VII. Dey v. Colt Constr. & Dev. Co., 28 F.3d 1446
(7th Cir. 1994). The actual practice does not have to constitute a violation of Title VII; the
employee need only have a reasonable belief that the practice constituted a violation.
The Supreme Court held that Section 1981 encompasses a complaint of retaliation against
a person who has complained about a violation of another person’s contract-related “right.”
CBOCS West, Inc. v. Humphries, 553 U.S. 442 (2008). In CBOCS, the plaintiff was fired for
speaking out against the termination of a fellow employee for race-based reasons. The Court held
that not only are retaliation claims encompassed by Title VII, employment-related retaliation
claims also fall under Section 1981. The Court ruled that retaliation claims under Section 1981
include those claims brought by an individual who has suffered retaliation for helping another.
Courts have also construed retaliatory hostile work environments to violate Title VII. A
retaliatory hostile work environment exists where an employee who filed a Title VII charge
experiences a hostile work environment that the employer initiated or tolerated in response to the
filing of the charge. Heur v. Weil-McLain, 203 F.3d 1021 (7th Cir. 2000). The Seventh Circuit
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has emphasized, however, that an employer will be liable for retaliatory harassment by coworkers only if it negligently fails to take proper preventive or corrective measures. Nair v.
Nicholson, 464 F.3d 766 (7th Cir. 2006).
Proving a Retaliation Claim
As with claims of discrimination, a plaintiff may establish a prima facie case of retaliation
in two ways: directly or indirectly. Under the direct method, an employee must show that: (1) he
engaged in statutorily protected activity; (2) he suffered an adverse action taken by the employer;
and (3) there was a causal connection between the two. Tomanovich v. City of Indianapolis, et al.,
457 F.3d 656, 663 (7th Cir. 2006).
On the other hand, the indirect method requires a plaintiff to show that: (1) he engaged in
a statutorily protected activity; (2) he met the employer’s legitimate expectations; (3) he suffered
an adverse employment action; and (4) he was treated less favorably than similarly situated
employees who did not engage in statutorily protected activity. Haywood v. Lucent, 323 F.3d
524, 530 (7th Cir. 2003).
Direct evidence includes “any statement or document which shows on its face that
improper citation served as a basis, though not necessarily the sole basis, for adverse employment
action.” Where an employee is able to support a claim of retaliation with direct evidence, the
McDonnell Douglas burden-shifting framework does not apply. In such situations, once the
employee presents evidence that the retaliation was based partly on an improper motive, the
burden shifts to the employer to prove by a preponderance of the evidence that the action was
made regardless of the improper motive. Then, the employee may provide circumstantial evidence
creating a rebuttable presumption of retaliation. Fabela v. Socorro Indep. Sch. Dist, 329 F.3d 409
(5th Cir. 2003) (overruling recognized in Gaalla v. Brown, 460 F. App'x 469, 480 (5th Cir. 2012)
(citing Fabela v. Socorro Ind. Sch. Dist., 329 F.3d 409, 415 (5th Cir.2003) (citations omitted),
overruled on other grounds by Smith v. Xerox Corp., 602 F.3d 320, 328 (5th Cir.2010))
Circumstantial evidence is any statement, document, or testimony that indicates or indirectly
shows that the employer acted with an improper motive in retaliating against the employee.
However, the distinction between the direct method and the indirect method is fairly
vague. The Seventh Circuit recently clarified the “direct” method of proof and held that a
plaintiff need only “prove by means of circumstantial evidence that he engaged in protected
activity (filing a charge of discrimination) and as a result suffered the adverse employment action
of which he complains.” Sylvester v. SOS Children’s Villages Illinois, Inc., 453 F.3d 900 (7th
Cir. 2006). According to the Seventh Circuit, “direct” proof of discrimination is not limited to
near-admissions by the employer that its decisions were based on a proscribed criterion, but also
includes circumstantial evidence suggestive of discrimination, although perhaps through a longer
string of inferences. Thus, a plaintiff may prevail under the direct method by presenting enough
circumstantial evidence that a reasonable jury could conclude that accusations or complaints of
harassment were a cause leading to the adverse employment action. Id., at 903.
Furthermore, courts have provided clarity regarding the causal connection that must be
established under the direct method. For instance, a lengthy period of time is actually considered
to be counter-evidence of a causal connection. In fact, the Seventh Circuit and Illinois courts
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have opined that certain lapses of time between the protected activity and the adverse action can
negate a finding of a causal connection. See Moser v. Dept. of Corrections, 406 F.3d 895 (7th Cir.
2005) (finding no causal connection where one month separated the protected activity and the
adverse employment action); Lewis v. Holsum of Fort Wayne, Inc., 278 F.3d 706 (7th Cir. 2002)
(finding the interval between an October 1997 charge and a January 1998 termination, without
more, to be too long to support an inference of retaliation); Schulz v. Varian Medical Systems,
Inc., 315 F.Supp 2d 923 (N.D. Ill. 2004) (stating that the plaintiff failed to demonstrate a causal
link where two weeks separated the plaintiff’s purportedly protected expression and the
termination of his employment); and Filipovic v. K & R Express Sys., Inc., 176 F.3d 390 (7th Cir.
1999) (finding that a period of four months negates causal inference).
Moreover, as discussed above, the Supreme Court recently held that a Title VII plaintiff
must prove that retaliation was the only reason for the adverse decision. University of Texas
Southwestern Medical Center v. Nassar, 133 S.CT. 2517 (2013). Put another way, a plaintiff must
prove that his or her employer would not have taken the negative employment action but for the
improper motive.
Retaliation Claims Not Dependent on the Underlying Claim
It is critical that employers understand that the success of a retaliation claim against an
employer is not dependent on the success or validity of the employee’s underlying claim of
discrimination. Therefore, even if a court finds, or an employer believes, that there is no merit to
an employee’s discrimination claim, the employer may still be liable for retaliating against the
employee for asserting his/her rights under Title VII.
Based on this, it is imperative that employers train their supervisors and managers to
exercise caution in the treatment of any employee who has engaged in protected activity under
Title VII’s anti-retaliation provision. This is particularly important in light of the Supreme Court’s
decision in Crawford, discussed above, which expanded the definition of protected activity to
include opposing an unlawful practice even where no charge is filed. In instances where a formal
or an informal complaint is pending, it is suggested that employers confer with counsel before any
adverse is action is taken against an employee involved in a pending complaint.
ASSOCIATIONAL RETALIATION
As indicated above, in Thompson v. North American Stainless, LP., 131 S. Ct. 863 (2011),
the United States Supreme Court resolved the issue of whether employers can be held liable for
third party retaliation under Title VII. In Thompson, both Thompson and his fiancée were
employees of North American Stainless (“NAS”). Thompson’s fiancée filed a charge of sex
discrimination with the Equal Employment Opportunity Commission (“EEOC”). Three weeks
later, NAS discharged Thompson. Thompson then filed a charge with the EEOC under Title VII,
claiming that NAS fired him in order to retaliate against his fiancée for filing her charge of
discrimination. The two questions before the Supreme Court were: (i) did NAS’ discharge of
Thompson constitute unlawful retaliation; and (ii) if NAS’ discharge of Thompson constituted
unlawful retaliation, does Title VII grant Thompson a cause of action?
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With regard to the first question, the Supreme Court had “little difficulty” in concluding
that if the facts alleged by Thompson are true, then NAS’ firing of Thompson violated Title VII.
Title VII’s anti-retaliation provision is broadly worded and is not limited to discriminatory actions
that affect the terms and conditions of employment. Rather, it prohibits any employer action that
well might have dissuaded a reasonable worker from making or supporting a charge of
discrimination. A reasonable worker might be dissuaded from engaging in protected activity if
she knew that her fiancé would be fired.
The more difficult question was whether Thompson could sue NAS for its alleged
violation of Title VII. Drawing on precedent which interpreted the term “person aggrieved,” the
Supreme Court said that the language established a regime under which a plaintiff may not sue
unless he “falls within the ‘zone of interests’ sought to be protected by the statutory provision
whose violation formed the legal basis for his complaint.” The “zone of interests” test denies a
right of review if the plaintiff’s interests are so marginally related to or inconsistent with the
purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to
permit the suit.
The Supreme Court held that the term “aggrieved” in Title VII incorporates the “zone of
interests” test, enabling suit by any plaintiff with an interest arguably sought to be protected by
the statute. The Supreme Court applied the test and concluded that Thompson fell within the
zone of interests protected by Title VII. Thompson was an employee of NAS, and the purpose of
Title VII is to protect employees from their employers’ unlawful actions. Accepting the facts as
alleged, the Supreme Court found that Thompson was not an accidental victim of the retaliation
of the employer’s unlawful act. To the contrary, injuring Thompson was the employer’s intended
means of harming Thompson’s fiancée for filing her charge of discrimination. Thus, Thompson
was well within the zone of interests sought to be protected by Title VII, and was a person
aggrieved with standing to sue.
This decision makes clear that it is unlawful for an employer to do indirectly that which it
cannot do directly. If the employment action would be retaliatory if it were directed against
someone who engaged in protected activity, the employment action is likely to be retaliatory if
taken against someone with a relationship to the employee who engaged in the protected activity.
However, the Supreme Court declined to identify a fixed class of relationships for which thirdparty reprisals are unlawful. Because of the broad statutory text and the variety of workplace
contexts in which retaliation may occur, the Supreme Court stated that Title VII’s anti-retaliation
provision is simply not reducible to a comprehensive set of clear rules.
THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION & TITLE VII
The Equal Employment Opportunity Commission (“EEOC”) is a federal agency created
by Title VII of the Civil Rights Act of 1964, which began operating in 1965. It is responsible for
receiving and investigating charges of discrimination from individuals within the employment
realm. Further, the EEOC itself can bring a lawsuit charging discrimination without initiation by
an employee or potential employee.
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Filing a “charge of discrimination” with the EEOC is a prerequisite to an individual filing
a lawsuit for violation of Title VII. The statute of limitations for filing a Title VII claim with the
EEOC depends on whether the state is a “deferral state,” meaning it has a state agency similar to
the EEOC. As stated above, in deferral states, an employee alleging a Title VII violation must file
a claim with the EEOC within 300 days following the alleged unlawful practice. In states that do
not have a state commission or state agency equivalent to the EEOC, the employee is required to
file a charge within 180 days after the conduct in violation of Title VII occurred.
The tolling period is calculated from the time the discrete discriminatory act (i.e.
discharge, termination, demotion) occurs, and claims are time-barred if not filed within the
applicable 180- or 300-day period, even if the discriminatory act is related to acts that fall within
the required timeframe. Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002). However,
in cases involving continuing violations, such as hostile work environment claims, where the
discriminatory act(s) do not fall within one single day, claims are not time-barred so long as a
single act comprising the hostile work environment falls within the limitation period.
In considering what constitutes a continuing violation, one court held that an employer’s
rejection of an employee’s proposed accommodation for his religious practices did not qualify as
a continuing violation. Elmenayer v. ABF Freight Sys., Inc., 318 F.3d 130 (2d Cir. 2003). The
court held that the denial of the accommodation was a single discrete act that did not involve a
series of events or periodic implementation. A contrary result was reached in another case, where
the court held that the employer paying a minority employee less than other employees on a
weekly basis comprised a periodic implementation. Bazemore v. Friday, 478 U.S. 385 (1986).
Generally, all Title VII claims must be filed with an oath or affirmation within the 180- or
300-day period following the discriminatory act. However, an EEOC regulation permits a party
that filed a Title VII claim within the required time period, but failed to include an oath or
affirmation, to maintain the action even if the oath or affirmation is not timely filed, because the
late filing of the oath or affirmation “relates back” to the date of the timely filed claim. Edelman
v. Lynchburg College, 535 U.S. 106 (2002).
Once a charge is filed, EEOC investigators must notify the employer within 10 days, and
will proceed to interview witnesses, examine documents, and possibly visit the employment site
to conduct a fact-finding investigation. During this process, the EEOC can require that the
employer provide a statement of the employer’s position (often referred to as a “position
statement”), as well as relevant records and documents for examination. Most of the EEOC’s
activities and information relating to a particular charge are protected by confidentiality
regulations. 29 CFR §1601.22 & §1601.26. It is important to note that documents submitted to
the EEOC or the equivalent state agency must be maintained for the statutory period, or an
adverse inference could be drawn from the spoliation of evidence. Byrnie v. Town of Cromwell,
Bd. of Educ., 243 F.3d 93 (2d Cir. 2001).
After investigation, and within 120 days from the filing of a charge, the EEOC will either
dismiss the charge, issue a “no cause” determination, or issue a “reasonable cause” determination.
A dismissal is issued if the EEOC determines that there is no reasonable cause to believe the
charge is true, or if the aggrieved party fails to cooperate with the EEOC’s investigation and
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settlement efforts. 42 U.S.C. §2000e-5(b) & 29 CFR §1601.18. The EEOC will issue a
reasonable cause or no cause determination based on whether it finds reasonable cause to believe
that an unlawful employment practice has occurred or is occurring by the employer. 29 CFR
§1601.19; 29 CFR §1601.21.
If support for a discrimination charge is found, Title VII requires the EEOC to attempt to
settle the matter through conciliation proceedings, “to eliminate any such alleged unlawful
employment practice by informal methods of conference, conciliation and persuasion.” 42 U.S.C.
§2000e-5(b); 29 CFR §1601.24.
If the conciliation process is unsuccessful, the EEOC can file its own lawsuit against the
employer. An individual can also bring a lawsuit against an employer for Title VII violations
whether or not the EEOC’s findings support a claim, or if the charge has been on file with the
agency for 180 days with no determination during that time. Even if the EEOC dismisses the
claim or reaches a settlement with the employer to which the aggrieved individual is not a party,
the individual may still bring suit. 29 CFR §1601.28(e).
Another prerequisite to an individual filing suit is the EEOC’s issuance of a “Notice of
Right to Sue.” This notice is issued either automatically with an EEOC dismissal or determination
as described above, or upon the request of the individual. The notice gives the individual
authorization to bring an action under Title VII in federal district court within 90 days from the
date the notice is issued, and will include the EEOC’s disposition of the charge. 29 CFR
§1601.28. However, even if a party fails to file a claim within 90 days after the notice is issued, a
court may allow a party to file a claim based on the doctrine of equitable tolling. In Stoll v.
Runyon, 165 F.3d 1238 (9th Cir. 1999), the court held that a former employee who waited more
than a year after administrative proceedings were completed to file a sexual harassment suit under
Title VII, was entitled to equitable tolling of the 90-day limitation period because her delay was
caused by mental illness resulting from the harassment.
There are some exceptions to the timing requirements and procedures followed by the
EEOC in states that have their own laws against discrimination and their own state agencies
policing these laws. In these states, a complaining party may be required to file his/her charge
with the state agency and allow the state agency to investigate for a period of time prior to filing
the charge with the EEOC. In such instances, there are additional regulations and agreements
which govern the interplay between the state agency and the EEOC.
DAMAGES
A federal court may apply several types of remedies and damages if a Title VII violation
is found, including the following:
(1)
prohibit the employer from engaging in the unlawful practice and act;
(2)
order affirmative relief, including reinstatement or hiring of the individual, if
appropriate;
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(3)
award back pay from the time of the discriminatory act to the time gainful
employment is secured or the employer offers to re-employ unconditionally, but no
further back than two years from the filing of the charge;
(4)
award front pay from the time of the judgment to the time the individual could
reasonably be expected to obtain substantially comparable employment (42 U.S.C.
§2000e-5(g));
(5)
award compensatory and punitive damages if the court finds the employer acted
with malice or reckless indifference to the rights of the individual; and/or
(6)
award attorneys’ fees and costs, including expert witness fees, to the prevailing
party upon the discretion of the court. (42 U.S.C. § 1981(a); 2000e-5(k)).
Compensatory damages are awarded for intentional discrimination resulting in future
pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of
life and other nonpecuniary losses. The EEOC has the authority to require employers to pay
compensatory damages when the EEOC finds discrimination against federal employees in
violation of the Title VII. West v. Gibson, 527 U.S. 212 (1999).
Punitive damages may be awarded in Title VII cases if the employee demonstrates that the
employer acted with malice or reckless indifference to the employee’s federally protected right to
be free from discrimination. Kolstad v. Am. Dental Assoc’n, 527 U.S. 526 (1999). An employer
can be liable for punitive damages for its employee’s conduct if the employee: (1) held a
managerial position; (2) was acting within the course of employment; or (3) acted with reckless
indifference toward the complaining employee’s federally protected rights. For example, an
award of punitive damages was upheld where an employer sought to hire only a female for a
vacant position and refused to grant any interviews to male applicants. Medcalf v. Trustees of
Univ. of Pa, 71 Fed. Appx. 924, (3d Cir. 2003).
A jury may award punitive damages in a sexual harassment case even where the employee
did not suffer an injury. Timm v. Progressive Steel Treating, 137 F.3d 1008 (7th Cir. 1998). A
plaintiff may also recover limited statutory punitive damages absent an award of either actual or
nominal damages. Cush-Crawford v. Adchem Corp., 271 F.3d 352 (2d Cir. 2001). Because the
objective of punitive damages differs from the objective of compensatory damages, a jury may
award punitive damages where it finds that an employer engaged in prohibited discrimination,
regardless of whether the plaintiff receives an award of compensatory or nominal damages.
However, a grossly excessive award of punitive damages will violate the Due Process
Clause of the Fourteenth Amendment. In determining if an award of punitive damages is grossly
excessive, the Supreme Court has set forth the following three factors to consider: (1) the
reprehensibility of the defendant’s conduct; (2) the ratio of the compensatory damages to the
punitive damages; and (3) the difference between the punitive damages awarded and the civil
penalties authorized or imposed in comparable cases. State Farm Mut. Auto. Ins. Co. v. Campbell,
538 U.S. 408 (2003). Based on these factors, the Court in Campbell held that an award of $145
million in punitive damages was excessive where the compensatory damages were $1 million.
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An award for attorneys’ fees is generally a matter of the court’s discretion and will depend
on the facts of each case. Kitchen v. TTX Co., 284 F.3d 688 (7th Cir. 2002). Therefore, a court on
appeal will not overturn a lower court’s award of attorneys’ fees, unless the court abused its
discretion. An employer may recover attorneys’ fees against an employee if the employer
establishes that the employee brought a claim in bad faith. Whitson v. LM Services Corp., 69 Fed.
Appx. 815 (8th Cir. 2003). It is also possible for an employer to recover an award of attorneys’
fees against the EEOC. EEOC v. Asplundh Tree Expert Co., 340 F.3d 1256 (11th Cir. 2003). In
Asplundh, the court awarded the employer attorneys’ fees because the EEOC, “in its haste to file
the instant lawsuit, with lurid, perhaps newsworthy allegations … failed to fulfill its statutory duty
to act in good faith to achieve conciliation, effect voluntary compliance, and to resolve judicial
action as a last resort.” The plaintiff alleged that he was racially discriminated against and on one
occasion had a noose placed around his neck by co-workers. The court believed that the EEOC
failed to satisfy its statutory obligations in attempting to conciliate the matter based on its desire
to quickly remove the case from the conciliation stage and bring it to trial, in order to expose the
plaintiff’s allegations to the public domain.
Compensatory and punitive damages are capped by federal statute based upon the
employer’s number of employees. The following limitations for the combination of punitive and
compensatory damages apply to intentional discrimination claims based on sex, religion, or
disability (though juries are not informed of these caps):
Number of Employees
Damages Cap
15 - 100
101 - 200
201 - 500
501 and more
$50,000
$100,000
$200,000
$300,000
These caps only apply to the punitive and compensatory aspects of an award, and do not
include back pay or front pay. Pollard v. E.I. du Pont de Nemours & Co., 532 U.S. 843 (2001).
However, in a Title VII case, if a court awards punitive damages in excess of the abovementioned statutory caps, the amount in excess may be re-allocated to the employee’s award for
damages arising under state law. Hall v. Cons. Freightways Corp. of Del, 337 F.3d 669 (6th Cir.
2003).
Front pay is a proper remedy in Title VII cases when reinstatement is not available or not
advisable, and is designed to compensate victims of discrimination for the reasonable period of
time it would take to find comparable employment. Front pay is a remedy authorized by Congress
as an alternative to awarding reinstatement. Also, in awarding a judgment of back pay, a court
may include pre-judgment interest on the award, which is computed up to the date of the final
judgment. Fine v. Ryan Int’l Airlines, 305 F.3d 746 (7th Cir. 2002).
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REQUIRED NOTICES, RECORDS AND DOCUMENTATION
Title VII requires employers with 100 or more employees to file an annual Employer
Information Report (EEO-1) with the EEOC. In addition, if the employer generates personnel,
employment and application records, these records must be kept for a one-year period from the
time the record is made or action is taken against the employee. Records relevant to a charge of
discrimination shall be kept until the final disposition of the charge. 42 U.S.C. §2000e-8(c); 29
CFR §1602.7, §1602.14. Otherwise, the EEOC does not require that specific records be
generated. 29 CFR §1602.12.
An employer may be subject to further liability for destroying or failing to preserve
records or documents related to a Title VII (or any other) claim. Courts have generally held that
employers have a duty to preserve records and any other evidence when the party knows or
should have known that the evidence is relevant to future litigation. Zubulake v. UBS Warburg
LLC, 220 F.R.D. 212, 2003 WL 22410619 (S.D.N.Y. 2003). This duty does not require an
employer to keep every shred of paper, e-mail, document, and record. Rather, the duty extends to
the following: (1) any document or tangible thing made by an individual likely to have
discoverable information that the employee may utilize in support of a claim or defense; (2)
documents prepared for the complaining employee; and (3) any other document or record relevant
to the subject matter involved in the employee’s claim. Remedies against employers who violate
this duty may include imposing costs on the employer or instructing the jury of an adverse
inference against the employer.
Employers must also post an official EEOC Notice in a conspicuous location in the
workplace, stating that equal employment is the law and individuals who believe they have been
discriminated against should contact the EEOC. A fine of $100 may be imposed for each offense
of the EEOC Notice requirements. 42 U.S.C. §2000e-10(a); 29 CFR §1601.30.
EEO REPORTING REQUIREMENTS
The EEO-1 Report is the principal reporting form by which employers provide the federal
government with a count of their workforce by ethnicity, race, and gender, divided into job
categories. The EEOC requires the EEO-1 Report annually from private employers with 100 or
more employees and federal contractors with federal government contracts of $50,000 or more
and 50 or more employees.
The EEO-1 reporting requirements include the following:
•
Add a category labeled “two or more races;”
•
Divide the current category labeled “Asian or Pacific Islander” into two categories:
“Asian” and “Native Hawaiian or other Pacific Islander;”
•
Rename “black” as “black or African American;”
•
Rename “Hispanic” as “Hispanic or Latino;”
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•
Strongly endorse self-identification of race and ethnic categories by workers, as opposed
to visual identification by employers; and
•
Divide the current category of “Officials and Managers” into two levels: executives within
two reporting levels of the chief executive officer and lower-level managers.
The EEO filing requirements specifically exclude state and local governments, primary
and secondary school systems, institutions of higher education, Indian tribes and tax-exempt
private membership clubs other than labor organizations.
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THE AMERICANS WITH DISABILITIES ACT
The Americans with Disabilities Act (“ADA”) was enacted by Congress in 1990 and
prohibits employment discrimination based on disability. The ADA also places requirements on
employers to make reasonable accommodations for qualified individuals with disabilities. In
order to prove disability discrimination under the ADA, a claimant must establish that he/she: (1)
is disabled within the meaning of the ADA, (2) is qualified to perform the essential functions of
the job, and (3) suffered from an adverse employment action because of his/her disability. Nese v.
Julian Nordic Construction Co., 405 F.3d 638 (7th Cir. 2005).
The Americans with Disabilities Act Amendments Act of 2008 (“ADA Amendments Act”
or “ADAAA”), which was enacted on September 25, 2008, became effective on January 1, 2009.
The ADA Amendments Act made important changes to the ADA by rejecting the holdings in
several Supreme Court decisions and portions of the EEOC’s regulations pertaining to the ADA.
The ADAAA retains basic definitions; however, it changes the way in which many statutory
terms should be interpreted. On March 25, 2011, the EEOC issued new regulations clarifying the
ADAAA and rebuking portions of its prior regulations.
Moreover, the ADAAA amends the “Codified Findings” section of the original ADA,
which stated that “individuals with disabilities are a discrete and insular minority.” However,
most significantly, the Act:
• Emphasizes that the definition of “disability” should be interpreted broadly.
• Expands the definition of “major life activities” by including two non-exhaustive lists.
The first list includes many activities that the EEOC had previously recognized (e.g.,
walking), as well as activities that the EEOC had not previously recognized (e.g.,
reading, bending, and communicating). The second list includes major bodily
functions (e.g., “functions of the immune system, normal cell growth, digestive, bowel,
bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive
functions.”) the disruption of which amounts to a disability within the meaning of the
ADA;
• States that mitigating measures other than “ordinary eyeglasses or contact lenses” shall
not be considered in assessing whether an individual has a disability;
• Clarifies that an impairment that is episodic or in remission is a disability if it would
substantially limit a major life activity when active;
• Provides that an individual subjected to an action prohibited by the ADA (e.g., failure
to hire) because of an actual or perceived impairment will meet the “regarded as”
definition of disability, unless the impairment is transitory and minor;
• Provides that individuals covered only under the “regarded as” prong are not entitled to
reasonable accommodation; and
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TO WHOM DOES THE ADA APPLY?
The ADA applies to any employer with 15 or more employees, including state and local
governments. It also applies to employment agencies and to labor organizations.
Further, the ADA only applies to “employees” and, therefore, bona fide independent
contractors are not protected. In determining whether an individual is an “employee” or an
“independent contractor,” courts generally look at the following factors: (1) how much control
the employer had over the individual; (2) the occupation/skill required of the individual; (3) who
was responsible for the cost of operating the individual’s business; (4) what formed the
individual’s pay and how was it calculated; and (5) how long the job was expected to last and/or
the parties’ commitment to each other. Generally, the degree of supervision and control exercised
by the employer is the most significant factor in separating “independent contractors” from
“employees.” Nationwide Mutual Insurance v. Darden, 503 U.S. 318, 323; Mazzei v. Rock N
Around Trucking, Inc., 246 F.3d 956 (7th Cir. 2001). Additionally, the ADA’s nondiscrimination
standards apply to federal sector employees under section 501 of the Rehabilitation Act, as
amended, and its implementing rules.
The 15-employee requirement is calculated by the “payroll” method as discussed above
under the section on Title VII – meaning that part-time or flex-time employees count toward the
minimum. In Glackamas Gastroenterology Assoc., P.C. v. Wells, 538 U.S. 440 (2003), the
Supreme Court considered which individuals may be included in the tally in determining whether
the employer falls within the 15-employee requirement. At issue was whether four physician
shareholders who owned the professional corporation and comprised the board of directors were
considered employees for purposes of the ADA. The Court held that in determining which
individuals are employees under the ADA, the primary consideration is the common-law element
of control.
In determining whether shareholder-directors were employers, the Court in Glackamas
considered whether:
(1)
The organization can hire or fire the individual or set rules and regulations on the
individual’s work;
(2)
The organization supervises the individual;
(3)
The individual reports to someone higher in the organization;
(4)
The individual is able to influence the organization;
(5)
The parties intended that the individual be an employee, as stated in written
contracts or agreements; and
(6)
The individual shares in the profits, losses, and liabilities of the organization.
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Based on these considerations, the Court remanded the case for further proceedings, because
although the district court’s findings seemed to favor concluding that the physicians were not
shareholders, there was evidence that could contradict this finding.
Under certain circumstances, an employer can be liable for its corporate predecessor’s
violations of the ADA. EEOC v. Rockwell In’l Corp., 36 F.Supp.2d 1056 (N.D. Ill. 1999).
Generally, a court will hold an employer liable for its predecessor’s actions if the following three
factors are shown: (1) the successor in interest had prior notice of the claim against the original
employer; (2) the successor in interest is able to provide the relief requested; and (3) a sufficient
continuity in the business operations of the predecessor and successor exists.
ADA REQUIREMENTS FOR EMPLOYERS
Generally, Title I of the ADA prohibits private employers, state and local governments,
employment agencies and labor unions from discriminating against qualified individuals with
disabilities in job application procedures, hiring, firing, advancement, compensation, job training,
and other terms, conditions, and privileges of employment.
Employees must be living up to the employer’s legitimate expectations of job performance
in order to state an ADA claim. Leffel v. Valley Financial Serv., 113 F.3d 787 (7th Cir. 1997);
Manning v. University of Chicago, 401 F.Supp.2d 858 (N.D. Ill. 2005). The ADA does not
require an employer to give a disabled employee preferential treatment by waiving its normal
requirements for a job or by offering special training which was not offered to a non-disabled
employee. Williams v. United Ins.Co. of N.A., 253 F.3d 280 (7th Cir. 2001).
An employer is required to make a reasonable accommodation to the known disability of a
qualified applicant or employee if it would not impose an “undue hardship” on the operation of
the employer’s business. It has been held that when one reasonable accommodation does not
suffice to enable a disabled employee to perform the essential functions of the job, an employer
must explore alternative accommodations prior to making a decision to discharge. Humphrey v.
Mem’l Hosp. Assoc., 239 F.3d 1128 (9th Cir. 2001). Nonetheless, according to EEOC guidelines,
an employer is not required to lower quality or production standards to make an accommodation;
nor is an employer obligated to provide personal use items such as glasses or hearing aids.
Moreover, an employer is not required to provide accommodations for the misconduct of
an employee, even if such conduct is somehow connected to the employee’s disability. Spath v.
Hayes Wheels Intern.-Indiana, Inc., 211 F.3d 392 (7th Cir. 2000); Bodenstab v. County of Cook,
569 F.3d 651 (7th Cir. 2009). In Bodenstan¸ the plaintiff claimed that his employer regarded him
as having a disability because the employer believed the plaintiff was impaired in his ability to
interact with others. On appeal, the court found that while it was unclear whether interacting with
others was a “major life activity” under the ADA, even if it was, the plaintiff’s claim failed
because of evidence that he threatened his co-workers, which justified his termination. Although
the inability to interact with others would almost certainly be deemed a disability under the
current understanding of the ADAAA and the recent EEOC regulations, the disabled employee
would remain unable to legally threaten his coworkers in a similar situation.
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An employer can avoid liability under the ADA for failure to provide such
accommodations by demonstrating: (1) that the employee’s disability poses a direct threat to the
employee’s health or safety in a manner that cannot be reasonably accommodated; or (2) that the
accommodation, even if reasonable, would impose an undue hardship on the employer’s business
operations. 29 C.F.R. §1630.15(b)(2) and 1630.9(a). Undue hardship is defined as an action
requiring significant difficulty or expense when considered in light of factors such as an
employer’s size, financial resources, and the nature and structure of its operation.
In Taylor v. Rice, 451 F.3d 898 (D.C. Cir. 2006), the court noted that whether a proposed
accommodation is reasonable and whether it imposes undue hardship are separate inquiries even
though both turn on the facts of the particular case. In Taylor, the State Department denied an
HIV-positive man a Foreign Service position based on its decision that he was unavailable for
worldwide assignment. The Court of Appeals for the District of Columbia reversed the district
court’s grant of summary judgment in favor of the State Department because there was not
enough evidence to show that his requested accommodations were unreasonable and would cause
undue hardship. See also U.S. Airways v. Barnett, 535 U.S. 391 (2002).
DEFINITION OF DISABILITY BROADENED
The determination of whether an individual is entitled to ADA protection hinges on
whether or not the individual suffers from a “disability” as defined by the Act. As stated above,
the ADA Amendments Act retains the definition of “disability”, which is defined as:
a) a physical or mental impairment that substantially limits one or more of the major life
activities of an individual;
b) a record of such an impairment; or
c) being regarded as having such an impairment.
Although the definition of disability remains the same, the ADAAA does state that “the
definition of disability … shall be construed in favor of a broad range of individuals under [the
ADA].” This provision was included in the Amendments Act in order to reinstate the broad scope
of protections originally afforded by the ADA, which, in Congress’ view, the Supreme Court had
improperly narrowed.
Consistent with the provisions of the ADA Amendments Act and Congress’ directive for
the EEOC to revise its ADA regulation to comply with the Act, the EEOC’s newly promulgated
regulation provides that the definition of “disability” shall be interpreted broadly.
PHYSICAL OR MENTAL IMPAIRMENT REQUIREMENTS AMENDED
A physical or mental impairment is defined by the Department of Health, Education and
Welfare as “any physiological disorder or condition, cosmetic disfigurement, or anatomical loss
affecting one or more of the following body systems: neurological; musculoskeletal; special sense
organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin and endocrine.” 45 C.F.R. §84.3(j)(2)(i). The newly issued
EEOC regulations also include disorders of the immune system and the circulatory system. To
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qualify as an ADA impairment, a physical impairment must be physiologically caused. See
EEOC v. Watkins Motor Lines, Inc., 463 F.3d 436 (6th Cir. 2006) (holding that a truck driver’s
morbid obesity was not an “impairment” under the ADA because he was not aware of any
physiological cause for his weight).
Merely having an impairment, however, does not render an individual “disabled” for
purposes of the ADA. Rather, a plaintiff must also demonstrate that the impairment “substantially
limits” a “major life activity.” Both terms are discussed in greater detail below.
The EEOC’s guidelines, which are not binding in courts, take an expansive view of the
role of the ADA with respect to mental impairments. For example, in the EEOC’s view, the
following qualify as a “disability”: major depression, anxiety disorders, and personality disorders.
Additionally, the guidelines state that a disability that results in an inability to concentrate or get
along with others is an impairment of a major life function.
LOOSENING OF “SUBSTANTIAL LIMITATION” REQUIREMENT
Under the ADA, a physical or mental impairment must “substantially limit” one or more
major life activities. The EEOC has issued its own regulations, which define the term
“substantially limits.” These regulations indicate that an impairment “substantially limits” a major
life activity if the impairment limits the person with the disability as compared to most people in
the general population. In making this assessment, one should look to the amount of time that the
activity takes as compared to most people in the general population, the presence or absence of
pain associated with the activity and the length of time that the person with the disability spends
completing the task as compared to most people in the population. Moreover, the EEOC dictates
that in determining whether an individual has a disability that substantially limits a major life
activity, the finder of fact is to focus on how a major life activity is limited and not on the
outcomes that the individual can achieve. For example, the EEOC provides the illustration of a
person with a learning disability who spends a great deal longer on his or her reading assignments
than a peer without such disability. In such a case, although the person may achieve a great deal
of academic success, he or she is nonetheless substantially limited in the major life activity of
reading.
Essentially, under the EEOC’s new guidelines, “substantially limits” means “unable to
perform a major life activity that most people in the general population can perform,” or
“restricted as to the condition, manner or duration under which an individual can perform a
particular activity as compared to the condition, manner, or duration under which most people in
the general population can perform that same major life activity.”
The ADA Amendments Act seeks to restore the protections of the ADA as originally
enacted by including several provisions that loosen the requirement that a physical or mental
impairment must “substantially limit” one or more major life activities. Moreover, the ADAAA
and the EEOC have clearly indicated that the question of whether a major life activity is
substantially limited should not demand extensive analysis.
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First, the Amendments Act rejects the Supreme Court’s requirement that the word
“substantially” be interpreted strictly to create a demanding standard for individuals seeking to
qualify as disabled. Furthermore, the Amendments Act eliminates the judicially created rule that
the word “substantially” should be read by courts as meaning “prevents or severely restricts.” As
such, the ADAAA significantly reduces the degree of impairment required for ADA protection.
Second, the Amendments Act establishes that an impairment that substantially limits a
major life activity need not limit other major life activities to be considered a disability.
Third, the Amendments Act clarifies that an impairment that is episodic or in remission is
a disability if it would substantially limit a major life activity when it is active. This provision
will likely serve to narrow a number of district court holdings stating that the ADA does not
protect persons who have erratic, unexplained absences, even when those absences are a result of
a disability. For instance, the holding in Waggoner v. Olin Corp., 169 F.3d 481 (7th Cir. 1999),
that an employee who experienced seizures was not a “qualified individual” under the ADA
because of her erratic attendance record, will likely be unpersuasive under the new provisions.
See also Hamm v. Exxon Mobile Corp., 223 Fed.Appx. 506, 508 (7th Cir. 2007) (holding that an
employee who could not demonstrate that he was able to regularly attend work could not be
considered a “qualified individual” for purposes of the ADA).
Finally, the ADAAA reinstated the previously held principle that when considering
whether an individual is protected by the Act, employers should not consider mitigating
circumstances. Specifically, the ADAAA provides that the determination of whether an
impairment substantially limits a major life activity shall be made without regard to the
ameliorative effects of mitigating measures such as medication, prosthetics, hearing aids, mobility
devices, and oxygen therapy equipment. This provision expressly supersedes Sutton v. United
Airlines, 527 U.S. 471 (1999), a case in which the Supreme Court held that the determination of
whether an impairment substantially limits a major life activity requires reference to the
ameliorative effects of mitigating measures. Moreover, the ADAAA amends the “Findings and
Purposes” section of the original ADA legislation to supersede Sutton v. United Airlines, 527 U.S.
471 (1999) and its companion cases of Murphy v. United Parcel Service, 527 U.S. 516 (1999) and
Albertson’s v. Kirkingburg, 527 U.S. 555 (1999), in addition to Toyota Motor Mfg., Kentucky,
Inc. v. Williams, 534 U.S. 184 (2002).
Nonetheless, there is an important exception to the ADAAA, which is that the
ameliorative effects of ordinary eyeglasses or contact lenses shall be considered in determining
whether an impairment substantially limits a major life activity. Specifically, the ADA
Amendments Act states that mitigating measures other than “ordinary eyeglasses or contact lenses
shall not be considered in assessing whether an individual has a disability.” The purpose of this
exception is to prevent claims of disability by the plethora of individuals who wear either ordinary
glasses or contact lenses.
The EEOC’s newly promulgated regulations are consistent with the ADAAA’s
interpretation of the substantial limitation requirement. First, as previously mentioned, the EEOC
amended its regulations regarding the term “substantially limits,” leading to a much more liberal
understanding of what can be considered a substantial limitation. This was done in order to
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effectuate Congress’ clear instruction that “substantially limits” is not to be misconstrued to
require the “level of limitation, and the intensity of focus” applied by the Supreme Court in
Toyota Motor Mfg., Ky v. Williams, 534 U.S. 134 (2002). Second, the regulations provide that
mitigating measures other than “ordinary eyeglasses or contact lenses” shall not be considered in
assessing whether an individual has a “disability”. Third, the regulations provide that an
impairment that is episodic or in remission is a disability if it would substantially limit a major
life activity when active.
MAJOR LIFE ACTIVITIES EXPANDED
To qualify as a disability under the ADA, a physical or mental impairment must
substantially limit “one or more major life activities.” Under the ADA, major life activities have
been defined as basic activities that the average person in the general population can perform with
little or no difficulty. The ADA Amendments Act expands the definition of “major life activities”
by including two non-exhaustive lists of such activities.
The expanded list of “major life activities” includes, but is not limited to, the following:
• caring for one’s self
• performing manual tasks
• everyday activities such as breathing, seeing, hearing, speaking, eating, sleeping, and
walking
• standing, lifting, and bending
• learning, reading, concentrating, thinking, and communicating
• working
The second list involves the introduction of major bodily functions, the operation of which
constitutes major life activities. The list includes, but is not limited to, the following:
• functions of the immune system
• normal cell growth
• functions involving the digestive, bowel, bladder, neurological, brain, respiratory,
circulatory, endocrine, and reproductive systems
Although influential, the EEOC’s lists of major life activities is not exclusive or binding in
courts. While courts look to these lists for guidance, the determination of whether an impairment
limits a major life activity is made on a case-by-case basis. Equal Employment Opportunity
Commission v. Lee’s Log Cabin, Inc., 436 F.Supp.2d 992 (W.D. Wis. 2006). However, it is
important to stress that Congress and the EEOC have made it clear that the focus of a claim
brought under the ADA should be whether the employer violated the statute and whether the
employer and employee engaged in the interactive process, not on the presence or absence of a
disability or whether such disability substantially limits a major life activity.
Also important, the ADAAA legislatively overruled the Supreme Court’s decision in
Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184 (2002), which held that the word
“major” in the context of the ADA “need[s] to be interpreted strictly to create a demanding
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standard for qualifying as disabled.” Through its enactment of the ADAAA, Congress explicitly
rejected this standard as contrary to the broad scope of protection that is available under the ADA.
“REGARDED AS” DISABILITIES CLARIFIED
The ADA prohibits discrimination against an individual who is “regarded as having such an
impairment.” Pursuant to this language, the ADA not only covers those who actually do have
impairments that substantially limit major life activities, but also covers individuals who are
perceived by their employer as having such impairments.
Traditionally, an employee claiming that his/her employer regarded the employee as
disabled within the meaning of the ADA had to prove that: (1) the employer mistakenly believed
that he/she had a physical impairment that substantially limited one or more major life activities,
or (2) the employer mistakenly believed that an actual, non-limiting impairment substantially
limited one or more major life activities. Ollie v. Titan Tire Co., 336 F.3d 680 (8th Cir. 2003).
The ADA Amendments Act, however, abrogates the requirement that an individual
claiming discrimination on the basis of a perceived disability must show that the impairment was
regarded as limiting a major life activity. Under the ADAAA, an individual only needs to show
that the employer regarded the condition as an impairment, and does not need to demonstrate that
the employer perceived the limitation of a major life activity.
The Amendments Act also provides that an individual subjected to an action prohibited by
the ADA (e.g., failure to hire) because of an actual or perceived impairment will meet the
“regarded as” definition of disability, unless the impairment is transitory and minor. Specifically,
the ADAAA provides that transitory and minor impairments that have an actual or expected
duration of less than six months are not considered disabilities under the “regarded as” prong of
the definition of disability. To qualify, such impairments must be both objectively transitory and
objectively minor.
Nevertheless, the ADAAA provides that, while individuals who are “regarded as” disabled
are protected from discrimination, employers are not required to provide reasonable
accommodations or make reasonable modifications to policies, practices, or procedures for
individuals who meet the “regarded as” prong of the definition of disability.
The EEOC’s regulations pertaining to the “regarded as” prong are reflective of the
amendments to the ADA. First, the regulations provide that the definition of “regarded as” no
longer requires a showing that the employer perceived the individual to be substantially limited in
a major life activity, and instead provides that an applicant or employee who is subjected to an
action prohibited by the ADA (e.g., failure to hire, denial of promotion, or termination) because
of an actual or perceived impairment will meet the “regarded as” definition of disability, unless
the impairment is both transitory and minor.
Second, the EEOC’ regulations provide that actions based on an impairment include
actions based on symptoms of an impairment. Third, the regulations provide that individuals
covered only under the “regarded as” prong are not entitled to reasonable accommodation.
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Fourth, they provide that qualification standards, employment tests, or other selection criteria
based on an individual’s uncorrected vision shall not be used unless shown to be job-related for
the position in question and consistent with business necessity.
QUALIFYING CONDITIONS UNDER THE ADA
Non-Binding Examples of Impairments the EEOC Believes Should Consistently
Meet the Definition of Disability
Interpreting the definition of disability broadly and without extensive analysis as required
under the ADA Amendments Act, the EEOC’s ADA regulations provide that some types of
impairments will consistently meet the definition of disability. According to the EEOC, because
of certain characteristics associated with these impairments, the individualized assessment of the
limitations on a person can be conducted quickly and easily, and will consistently result in a
determination that the person is substantially limited in a major life activity. However, employers
must remember that while the EEOC regulations may offer guidance, the Courts are not bound by
the EEOC’s regulations.
Examples of Impairments Which Do Not Consistently Meet the Definition of Disability
In addition to examples such as deafness, blindness, intellectual disability (formerly
termed mental retardation), partially or completely missing limbs, and mobility impairments
requiring the use of a wheelchair, which were previously included in the regulations, other
examples of impairments that the regulations provide will consistently meet the definition of
“disability” include, but are not limited to:
•
Amputation – which substantially limits the functioning of the musculoskeletal system;
•
Autism – which substantially limits major life activities such as communicating,
interacting with others, or learning;
•
Cancer – which substantially limits major life activities such as normal cell growth;
•
Cerebral palsy – which substantially limits major life activities such as walking,
performing manual tasks, speaking, or functions of the brain;
•
Diabetes – which substantially limits major life activities such as functions of the
endocrine system (e.g., the production of insulin);
•
Epilepsy – which substantially limits major life activities such as functions of the brain or,
during a seizure, seeing, hearing, speaking, walking, or thinking;
•
HIV or AIDS – which substantially limit functions of the immune system;
•
Lymphedema – which substantially limits the functions of the lymphatic system;
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•
Multiple sclerosis and muscular dystrophy – which substantially limit major life
activities including neurological functions, walking, performing manual tasks, seeing,
speaking, or thinking;
•
Major depression, bipolar disorder, post-traumatic stress disorder, obsessive
compulsive disorder, or schizophrenia – which substantially limit major life activities
including functions of the brain, thinking, concentrating, interacting with others, sleeping,
or caring for oneself;
•
Sickle Cell Disease – which substantially limits the functions of the immune system; and
•
Rheumatoid Arthritis – which substantially limits the musculoskeletal system.
The regulations provide that there is no negative implication from the omission of a
particular major life activity referenced in the regulation. Rather, an individual with one of the
impairments listed in the regulations may be substantially limited in one or more of the major life
activities identified, and/or may be substantially limited in other major life activities as well.
The EEOC’s regulations also caution that there is no negative implication from the
omission of particular impairments. The list of examples provided in the regulations is merely
intended to illustrate some of the types of impairments that are consistently substantially limiting.
Other types of impairments not specifically identified may also consistently be substantially
limiting, such as some forms of depression other than major depression and seizure disorders
other than epilepsy.
SPECIFIC EXCLUSIONS UNDER THE ADA
•
Illegal Drugs
Employees and applicants engaged in the illegal use of drugs are not “disabled” under the
Act when an employer acts on the basis of such use. 29 C.F.R. 1630.3. This exception applies to
both the use of illegal drugs and the unlawful use of prescription drugs. Employers may also hold
illegal drug users to the same performance standards as other employees.
Moreover, employers may seek reasonable assurance that no illegal drug use is either
currently occurring or has occurred so recently that its continuing use is a real and ongoing
problem. As such, tests for illegal drugs are not subject to the ADA’s restrictions on medical
examinations. Also, some employers may be able to establish a prohibition against hiring
individuals with a history of illegal drug use if that prohibition is job-related and consistent with
business necessity. For example, an employer whose employees are required to carry firearms
could likely establish such a policy without violating the Act. Typically such exceptions are
granted when the prohibition is safety-related.
However, employers should remain wary of “regarded as” situations. Employees or
applicants who are erroneously perceived as engaging in drug use, but are not in fact doing so, are
protected under the Act. The same holds true for individuals who are no longer illegally using
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drugs and have been either successfully rehabilitated or are currently involved in the rehabilitation
process.
•
Alcohol
While alcoholism can constitute a disability under the ADA, employers may still require
employees suffering from this condition to conduct themselves reasonably within the workplace.
Specifically, an employer may flatly prohibit the use of alcohol in the workplace and may prohibit
employees from being under the influence of alcohol while in the workplace. Additionally, an
employer may hold an alcoholic employee to the same job qualifications and performance and
behavioral standards to which it holds all other employees, even if any unsatisfactory
performance or behavior stems from the employee’s alcoholism.
•
Smoking
Employers are free to prohibit or impose restrictions upon smoking in the workplace.
These restrictions do not violate any portion of the ADA.
•
Other Personal Characteristics
The Department of Labor regulations also include a fairly extensive list of personal
characteristics which are excluded from the Act’s definition of “disability.” The following do not
constitute disabilities under the ADA:
• transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, gender identity
disorders not resulting from physical impairment, or other sexual behavior disorders;
• compulsive gambling, kleptomania, or pyromania; and
• psychoactive substance use disorders resulting from current illegal use of drugs.
Additionally, the ADAA and the EEOC regulations recognize that homosexuality and
bisexuality are not impairments, and thus cannot be considered disabilities under the Act.
QUALIFIED INDIVIDUALS
The ADA defines a “qualified individual” as an individual with a disability who, with or
without reasonable accommodation, can perform the essential functions of his or her
employment position. Written employment descriptions or job postings are considered evidence
as to the essential functions of a job, as long as the functions listed in such descriptions are
accurate and do not include tasks that are unrelated to the job. If the employee cannot perform
the essential functions of the job legitimately required by the employer, the employee is not a
“qualified individual” under the ADA.
Some courts have held that, in cases involving medical examinations and inquiries, an
individual without a disability may constitute a qualified individual under the ADA. Karraker v.
Rent-A-Center, Inc., 239 F.Supp.2d 828 (C.D. Ill. 2003). These courts have done so by relying on
the language of the ADA in Section 12112(d), which refers to “job applicants” and “employees,”
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rather than the more restrictive language of “qualified individual.” The court reasoned that it is
not logical to require an employee to show that he/she is disabled in order prevent his/her
employer from impermissibly inquiring as to whether the individual has a disability. In Karraker,
the court held that non-disabled employees could state a claim under the ADA against their
employers for requiring employees seeking managerial positions to take psychological profiling
tests.
REASONABLE ACCOMMODATIONS
An employer is required to make a reasonable accommodation to the known disability of a
qualified applicant or employee if it would not impose an “undue hardship” on the operation of
the employer’s business. According to the EEOC, reasonable accommodation may include, but is
not limited to:
• making existing facilities used by employees readily accessible to and usable by
persons with disabilities;
• job restructuring, modifying work schedules, or reassignment to a vacant position; or
• acquiring or modifying equipment or devices, adjusting or modifying examinations,
training materials, or policies, or providing qualified readers or interpreters.
The Supreme Court has held that a reasonable accommodation is one that “seems
reasonable on its face, i.e., ordinarily or in the run of cases.” U.S. Airways, Inc. v. Barnett, 535
U.S. 391 (2002). In offering this definition, the Court referred to the approach embraced by the
First Circuit in Reed v. LePage Bakeries, Inc., 244 F.3d 254 (1st Cir. 2001), as “practical.” Under
the analysis applied in Reed, a plaintiff bears the initial burden of showing not only that a
proposed accommodation would enable the employee to perform the essential functions of the
job, but also that it is facially feasible for the employer under the circumstances. If this is
accomplished, the burden then shifts to the employer to show that the proposed accommodation is
not as feasible as it appears, but rather that there are “further costs to be considered, certain devils
in the details.” The difference in the required showings essentially comes down to the specificity
required, with the plaintiff’s showing being more general in nature. See Barth v. Gelb, 2 F.3d
1180 (D.C. Cir. 1993) (explaining that a reasonable accommodation is a method of
accommodation that is reasonable in the run of cases, whereas the undue hardship inquiry focuses
on the hardships imposed by the plaintiff’s preferred accommodation in the context of the
particular employer’s operations); Vande Zande v. Wisc. Dep’t of Admin., 44 F.3d 538 (7th Cir.
1995) (stating that a plaintiff must make a facial showing of proportionality to costs, whereupon
an employer can prove that, upon more careful consideration, the costs of the proposed
accommodation in this instance are excessive).
A reasonable accommodation can include making existing facilities used by employees
readily accessible to and usable by individuals with disabilities; job restructuring; a part-time or
modified work schedule; reassignment; modification of equipment or devices; appropriate
adjustments or modifications to examinations, training materials or policies; and providing
qualified readers or interpreters. An employer need not create a new position or “bump” another
employee to allow the disabled employee to be reassigned, although there is currently a split
among the Circuits as to whether a qualified disabled employee must be reassigned to a vacant
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position. For instance, the Tenth and D.C. Circuits have held that a qualified disabled employee
must be reassigned, while the Eighth Circuit has held that the employee need only be provided the
opportunity to compete for the position. See Smith v. Midland Brake, Inc., 180 F.3d 1154, 116465 (10th Cir. 1999); Aka v. Washington Hospital Center, 156 F.3d 1284 (D.C. Cir. 1998); Huber v.
Walmart Stores, Inc., 486 F.3d 480 (8th Cir. 2007), cert granted in part, Huber v. Walmart
Stores, Inc., 128 S. Ct. 742 (2007).
Recently, in E.E.O.C. v. United Airlines, Inc., 693 F.3d 760, 761 (7th Cir. 2012), the
Seventh Circuit held that the ADA does indeed mandate that an employer appoint employees with
disabilities to vacant positions for which they are qualified, provided that such accommodations
would be ordinarily reasonable and would not present an undue hardship to that employer.
However, the ADA does not call for an employer to “set aside a pool of positions” for
recovering employees or make such positions available indefinitely to an employee whose
recovery has run its course without restoring that worker to his or her original state. Watson v.
Lithonia Lighting, 304 F.3d 749 (7th Cir. 2002) (finding an employer was not required to create a
light duty position indefinitely to accommodate an employee’s permanent injury). On the other
hand, an offer of reassignment to an inferior position does not constitute a reasonable
accommodation when a position is available with benefits and compensation similar to the
employee’s previous position. Norville v. Staten Island Univ. Hosp., 196 F.3d 89 (2d Cir. 1999).
Interactive Process Required
Both the employer and the employee seeking an accommodation must cooperate in the
interactive process of identifying a suitable accommodation. Haulbrook v. Michelin North Amer.,
252 F.3d 696 (4th Cir. 2001); E.E.O.C. v. Sears, Roebuck, & Co., 417 F.3d 789 (7th Cir. 2005).
Employers should maintain all employee requests for reasonable accommodations for a period of
at least two years. Employers are generally under no duty to make accommodations for an
employee’s disability unless the employee requests an accommodation. For example, in
Jovanovic v. In-Sink-Erator Div. of Emerson Electric Co., 201 F.3d 894 (7th Cir. 2000), the court
held that because the employee never requested an accommodation, the employer did not violate
the ADA when it terminated the employee, who had a chronic absentee record due to a medical
condition.
An employer is not required to honor a disabled employee’s request for accommodation
when the request conflicts with the employer’s bona fide seniority system. US Airways, Inc. v.
Barnett, 535 U.S. 391 (2002). In Barnett, the plaintiff injured his back while handling cargo for
the defendant. To accommodate the plaintiff’s disability, he was transferred to a position in a
mailroom, which was a less physically demanding position. When this position became open for
bidding under the terms of the defendant’s seniority plan, the plaintiff requested his
accommodation take precedent over the terms of the seniority system. The defendant refused to
make an exception to its seniority system, and the plaintiff lost the position. The court held that
an accommodation which requests an employer to make an exception to its long-established
seniority system is not reasonable. However, in such situations, the employee may still recover
under the ADA if he or she shows special circumstances that render the requested assignment
reasonable. The court’s holding was based on its refusal to interpret a “reasonable
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accommodation” as an effective accommodation, which solely concentrates on the employer’s
ability to meet the employee’s disability needs. The court refused to follow this interpretation,
because reasonable accommodations under the ADA do not require an employer to make
accommodations merely because it is possible for the employer to do so; rather, it requires the
employer’s “unprejudiced thought and reasonable responses to disabled individuals.”
Courts have also considered what constitutes a “vacant” position available for
reassignment of the employee. One court held that a position is only vacant where, at the time of
the accommodation request, the employer knows that the job opening exists or will exist in the
immediate future. Bristol v. Bd. of County Comm’s of the County of Clear Creek, 281 F.3d 1148
(10th Cir. 2002); vacated, in part on diff’t grounds by Bristol v. Bd. of County Comm’s of the
County of Clear Creek, 312 F.3d 1213 (10th Cir. 2002). The EEOC has stated that an employer
does not have to offer a job that it realizes will not become available for six months, because a
six-month period is beyond a reasonable amount of time.
In order for the employee to be entitled to a reasonable accommodation, one court has held
that it is imperative that the employee seeks an accommodation “because of” a disability. Felix v.
New York City Transit Auth., 324 F.3d 102 (2d Cir. 2003). In Felix, the plaintiff was employed as
a railroad clerk at a municipal transit agency. After a firebombing incident in the subway in 1995,
the plaintiff claimed that she suffered from insomnia and post-traumatic stress disorder and
requested an accommodation to work above ground because she feared working underground in
the subway. The court held that although insomnia may qualify as a disorder under the ADA, the
plaintiff’s requested accommodation did not flow from this disorder. Rather, it arose from her
fear of working underground, which was not a disability under the ADA. Therefore, the court
held that the employee’s requested accommodation to work above ground and not in the subway
was not a reasonable accommodation, because the accommodation was not “because of” a
disability as defined under the ADA. It is important to note that the discussion as to whether an
unusually great fear of working underground might be considered a disability under the current
understanding of the ADA following the ADAAA and the EEOC regulations would be much less
extensive.
The following are examples of accommodations that were held to be reasonable:
•
Transferring an employee to a different department or section that is better suited to
the employee’s condition. In Emerson v. Southern States Power Co., 256 F.3d 506
(7th Cir. 2001), the court held that a police district transferring a disabled police
officer to a district where he could take a desk job was a reasonable accommodation.
Although there were no desk jobs available at the district at which the officer sought to
work, the court held that the employee cannot dictate the employer’s choice of
alternative positions.
•
Allowing an employee with a back condition to work as a truck driver with a no-lifting
requirement. In Dilley v. Supervalu, Inc., 296 F.3d 958 (10th Cir. 2002), the court
held that a jury could find that a position with the lifting restriction was the functional
equivalent of the plaintiff’s former position.
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The following are examples of accommodations that were held to be unreasonable:
•
An industrial nurse’s request to be transferred from working for a supervisor whom
she regarded as “the trigger and stressor to her depression.” In Kennedy v. Dresser
Rand, 193 F.3d 120 (2d Cir. 1999), the court held that the plaintiff failed to overcome
the presumption under the ADA that a requested change of supervisor is unreasonable.
However, the court declined to issue a per se ruling that the replacement of a
supervisor could never be a reasonable accommodation under the ADA – although the
court did note that there is a presumption that a request to change supervisors is
unreasonable, and the burden of overcoming that presumption therefore lies with the
plaintiff.
•
Based on an employee’s sensitivity to chemicals, a request to only work in areas of the
plant where chemicals were sealed was not a reasonable accommodation where the
entire plant was exposed to open chemicals. Steffes v. Stepan Co., 144 F.3d 1070 (7th
Cir. 1997).
•
An employee’s request to transfer to one of the employer’s lighter-duty positions
originally created for individuals who are on temporary disability under the Indiana
Workers’ Compensation Statute. Dalton v. Subaru-Isuzu Auto. Inc., 141 F.3d 667 (7th
Cir. 1998).
•
An employee diagnosed with rectal cancer requesting permission to work entirely
from a home office. Rauen v. United States Tobacco Mfg. Ltd. Partnership, 319 F.3d
891 (7th Cir. 2003); But see Sturz v. Wisconsin Dept. of Corrections, 642 F.Supp.2d
881 (W.D. Wis. 2009) (distinguishing Rauen on the grounds that the plaintiff in Rauen
adduced no evidence that the lack of accommodation exacerbated her condition).
•
After exhausting available medical leave, an employee’s request for indefinite leave of
absence from employment to treat his condition of continuous cluster headaches, as
this would not allow the employee to continue or return to work in the near future.
Wood v. Green, 323 F.3d 1309 (11th Cir. 2003).
•
A high school student’s request for the school to make summer classes available to
him so he could make up time missed as a result of his asthma and heart valve
conditions and graduate with his class. The Doe v. Haverford Sch., 2003 WL
22097782 (E.D. Pa. 2003) decision reflected a tendency of courts to give judicial
deference to academic decisions of educational institutions. Courts will generally give
deference when “an educational institution considers alternative means, and the
feasibility, cost and effect on an academic program of the alternative means.” The
court found that requiring the school to make summer classes available would not be a
reasonable accommodation, because this would fundamentally alter the nature of the
school’s services.
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Requesting a Reasonable Accommodation
A general consensus exists among courts that, under most circumstances, the employee
must request an accommodation before a duty arises on behalf of the employer to provide one.
This is because, under the plain language of the ADA, employers are obligated to reasonably
accommodate only the physical or mental limitations resulting from a disability that are known to
the employer. Consequently, in its interpretive guidance on the ADA, the EEOC stated, “an
employer would not be expected to accommodate disabilities of which it is unaware.” Further, “it
is the responsibility of the individual with a disability to inform the employer that an
accommodation is needed.”
However, employers should be aware that exceptions to this general rule exist that might
create an affirmative duty to provide a reasonable accommodation on behalf of an employee, even
absent a specific request by the disabled employee. For example, in Fliss v. Movado Group, Inc.,
2000 WL 1154633 (N.D. Ill. 2000), an employee who did a significant amount of traveling as part
of her job presented the employer with a note from her doctor which stated that she could not
stand or sit for longer than 30-minute increments. Based on this, the employer believed the
employee would not be able to travel in planes and terminated the employee. The employer
argued that the employee never made a request for accommodation. However, the court held that
the doctor’s note could be viewed as a request for accommodation and held against the employer.
Additionally, in cases where an employer knows of both an employee’s disability and a
resulting need for an accommodation, some courts have indicated that the employer might have
an obligation to provide the accommodation even if the employee has not specifically requested
it. See Smith v. Henderson, 376 F.3d 529 (6th Cir. 2004). In Henderson, the plaintiff’s employer
knew she had a disability because it had previously provided her a reasonable accommodation
several years earlier so she could perform the duties of her position. However, upon the plaintiff’s
promotion, the employer refused to keep the accommodation in place. The plaintiff requested that
she be allowed to delegate some responsibilities of her position. The court held that, although this
request did not specifically use the word “accommodation,” the facts illustrated that the employer
was clearly aware of the plaintiff’s disability and her need for a reasonable accommodation.
Therefore, the employer could not avoid liability merely by citing the plaintiff’s failure to
specifically request an accommodation.
This situation may also arise where the visible symptoms of an employee’s disability are
so obviously manifestations of an underlying disability that it would be reasonable for the
employee to infer that his employer actually knew of the disability. Hedberg v. Ind. Bell Tel. Co.,
47 F.3d 928 (7th Cir. 1995). As that court phrased it, “deliberate ignorance [should not] insulate
an employer from liability.” However, an employer should be cautious when approaching an
employee who the employer deems in need of an accommodation. If the employer makes it clear
that he or she believes that the employee needs an accommodation, the employee becomes
covered under the “regarded as” prong of the ADA.
Some courts will impose liability absent a request for an accommodation where such a
request would constitute a “futile gesture.” Davoll v. Webb, 194 F.3d 1116 (10th Cir. 1999). The
futile gesture doctrine originates from the Supreme Court’s decision in Int’l Bhd. Of Teamsters v.
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United States, 431 U.S. 324 (1977), in which the Court recognized that “a consistently enforced
discriminatory policy can surely deter job applications from those who are aware of it and are
unwilling to subject themselves to the humiliation of explicit and certain rejection.” The
Teamsters opinion was issued in the context of a racial discrimination claim arising under Title
VII of the Civil Rights Act. However, the logic of Teamsters has been found to similarly apply to
ADA claims. Specifically, if an employer has a set policy against a particular type of reasonable
accommodation or against such accommodations generally, and a qualified employee knows of
the policy, the employee is not required to make a request he/she knows will surely be denied.
However, the doctrine is applicable only “in the rare case where an employer has essentially
foreclosed the interactive process through its policies or explicit actions.”
The EEOC’s guidance addressing mental disabilities also creates a liberal standard
regarding what an employee must do to adequately request an accommodation. The guidelines
state that an employee need not be explicit in requesting a reasonable accommodation, but may
merely ask for an accommodation because of a medical reason. The guidelines then place the
burden on the employer to ask the employee for documentation regarding the impairment and
requested accommodation. Additionally, the guidelines give instructions on what may be
necessary on the employer’s part to accommodate mental disabilities. These suggested
accommodations include providing a quieter place to work or changing the methods of
supervising the employee.
Requesting Documentation of Disability
Employers may require an employee requesting reasonable accommodations to provide
documentation that is sufficient to substantiate that the employee has a disability under the ADA
and needs the reasonable accommodation requested. However, employers cannot ask for
unrelated documentation. This means that in most circumstances, an employer cannot ask for an
employee’s complete medical records, because they are likely to contain information unrelated to
the disability at issue and the need for accommodation.
According to the EEOC’s guidelines, documentation is sufficient if it: (1) describes the
nature, severity, and duration of the employee’s impairment, the activity or activities that the
impairment limits, and the extent to which the impairment limits the employee’s ability to
perform the activity or activities; and (2) substantiates why the requested reasonable
accommodation is needed.
An employer may require an employee to go to an appropriate health care professional of
the employer’s choosing if the employee provides insufficient documentation from his/her
treating physician (or other health care professional) to substantiate that he/she has an ADA
disability and needs a reasonable accommodation. However, if an employee provides insufficient
documentation in response to the employer’s initial request, the employer should explain why the
documentation is insufficient and allow the employee an opportunity to provide the missing
information in a timely manner. The employer should also consider consulting with the
employee’s doctor (with the employee’s consent) before requiring the employee to go to a health
care professional of its choice.
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The EEOC’s guidelines state that documentation is insufficient if it does not specify the
existence of an ADA disability and explain the need for reasonable accommodation.
Documentation also might be insufficient where, for example: (1) the health care professional
does not have the expertise to give an opinion about the employee’s medical condition and the
limitations imposed by it; (2) the information does not specify the functional limitations due to the
disability; or (3) other factors indicate that the information provided is not credible or is
fraudulent. If an employee provides insufficient documentation, an employer does not have to
provide reasonable accommodation until sufficient documentation is provided.
Accommodating “Regarded As” Disabilities
Until recently, courts had been split as to whether an individual “regarded as” having a
disability is entitled to reasonable accommodations under the ADA. The basis for arguing against
a duty to accommodate in such situations is that because the employee is not actually disabled,
there is no disability for the employer to accommodate. Kaplan v. City of North Las Vegas, 323
F.3d 1226 (9th Cir. 2003). The majority of courts have concluded that employees with “regarded
as” disabilities are not entitled to reasonable accommodations from employers. The ADA
Amendments Act clarifies this issue and provides that individuals covered only under the
“regarded as” prong are not entitled to reasonable accommodation.
UNDUE HARDSHIPS
An employer does not have to provide a reasonable accommodation that would cause an
“undue hardship” to the employer. Undue hardship must be based on an individualized
assessment of current circumstances that show that a specific reasonable accommodation would
cause significant difficulty or expense. As such, generalized conclusions will not suffice to
support a claim of undue hardship. A determination of undue hardship should be based on several
factors, including:
• the nature and cost of the requested accommodation;
• the overall financial resources of the facility making the accommodation, the number of
persons employed at the facility, and the effect of the proposed accommodation on the
facility’s expenses and resources;
• the type and location of the employer’s facilities (if the facility involved in the
reasonable accommodation is part of a larger entity);
• the type of operation of the employer, including the structure and functions of the
workforce, the geographic separateness, and the administrative or fiscal relationship of
the facility involved in making the accommodation; and
• the impact of the accommodation on the operation of the facility.
When assessing whether a particular accommodation would be too costly, the ADA’s
legislative history indicates that Congress wants employers to consider all possible sources of
outside funding. According to the EEOC’s guidelines, undue hardship is determined based on the
net cost to the employer. Thus, an employer should determine whether funding is available from
an outside source, such as a state rehabilitation agency, to pay for all or part of the
accommodation. In addition, the employer should determine whether it is eligible for certain tax
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credits or deductions to offset the cost of the accommodation. Also, to the extent that a portion of
the cost of an accommodation causes undue hardship, the employer should ask the individual with
a disability if he/she will pay the difference.
If an employer determines that one particular reasonable accommodation will cause undue
hardship, but a second type of reasonable accommodation will be effective and will not cause
undue hardship, then the employer must provide the second accommodation.
Further, an employer cannot claim undue hardship based on employees’ (or customers’)
fears or prejudices toward the individual’s disability, nor can undue hardship be based on the fact
that providing a reasonable accommodation might have a negative impact on the morale of other
employees. However, employers may be able to show undue hardship where providing a
reasonable accommodation would be unduly disruptive to other employees’ ability to work.
In US Airways, Inc. v. Barnett, 535 U.S. 391 (2002), the Supreme Court laid out the
burdens of proof for employees with a disability and their employers in an ADA lawsuit alleging
failure to provide reasonable accommodation. To defeat a defendant/employer’s motion for
summary judgment, the plaintiff/employee need only show that an accommodation seems
reasonable on its face, i.e., ordinarily or in the run of cases.”
Once an employee has shown that the accommodation he/she needs is “reasonable,” the
burden shifts to the employer to provide case-specific evidence proving that reasonable
accommodation would cause an undue hardship in the particular circumstances. The Supreme
Court’s burden-shifting framework does not affect the interactive process triggered by an
individual’s request for accommodation. Thus, an employer should still engage in this informal
dialogue to obtain relevant information needed to make an informed decision.
HOSTILE WORK ENVIORNMENT & HARASSMENT CLAIMS
Employees may also bring ADA claims against an employer for a hostile work
environment or disability-based harassment.
For example, in Fox v. General Motors, Corp., 247 F.3d 169 (4th Cir. 2001), the court held
that employees can bring a cause of action for a hostile work environment under the ADA where
the employees were subjected to supervisors berating and harassing them with vulgar and profane
language, encouraging other employees to ostracize them, and requiring them to perform tasks
beyond medical restrictions. Likewise, in Flowers v. Southern Regional Physicians Services, Inc.,
247 F.3d 229 (5th Cir. 2001), the court held that an employee can bring a cause of action for
disability-based harassment under the ADA where the HIV-positive employee’s supervisors
stopped socializing with her almost immediately after learning of her condition, forced her to take
numerous random drug tests, gave her negative performance appraisals for the first time and lured
her into an adversarial meeting on false pretenses.
Courts have construed the following conduct by employers to violate the ADA:
•
An airline company revoking an offer of employment as a line mechanic to an
individual because he had a hearing impairment. See Sprague v. United Airlines, Inc.,
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2002 WL 1803733 (D. Mass. 2002). The court held that the employer violated the
ADA because the plaintiff, although hearing-impaired, could still perform the essential
functions of the position.
•
A city’s police department transfer policy, which required that officers must have
performed patrol service the preceding year in order to obtain a specialized
assignment. See Cripe v. City of San Jose, 261 F.3d 877 (9th Cir. 2001). The court
held that this qualification standard screened out a class of individuals with disabilities
and therefore was lawful under the ADA only if it was job-related and consistent with
a business necessity. However, the court found that the city was using its
reassignment policy to segregate employees with disabilities by forcing them into
undesirable positions or facilities, in contravention of the ADA.
•
An employer’s refusal to accommodate an employee whose epilepsy prevented her
from driving. See Lovejoy-Wilson v. Noco Motor Fuel, Inc., 263 F.3d 208 (2d Cir.
2001). The court found that the employee was capable of performing the position of
assistant store manager and that allowing her to find other means to make bank
deposits, other than driving herself to the bank, would not impose an undue burden on
her employer.
Courts have found that the following scenarios do not violate the ADA:
•
A municipal village firing a police officer after he failed to properly control his
diabetes and lost control of his vehicle as a result of a diabetic reaction. See Siefken v.
Village of Arlington Heights, 65 F.3d 664 (7th Cir. 1995). The plaintiff did not require
any accommodation to perform his job; all that was required was that the plaintiff
adequately monitor his condition, which he failed to do. But see Paine ex re Eilman v.
Johnson, 2010 WL 785397 (N.D. Ill. 2010) (noting that, when a plaintiff brings an
ADA claim against a “public entity,” there is no requirement that he/she prove that
he/she was meeting the employer’s legitimate job expectations. Rather, such an
employee need only demonstrate that he/she is a qualified individual (one who meets
the essential eligibility requirements for receipt of services from the public entity),
he/she has a disability, and he/she was subjected to discrimination by the public
entity).
•
An employer was not liable for firing an employee with epilepsy where the evidence
showed that the employee worked with dangerous equipment and was a hazard to
himself and others on the job. See Moses v. Amer. Nonwovens, Inc. 97 F.3d 446 (11th
Cir. 1996). The employee also failed to show that the employer could have made
reasonable accommodations for his condition.
•
An employee’s inability to work for a particular supervisor because of anxiety and
stress caused by that supervisor. See Weiler v. Household Finance Corp., 101 F.3d 519
(7th Cir. 1996). The court based its decision on the notion that anxiety and stress
caused by a supervisor do not “substantially limit” a major life activity and therefore
do not qualify as a disability. However, the Second Circuit has stated that cases
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involving requests for transfer to a different supervisor will be considered on a caseby-case basis. See Kennedy v. Dresser Rand Co., 193 F.3d 120 (2d Cir. 1999).
Moreover, following the ADAAA and the EEOC Regulations regarding the Act, it is
much more likely that an individual asserting anxiety and stress would be considered
“disabled” for the purposes of the ADA.
•
The Seventh Circuit is clear that a personality conflict between a plaintiff and a
supervisor or co-worker does not establish a disability even if it produces anxiety or
depression. Schneiker v. Fortis Insurance Co., 200 F.3d 1055 (7th Cir. 2000).
Importantly, this decision was rendered before the ADAAA, and a contemporary
court’s analysis would place a much slighter emphasis on the presence or absence of a
substantially limiting disability.
•
A special education teacher diagnosed with paranoia was not substantially limited in
the major life activity of working because although she could no longer teach severely
retarded students, she did continue teaching as a regular education teacher. See
Patterson v. Chicago Ass’n for Retarded Citizens, 150 F.3d 719 (7th Cir. 1998).
•
An employer’s refusal to reassign a transportation analyst after it had already made
accommodations of reducing work hours, changing job requirements, and allowing
flexible work conditions after returning from disability leave to treat the employee’s
depression. See Burchett v. Target Corp., 340 F.3d 510 (8th Cir. 2003). The court
stated that “reassignment is an accommodation of last resort which does not become
necessary unless it is the only accommodation that will enable an employee to
continue working for the employer.” The court concluded that the plaintiff failed to
show that she was unable to perform the essential duties of her position, and therefore
the employer did not violate the ADA by refusing her request for a reassignment.
CONSTRUCTIVE DISCHARGE
In order to recover under the ADA, an employee must show some type of adverse
employment action. If the employee has resigned from the position, the employee is generally
incapable of showing an adverse employment action. However, if the circumstances that gave rise
to the resignation gave the employee no choice but to resign, the employee may still recover
under a theory of constructive discharge. Fenney v. Dakota, Minnesota & Eastern RR Co., 327
F.3d 707 (8th Cir. 2003).
In order to succeed under a constructive discharge theory, the employee must subjectively
believe that the work environment is abusive and show that a reasonable person would have found
the conditions of the employment so intolerable that the employer intended for the employee to
resign or could reasonably foresee that the employee would resign as a result of the conditions.
See Veitch v. England, 2006 WL 3408196 (D.C. Cir. November 28, 2006) (noting that the
constructive discharge inquiry is objective and “the mere existence of workplace discrimination is
insufficient” to establish a constructive discharge claim). In Fenney, discussed supra, an on-call
locomotive engineer with restrictive use of his right hand accepted a weekend contractor position
after the railroad company refused his request for more call time. The court held that the
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employee provided sufficient evidence of a constructive demotion to present sufficient facts to
show a violation of the ADA.
It should be noted that the Seventh Circuit has not yet squarely addressed the issue of
whether a claim of constructive discharge caused by a hostile work environment is cognizable
under the ADA. EEOC v. Sears, Roebuck & Co., 233 F.3d 432 (7th Cir. 2000). However, every
circuit that has addressed the issue has found that the ADA supports hostile work environment
claims. Moreover, the Seventh Circuit has indicated that such a claim is likely conceivable,
despite the fact that the Circuit has yet to determine that a plaintiff alleging constructive discharge
under the ADA is entitled to relief. See e.g. Rooney v. Koch Air, LLC, 410 F.3d 376 (7th Cir.
2005) (detailing the elements that must be proven in order to prevail on a constructive discharge
allegation under the ADA).
RETALIATION
It is also unlawful to retaliate against an individual for opposing employment practices
that discriminate based on disability or for filing a discrimination charge, testifying, or
participating in any way in an investigation, proceeding, or litigation under the ADA.
REVERSE DISCRIMINATION
To the benefit of employers, the ADA Amendments Act makes clear that there is no such
thing as a reverse disability discrimination claim. Such claims of reverse disability discrimination
have arisen where non-disabled employees claim that they should receive the same reasonable
accommodations that disabled employees have received. The ADAAA clarifies that such a set of
facts does not state a cognizable claim under the ADA.
AFFIRMATIVE DEFENSE – DIRECT THREAT TO SAFETY
The Supreme Court has recently affirmed the EEOC’s authority to allow an employer to
refuse to hire or discharge a disabled individual because the individual would endanger his/her
own health or the health of others in performing the job responsibilities of the position. Chevron
USA Inc. v. Echazabal, 536 U.S. 73 (2002). The argument that the employee or job applicant
poses a direct threat to the safety or health of him/herself or that of others is an affirmative
defense, and therefore the employer bears the burden of establishing this defense. Echazabal v.
Chevron USA Inc., 336 F.3d 1023 (9th Cir. 2003). The employer must show that based on its
consideration of the “severity, imminence, and potential likelihood of harm,” a significant risk of
substantial harm to the applicant or others exists. Speculative or remote risks are insufficient to
support this defense.
ASSOCIATIONAL DISCRIMINATION
The statutory language of the ADA permits a claim of associational discrimination.
Indeed, the statute prohibits discrimination because of the known disability of an individual with
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employee based on an assumption that the employee will be absent from work frequently to care for his or her spouse.
In, Larimer v. International Business Machines Corp., 370 F.3d 698 (7th Cir. 2004), the
Seventh Circuit outlined three categories into which “association discrimination” plaintiffs
generally fall. The Seventh Circuit called them: (1) expense; (2) disability by association; and (3)
distraction. In the “expense” scenario, the court noted that an employee who is fired because her
spouse has a disability that is costly to the employer (i.e., the employee’s spouse is covered by the
company’s health plan) is within the intended scope of the “associational discrimination” section
of the ADA. The Seventh Circuit also recognized such claims in Dewitt v. Proctor Hosp., 517
F.3d 944 (7th Cir. 2008).
BURDENS OF PROOF
The ADA prohibits discrimination “because of” an individual’s disability. As a result,
some courts have held an employee may not recover under the ADA unless the conduct at issue
was solely because of the employee’s disability. Hedrick v. W. Reserve Care Syst., 355 F.3d 444
(6th Cir. 2004). The majority of the other circuits, however, have held that the proper causal
standard is a “motivating factor” standard. See Head v. Glacier Northwest, Inc., 413 F.3d 1053
(9th Cir. 2005); Pinkerton v. Spellings, 529 F.3d 513 (5th Cir. 2008); Foster v. Arthur Andersen,
LLP, 168 F.3d 1029 (7th Cir. 1999). Under this standard, recovery is allowed if an adverse
employment decision is motivated even in part by a disability-based animus.
Recently, however, in Lewis v. Humboldt Acquisition Corp., Inc., 681 F.3d 312 (6th Cir.
2012), the Sixth Circuit applied the Supreme Court’s reasoning in Gross v. FBL Financial
Services, Inc., interpreting the Age Discrimination in Employment Act, and reiterated the position
that the mixed motive analysis does not apply in ADA cases, and that plaintiff’s must prove that
the adverse action would not have occurred but for the disability.
Despite this split, it is clear that an employer cannot face liability under the ADA for
discrimination if it had no knowledge of the employee’s disability. Hedberg v. Ind. Bell Tel. Co.,
Inc., 47 F.3d 928 (7th Cir. 1995). This result is a logical conclusion based on the ADA’s “because
of” language. Consequently, if an employer did not have knowledge of an employee’s disability,
the conduct at issue must have occurred “because of” some other reason. Nevertheless,
employers should be cautious on this point, as the issue of “knowledge” is rarely undisputed and
is often difficult to prove.
In addition to direct evidence of discrimination, courts also employ the McDonnell
Douglas burden-shifting scheme for discrimination cases brought under the ADA. See Timmons
v. General Motors Corp., 469 F.3d 1122 (7th Cir. 2006) (explaining the methods by which a
plaintiff can prove a discrimination claim under the ADA). Pursuant to this scheme, the plaintiff
must first present a prima facie case of discrimination. Once the plaintiff has done so, the burden
then shifts to the employer to articulate a legitimate, nondiscriminatory purpose for its
employment action. If the employer is capable of satisfying this burden, the presumption of
intentional discrimination disappears, but the plaintiff may still prove disparate treatment by
showing that the employer’s explanation is pretextual. Under this approach, the Supreme Court
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held in Raytheon Co. v. Hernandez, 540 U.S. 44 (2003) that an employer’s policy of refusing to
hire former employees who were previously terminated for violating conduct rules in testing
positive for drug abuse, constituted a legitimate, nondiscriminatory reason for its employment
actions so as to show that its conduct was not based on the employee’s disability.
However, if an employer has articulated multiple nondiscriminatory reasons for its
employment action, a showing by the plaintiff that one of the reasons is pretextual is not enough.
Bodenstab v. County of Cook, 569 F.3d 651 (7th Cir. 2009). In Bodenstab, a doctor was
discharged for threatening his co-workers, posing a direct threat to others, and failing to qualify
for his position as an anesthesiologist. The court held that the discharge was valid, even though
the employer may have improperly determined that the employee posed a direct threat to others.
The court noted that the showing of pretext was not sufficient, as the employer had offered other
legitimate, nondiscriminatory reasons for the discharge.
Additionally, as with other discrimination statutes, close temporal proximity between an
employee alerting an employer to a disability and that employee’s termination can serve as
evidence of discrimination. However, that showing alone is insufficient evidence of pretext under
the McDonnell Douglas analysis. Yudkovitz v. Bell Atl. Corp., 2004 WL 178330 (E.D. Pa. 2004).
The plaintiff in Yudkovitz suffered from multiple sclerosis and would have occasional “flare-ups.”
He was terminated less than a month after alerting his superiors to his condition. However, his
employer had also documented poor work performance by the employee for almost nine months
prior to the employer learning of the plaintiff’s medical condition. Consequently, the timing of
his termination alone was simply not enough to rebut the legitimate, nondiscriminatory reason for
his termination presented by his employer.
EFFECTS OF SOCIAL SECURITY TOTAL DISABILITY BENEFITS CLAIM ON AN
ADA CLAIM
According to the Supreme Court, a person who has filed an application for Social Security
benefits claiming “total disability” is not absolutely prohibited from thereafter filing a
discrimination claim under the ADA, claiming to be able to work. Cleveland v. Waste
Management Sys., 526 U.S. 795 (1999). Rather, a person claiming discrimination under the ADA
is entitled to explain how he or she can be “totally disabled” for disability benefits purposes while
also claiming to be able to perform essential job functions for ADA purposes. The ultimate result
of the Court’s decision is that the receipt of disability benefits does not automatically prevent a
recipient from pursuing an ADA claim. However, to survive a summary judgment motion, an
ADA plaintiff cannot ignore her disability benefit contentions that she is too disabled to work, but
must explain how that contention is consistent with her ADA claim that she can perform the
essential functions of her job, at least with a reasonable accommodation.
Nonetheless, the Seventh Circuit has held, “[c]ontradictions are unacceptable: a person
who applied for disability benefits must live with the factual representations made to obtain them,
and if these show inability to do the job then an ADA claim my [sic] be rejected without further
inquiry.” Opsteen v. Keller Structures, Inc., 408 F.3d 390 (7th Cir. 2005). Shortly after its ruling
in Opsteen, the Seventh Circuit upheld a summary judgment ruling against an ADA claimant who
had asserted on his Social Security Disability Insurance benefit application, “unable to work
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because of [his] disabling condition.” Johnson v. Exxonmobil Corp., 426 F.3d 887, 890 (7th Cir.
2005). Nevertheless, these determinations will continue to be made by courts on a fact-intensive,
case-by-case basis.
MEDICAL EXAMINATIONS
A medical examination cannot be required prior to employment. However, an employer
may require a medical exam after an offer of employment has been made, and the offer of
employment may be conditioned on the results of the exam, if:
•
•
all entering employees are subjected to a medical exam; and
information obtained regarding the applicant’s medical condition is collected and
maintained separately in a confidential medical file.
Supervisors and managers may be informed of medical restrictions on work or duties, and
first aid personnel may also be informed, when appropriate, if an employee’s disability may
require medical treatment.
An employer may not require a medical exam to determine whether an employee has a
disability or to determine the nature or severity of the disability unless such inquiry is shown to be
job-related. However, one court upheld the employer’s practice of having job applicants sign a
release in application materials that explained the company’s policy of requiring physical
examinations and access to the employees’ medical records. Green v. Joy Cone Co., 278
F.Supp.2d 526 (W.D. Pa. 2003). The court upheld the practice because the form did not actually
inquire into the applicant’s medical history or require disclosure of any disabilities. Also, the
release was placed with application materials out of convenience and the employer did not obtain
medical information until after a conditional offer of employment.
One court recently held that an individual does not have to have a disability under the
ADA in order to bring suit against an employer for an improper medical inquiry. Karraker v.
Rent-A-Center Inc., 239 F.Supp.2d 828 (C.D. Ill. 2003). Rather, relying on dicta from Murdock v.
Washington, 193 F.3d 510 (7th Cir. 1999) as well as unanimous precedent from the three other
circuits to consider the issue, the court in Karraker determined that, because the statute refers to
“job applicants” and “employees” when discussing the ability to bring suit for improper medical
inquiry rather than the more restrictive term, “qualified individual with a disability,” any person
should be able to allege such a claim.
Courts have held that it is permissible under the ADA to require an employee seeking to
return to work after treatment for a disability to undergo a medical assessment of his/her
capability to perform essential job functions. These rulings are in accord with EEOC guidelines
which permit employers to require employees to undergo medical examinations to determine
whether the employees are fit to perform the essential functions of the job, as long as the
examinations are job-related and consistent with business necessity.
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PRE-EMPLOYMENT INQUIRIES
An employer may ask a prospective employee if he/she is capable of performing the
essential functions of the position, with or without reasonable accommodation. However, an
employer should not ask an employee if he/she has a disability.
The EEOC has articulated in detail what is and is not considered a disability-related
inquiry under the ADA. A “disability-related inquiry” is a question or series of questions that is
likely to elicit information about a disability. Questions that are not likely to elicit information
about a disability are not disability-related inquiries and, therefore, are not prohibited under the
ADA.
Impermissible disability-related inquiries may include the following:
• asking an employee whether s/he has (or ever had) a disability, asking how s/he
became disabled, or inquiring about the nature or severity of an employee's disability;
• asking an employee to provide medical documentation regarding his/her disability;
• asking an employee’s co-worker, family member, doctor, or another person about the
employee’s disability;
• asking about an employee’s genetic information;
• asking about an employee’s prior workers’ compensation history;
• asking an employee whether s/he is currently taking any prescription drugs or
medications and/or whether s/he has taken any such drugs or medications in the past, or
monitoring an employee’s taking of such drugs or medications; and
• asking an employee a broad question about his/her impairments that is likely to elicit
information about a disability (e.g., What impairments do you have?).
Permissible questions include the following:
• asking generally about an employee’s well-being (e.g., How are you?), asking an
employee who looks tired or ill if s/he is feeling okay, asking an employee who is
sneezing or coughing whether s/he has a cold or allergies, or asking how an employee
is doing following the death of a loved one or the end of a marriage/relationship;
• asking an employee about non-disability-related impairments (e.g., How did you break
your leg?);
• asking an employee whether s/he can perform job functions;
• asking an employee whether s/he has been drinking;
• asking an employee about his/her current illegal use of drugs;
• asking a pregnant employee how she is feeling or when her baby is due; and
• asking an employee to provide the name and telephone number of a person to contact
in case of a medical emergency.
LAST CHANCE AGREEMENTS
A last chance agreement is an agreement entered into between an employee and an
employer that states that if the employee engages in certain conduct, his or her employment will
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terminate. Employers have utilized “last chance agreements” with employees violating company
policies or rules. These agreements are commonly used with employees returning to work after
completing a drug rehabilitation program. The employer will typically have the employee sign an
agreement stating that if the employee fails a drug test in the future, the employer will
immediately discharge the employee from his/her position. One court has held that last chance
agreements do not violate the ADA. In Longen v. Waterous Co., 347 F.3d 685 (8th Cir. 2003), the
court considered the last chance agreement to be a valid contract supported with consideration and
held that it did not violate the ADA because it merely subjected the employee to different
conditions than those imposed on other employees.
ENFORCEMENT AND DAMAGES
The ADA is enforced in the employment realm by the EEOC. Damages are capped based
on employer size as follows (although juries are not informed of these caps):
Number of Employees
Damages Cap
15 - 100
101 - 200
201 - 500
501 and more
$50,000
$100,000
$200,000
$300,000
However, the caps stated above do not prevent a plaintiff from recovering damages in
excess of the capped amounts if the plaintiff brings a state law claim that is essentially identical to
the federal ADA claim. Gagliardo v. Connaught Lab., Inc., 311 F.3d 565 (3d Cir. 2002). A state
may provide a remedy which is greater than or equal to that provided to plaintiffs under the ADA,
and such remedies are not capped by the ADA.
The following types of damages may be awarded to an individual discriminated against in
violation of the ADA:
•
•
•
•
compensatory damages
punitive damages
back pay
front pay
In Flowers v. Komatsu Mining Systems, 165 F.3d 554 (7th Cir. 1999), the Seventh Circuit
held that when an employer violates the ADA, an employee is only entitled to recover back pay
for the period during which the employee could have performed her duties for the employer. The
Flowers court further held that a back pay award covering the entire period from the discharge to
the time of trial was an abuse of discretion, as there were times when the plaintiff clearly could
not work with or without accommodations.
Punitive damages are available where an employer violates the ADA with the “knowledge
that it may be acting in violation of federal law.” Kolstad v. American Dental Ass’n, 527 U.S. 526
(1999). Additionally, punitive damages may be awarded where the employer displayed a reckless
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indifference toward the employee’s condition. Gagliardo v. Connaught Laboratories, Inc., 311
F.3d 565 (3d Cir. 2002).
EEOC NUANCES UNDER THE ADA
Recordkeeping Requirements
The EEOC has not adopted any generally applicable recordkeeping requirements for
purposes of the ADA. 29 C.F.R. 1602.12. However, where records are kept, the Act does place
some restrictions on how those records are to be maintained.
Under the ADA, all information obtained by an employer relating to an employee’s medical
condition(s) or medical history must be maintained on separate forms and in separate, confidential
medical files. 42 U.S.C. 12112(d)(3)(B); 29 C.F.R. 1630.14. Access to this information must be
limited to supervisors or managers who need information on necessary work-duty restrictions,
first aid or safety personnel where the disability might require emergency treatment, and
governmental officials investigating compliance with the ADA. As a rule of thumb, it is wise for
employers to deny access to medical information to any employee in charge of personnel
decisions. Also, covered employers must maintain records made in the normal course of business
for one year. Cautious employers will consider this a minimum.
Medical Confirmation of an Employee’s Disability
As stated above, employers can seek medical confirmation of an employee’s claimed
disability before rendering any form of accommodation. The EEOC has recognized that an
employer is entitled to know that an employee has a covered disability that requires reasonable
accommodation under the Act. Consequently, where the employee’s disability or need for
accommodation is not known or obvious, an employer may request medical documentation
regarding the employee’s disability and the functional limitations it creates which require
accommodation. The documentation provided by an employee in response to such a request will
be deemed sufficient if it: (1) describes the nature, severity, and duration of the employee’s
impairment, the activity or activities the impairment limits, and the extent to which the
impairment limits the employee’s ability to perform the activity or activities; and (2) substantiates
why the requested reasonable accommodation is needed.
If an employee fails to provide sufficient documentation in response to an employer’s
request, the employer may require the employee to go to a health care professional of its
choosing. However, the EEOC suggests an employer try two other courses of action before
choosing a medical professional of its own. The EEOC recommends first explaining to the
employee why the documentation originally provided was insufficient, and allowing the
employee a reasonable amount of time to obtain sufficient documentation. The employer may
also consider speaking directly with the employee’s health care provider (with the employee’s
consent) in an attempt to gain the necessary information.
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After-Acquired Evidence of Employee Misconduct
Sometimes an employee will suffer an adverse employment action in violation of the
ADA, or some other federal statute, for that matter, and, after that action has been taken, facts
surface which justify the adverse action. In such cases, employers often wish to know whether
these facts preclude a finding of discrimination under the federal statute. The answer, according
to the EEOC’s guidelines on this topic, is unequivocally no. Just as an employer cannot be liable
under the ADA for discrimination if they had no knowledge of the disability, employee
misconduct is no defense if the employer had no idea that the misconduct occurred prior to the
adverse employment action. As the Supreme Court noted, federal anti-discrimination statutes
reflect a “societal condemnation of invidious bias,” and after-acquired evidence can therefore be
no excuse. McKennon v. Nashville Banner Publ. Co., 513 U.S. 352 (1995).
However, while liability cannot be avoided, some of the remedies available to employees
under the Act still may be. As a general rule, where an employer presents evidence of prior
employee misconduct that would have justified the adverse action had the employer been aware
of the conduct, front pay and reinstatement are not available. Back pay and compensatory
damages remain available but are calculated from the date of the adverse action to the date the
evidence of misconduct was discovered. These same principles also apply generally to other
federal anti-discrimination statutes.
PRACTICAL RAMIFICATIONS OF THE ADA AMENDMENTS ACT
As a practical matter, the Amendments Act will lead to less discussion regarding whether
an individual is covered by the Act – i.e., whether an individual is “disabled” as defined by the
ADA. Rather, disputes will turn on whether an individual is qualified for his/her position so as to
qualify him/her for protection. Further, the reasonable accommodations offered by employers are
likely to be more closely scrutinized by courts than they have been in the past.
Moreover, the Amendments Act will likely lead to fewer decisions made at the summary
judgment level. Rather, cases are more likely to proceed past summary judgment and end in
either settlement or jury trial. Jury trials are a clear danger for employers, as jurors will likely be
sympathetic to employees claiming discrimination based on disability.
Further, the Amendments Act means less predictability in the area of employment law.
Previously, employers could rely on established case law with respect to interpretation of the
ADA as it was originally enacted in 1990. However, based on the fact that the Amendments Act
was enacted to undo what has been deemed as the “judicial whittling away of protection”, court
responses to ADA claims will be unpredictable.
We are beginning to see some appellate court decisions decided under the Amendments
Act. The decisions of the United States Courts of Appeals reflect a strong consensus that the
Amendments Act does not apply to ADA claims in which the alleged acts of discrimination
occurred prior to January 1, 2009, when the Amendments Act took effect; a few courts have
recognized narrow exceptions to this general rule for situations in which: (A) a plaintiff is seeking
prospective injunctive relief, such as compelling a covered entity to provide an accommodation in
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the future; or (B) a court considers provisions of the Amendments Act for the purpose of shedding
light on the original intent of Congress when it enacted the ADA. See Latham v. Board of
Education of Albuquerque, 489 Fed.Appx. 239 (10th Cir. 2012).
In Jenkins v. National Bd. of Medical Examiners, 2009 WL 331638 (6th Cir. 2009), the
Sixth Circuit discussed its recognition of a “prospective relief” exception from ADAAA
nonretroactivity – “[b]ecause this case involves prospective relief and was pending when the
amendments became effective, the ADA must be applied as amended.” In regard to the plaintiff’s
reading disorder, the district court had found that “[t]here is ample evidence that Jenkins
processes written words slowly, and that his condition prevents him from succeeding where
success is measured by one’s ability to read under time pressure,” and that “[t]his condition has
unquestionably made it more difficult for Jenkins to keep up with a rigorous medical school
curriculum and to succeed on written tests where he is under time constraints.”
Having determined, however, that the ADAAA applied to the case, the Sixth Circuit
described its impact as follows: Congress amended the portion of the ADA governing
construction of the term “disability,” such that “[t]he definition of disability in this Act shall be
construed in favor of broad coverage of individuals under this Act, to the maximum extent
permitted by the terms of this Act” and “[t]he term ‘substantially limits' shall be interpreted
consistently with the findings and purposes of the [Act].” In so stating, Congress overturned the
definition of “substantially limits” put forward in Toyota and directed the courts to interpret the
term in a more inclusive manner. Thus, the Court held that the change in the law undermined the
district court’s holding, and the resolution of this case required the district court to make a fresh
application of the law to the facts in light of the amendments to the ADA. Accordingly, the Court
of Appeals vacated the judgment and remanded the case to the district court for “further findings
in light of the ADA Amendments Act,” an outcome that illustrates the potentially transforming
effect of the ADAAA.
Listed below is the contact information for three agencies that provide free resources on
ADA compliance:
DBTAC National Network of ADA Centers
http://www.adata.org/
The Disability and Business Technical Assistance Center (DBTAC) is a national network
of 10 regional DBTAC: ADA centers that provide many free services for not-for-profit
groups with questions about the ADA. Compliance guides, on-site training and
suggestions for accommodating employees with disabilities are available. To find the
center in your region, call (800) 949-4232.
The U.S. Department of Justice ADA Information
http://www.ada.gov/infoline.htm
The U.S. Department of Justice provides information about the ADA through a toll-free
ADA information line. This service permits businesses, state and local governments, and
others to call and ask questions about general or specific ADA requirements, including
questions about the ADA standards for accessible design. ADA specialists are available
Monday through Friday from 9:30 a.m. until 5:30 p.m. (Eastern Time), except on
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Thursday when the hours are 12:30 p.m. until 5:30 p.m. For general ADA information,
answers to specific technical questions, free ADA materials, or information about filing a
complaint, call: (800) 514-0301.
United States Access Board
http://www.access-board.gov/
The Access Board is an independent federal agency devoted to accessibility for people
with disabilities. Created in 1973 to ensure access to federally funded facilities, the Board
is now a leading source of information on accessible design. The Board develops and
maintains design criteria for the built environment, transit vehicles, telecommunications
equipment, and electronic and information technology. It also provides technical
assistance and training on these requirements and on accessible design and continues to
enforce accessibility standards that cover federally funded facilities. For more
information, call: (800) 872-2253.
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AGE DISCRIMINATION IN EMPLOYMENT ACT
The Age Discrimination in Employment Act (“ADEA”), enacted in 1967, is a federal
statute that prohibits employers from discriminating against workers or job applicants who are 40
years of age or older. It also prohibits an employer from retaliating against an employee for
exercising his/her rights under the ADEA, and harassing an employee because of his or her age.
DEFINITION OF “EMPLOYER”
The ADEA defines “employer” as “a person engaged in an industry affecting commerce
who has 20 or more employees for each working day in each of 20 or more calendar weeks in the
current or preceding calendar years.” 29 U.S.C. §630(b). The ADEA also applies to labor
organizations with 25 or more members. One court expanded the definition of an employer under
the ADEA by holding that an individual placed by a temporary staffing agency at an onsite
company may raise an ADEA action against the company with which the staffing agency placed
the individual for employment. Piano v. Ameritech, 02 C 3237, 2003 WL 260337 (N.D. Ill.
2003). The court reasoned that “the joint employer theory should apply in cases in which an
individual is employed by a temporary employment agency, but suffers discrimination by the
employer to which she is assigned, where that employer exerts a significant amount of control
over the individual.” at *5. However, the same court refused to extend that holding to allow a
plaintiff to maintain a Title VII claim against a temp agency under the joint-employer theory
where the agency serves as an intermediary between the plaintiff and the agency's client but
exercises virtually no control or supervision over the plaintiff's day-to-day work. Shah v.
Littelfuse Inc., 2013 WL 1828926 (N.D. Ill.)
DEFINITION OF “EMPLOYEE”
In determining whether an individual is an employee for purposes of the ADEA, courts
consider the following five factors: “(1) the extent of the employer’s control and supervision over
the worker; (2) the kind of occupation and nature of skill required; (3) which party has
responsibility for the costs of operation, such as the provision of equipment and supplies and the
maintenance of the workplace; (4) the source of payment and benefits; and (5) the duration of the
job.” Hojnacki v. Klein-Acosta, 285 F.3d 544 (7th Cir. 2002). Of these five factors, the
employer’s right to control the manner and means of the worker’s performance is the most
important. See Mazzei v. Rock-N-Round Trucking, Inc., 246 F.3d 956 (7th Cir. 2001). In
considering such factors, the court in Hojnacki held that the plaintiff, a physician, was not an
employee for the Department of Corrections because a third party controlled the performance of
the plaintiff’s duties.
In determining whether partners or majority shareholders constitute employees under the
ADEA, courts examine the common-law element of control as the primary consideration.
Glackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003).
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REQUIREMENTS OF THE ADEA
The ADEA prohibits an employer from failing to hire, refusing to hire or discharging an
individual who is over the age of 40 on the basis of age. In addition, employers are prohibited
from discriminating against workers over the age of 40 with respect to the terms, conditions, and
privileges of employment because of age. As with Title VII, employers may not retaliate against
employees who assert their rights under the ADEA.
It is also unlawful to limit, segregate or classify employees in any way that would deprive
the employee of employment opportunities or adversely affect his/her status as an employee.
Additionally, while some federal circuits have held that the ADEA precludes practices that have a
discriminatory impact on older workers, several circuits have held that there is no discriminatory
impact theory available under the ADEA.
The ADEA also bars employers from advertising any employment preference that
discriminates against those within the protected age group, reducing the wages of any employee
to comply with the ADEA, or discriminating in favor of younger individuals within the protected
age group.
In addition, the ADEA prohibits harassment in employment on the basis of a person’s age,
such as offensive remarks about a person’s age. Although the law does not prohibit simple
teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal
when it is so frequent or severe that it creates a hostile or offensive work environment or when it
results in an adverse employment decision, such as the victim being fired or demoted. The
harasser can be the victim’s supervisor, a supervisor in another area, a co-worker, or someone
who is not an employee of the employer, such as a client or customer.
EXAMPLES OF PROHIBITED ACTIVITIES
•
Refusing to hire an applicant who is within the protected age class based on the
applicant’s age.
•
Discriminating with respect to benefits, terms, conditions and privileges of
employment against employees within the protected class on the basis of age.
•
Terminating an employee in the protected class on the basis of age.
•
Placing an advertisement for a position which restricts applicants to a certain age class
(i.e., age 16 to 35).
•
Imposing a system of mandatory retirement on workers under age 65, who have been
with the company for less than two years and who make less than $44,000 per year.
•
Implementing a policy of slowly eliminating older employees.
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The ADEA does not specifically prohibit an employer from asking an applicant’s age or
date of birth. However, because such inquiries may deter older workers from applying for
employment or may otherwise indicate possible intent to discriminate based on age, requests for
age information will be closely scrutinized to make sure that the inquiry was made for a lawful
purpose, rather than for a purpose prohibited by the ADEA.
CONSTRUCTIVE DISCHARGE
While a member of the protected class can successfully argue that s/he was constructively
discharged on the basis of his/her age, a mere loss of prestige associated with a particular position
is not sufficient to support such a finding under the ADEA. Serrano-Cruz v. DFI Puerto Rico,
Inc., 109 F.3d 23 (1st Cir. 1997). The court in Serrano-Cruz stated that employees must not be
overly sensitive to changes in their job responsibilities, and that in order to state a claim for
constructive discharge, the conditions must be so unpleasant that a reasonable person would be
compelled to leave. The court noted in this case that the plaintiff’s pay remained the same after
the change in position.
REVERSE DISCRIMINATION
Reverse discrimination does not exist under the ADEA. General Dynamics Land Systems
v. Cline, 540 U.S. 581 (2004). In Cline, the Supreme Court rejected a circuit court decision which
held that younger workers who were over the age of 40 (and thereby within the ADEA’s
protected class) had been discriminated against in favor of older workers. As the Court plainly
stated, “the enemy of 40 is 30, not 50.” The Court held that the language of the ADEA and its
legislative history clearly evidenced that the purpose of the ADEA was to protect relatively older
workers from discrimination that works to the advantage of the relatively young. As a
consequence, where two employees are both within the ADEA’s protected class, i.e., over the age
of 40, the younger employee would have no claim under the ADEA for favorable treatment by the
employer toward the elder employee. See also Mock v. University of Pittsburgh at Johnstown,
2007 WL 2253602, (W.D. Penn.)( unlike Title VII, which prohibits gender discrimination in both
directions, the ADEA only prohibits age discrimination in one direction, i.e., discrimination
which favors the young and disfavors the old).
FILING A CLAIM
An employee alleging an ADEA violation is required to file a complaint with the EEOC
prior to filing a lawsuit. Bost v. Federal Express Corp., 372 F.3d 1233 (11th Cir. 2004). The
statute of limitations for filing an ADEA claim with the EEOC depends on whether the state is a
“deferral state,” meaning it has a state agency similar to the EEOC. 29 U.S.C. §626(d). In
deferral states, an employee alleging age discrimination in violation of the ADEA must file a
claim with the EEOC within 300 days following the alleged unlawful practice. 29 U.S.C.
626(d)(2). In states that do not have a state commission or state agency equivalent to the EEOC,
the employee is required to file a charge within 180 days after the conduct in violation of the
ADEA occurred.
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The proper focus in determining when the limitations period begins to run is at the time of
the discriminatory act. Generally, the limitations period commences on the date the employee
receives a definite notice of the adverse employment action. Murphy v. General Elec. Co., 245
F.Supp.2d 459 (N.D.N.Y. 2003). In determining when the discriminatory act occurred, one court
held that the limitations period does not start upon an employee’s suspicion of an ADEA
violation. Jones v. Dillard’s, Inc., 331 F.3d 1259 (11th Cir. 2003). In Jones, the employer argued
that the employee’s ADEA claim was time-barred because the limitations period began to run
when the employee suspected that a 29-year-old was going to replace the employee. The court
did not agree and held that the limitations period did not commence until the actual date that the
employee was replaced by the younger individual. The court based its holding on the fact that the
employee would not have a cognizable claim under the ADEA based upon mere suspicions of
impermissible discriminatory acts.
In Ortony v. Northwestern, 736 F.3d 1102 (7th Cir. 2013), the court held that the time to
file a charge under the ADEA begins when an employee learns definitively that he will be let go,
because that decision is the act said to be discriminatory. Time runs from the discrimination, not
from the date the adverse effects commence. citing, Chardon v. Fernandez, 454 U.S. 6, 102 S.Ct.
28 (1981).
Courts also use the continuing violation doctrine in ADEA claims to extend the statutory
limitations period. Pursuant to the continuing violations doctrine, a plaintiff may bring a timebarred claim if s/he can show: (1) an underlying discriminatory policy; and (2) conduct pursuant
to the policy that occurred within the statutory limitations period. Murphy v. General Elec. Co.,
245 F.Supp.2d 459 (N.D.N.Y. 2003). However, there is no continuing violation if there are
merely multiple, independently actionable violations that were not the result of a policy. In
Murphy, the court held that the employee established a continuing violation by showing that the
employer was pursuing a policy that disfavored older employees by eliminating their positions
through transfers, rendering them ineligible for promotions or rehiring, stripping their job titles,
and terminating the older employees from their positions.
Under the ADEA, the EEOC is required to attempt to reach a settlement between the
parties. Once the EEOC terminates its proceedings, the EEOC will issue the plaintiff a right to sue
letter, which allows the plaintiff to file a civil lawsuit in federal court. The plaintiff has 90 days
from the date of receiving an EEOC right to sue letter to file a civil lawsuit. Bost v. Federal
Express Corp., 372 F.3d 1233 (11th Cir. 2004). However, a court may allow this time period to
be equitably tolled, thereby allowing a plaintiff to file suit after the claim would normally have
been time-barred. Generally, a court will apply equitable tolling when “a plaintiff’s unawareness
of her ability to bring a claim – either unawareness of the facts necessary to support a
discrimination charge or unawareness of her legal rights – is due to the defendant’s misconduct.”
Bennett v. Coors Brewing Co., 189 F.3d 1221 (10th Cir. 1999). When active deception on the
part of the employer is alleged, the ADEA limitations period will not be tolled unless the
employee’s failure to timely file results either from the deliberate design of the employer or by
actions that the employer should unmistakably have understood would cause the employee to
delay filing his charge. Hulsey v. Kmart, Inc., 43 F.3d 555 (10th Cir. 1994).
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In Smith v. Johnson County Board of County Commissioners, 56 Fed. Appx. 879 (10th
Cir. 2003), the plaintiff claimed that equitable tolling should apply to her untimely filed claim
because her employer stated that it would not raise the 90-day filing deadline and requested her
not to file a suit until it offered a settlement. On the date of the filing deadline, the employer
offered the settlement and withdrew the offer 49 days later. The court held that the employee’s
untimely claim was barred because equitable tolling did not apply, as no evidence existed that the
employer’s “actions were designed to lull her into believing she could delay filing her suit.”
In Federal Express Corporation v. Holowecki, 128 S. Ct. 1147 (2008), the Supreme Court
considered what constitutes a “charge” of discrimination sufficient to satisfy the requirement in
the ADEA that a plaintiff must first file such a charge with the EEOC. At the appellate level, the
Second Circuit held that the plaintiff satisfied the requirement of filing a charge by submitting an
EEOC Intake Questionnaire plus a four-page verified affidavit detailing her claims of age
discrimination, despite the fact that the EEOC did not prepare a formal charge, investigate the
claim, or send notice to the employer. The Supreme Court affirmed, holding that “in addition to
the information required by the regulations, i.e., an allegation and the name of the charged party,
if a filing is to be deemed a charge it must be reasonably construed as a request for the agency to
take remedial action to protect the employee's rights or otherwise settle a dispute between the
employer and the employee.” Further, the Court held that the EEOC’s determination that an
“Intake Questionnaire” and detailed affidavit was a “charge” was a reasonable exercise of its
authority to apply its own regulations and procedures in the course of routine administration of
the ADEA.
PROVING AN ADEA CLAIM
To bring a claim under the ADEA, a plaintiff must establish that there was an adverse
employment decision and that the employee would not have been treated adversely by the
employer if not for the employer’s motive to discriminate against the employee because of age.
A plaintiff can state a claim for discrimination under the ADEA through either the burden-shifting
method first established in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 802, 915 (1973),
often called the “indirect” method of proof, or the conventional method of presenting a
“convincing mosaic” of direct or circumstantial evidence that could permit a reasonable jury to
conclude that the defendant acted with discriminatory intent, often called the “direct” method of
proof. Cerutti v. BASF Corp., 349 F.3d 1055, 1060-61 (7th Cir. 2003). Under either method, the
plaintiff must prove, by a preponderance of the evidence, that age was the “but-for” cause of the
challenged adverse employment action. Gross v. FBL Financial Services, Inc., 129 S. Ct. 2343,
2350 (2009).
For purposes of the direct method, direct evidence is evidence that, if believed by the trier
of fact, would prove discriminatory conduct on the part of the employer without reliance on
inference or presumption. Rogers v. City of Chicago, 320 F.3d 748, 753 (7th Cir.2003). In short,
“[d]irect evidence ‘essentially requires an admission by the decision-maker that his actions were
based upon the prohibited animus.’” Id. A plaintiff can also prevail under the direct method of
proof by constructing a “convincing mosaic” of circumstantial evidence that “allows a jury to
infer intentional discrimination by the decision-maker.” Id.; see also Troupe v. May Dept. Stores
Co., 20 F.3d 734, 736 (7th Cir.1994). That circumstantial evidence, however, “must point directly
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to a discriminatory reason for the employer’s action.” Adams v. Wal-Mart Stores, Inc., 324 F.3d
935, 939 (7th Cir.2003).
As the Seventh Circuit described in Cerutti v. BASF Corp., 349 F.3d 1055, 1063 (7th Cir.
2003), where more than one decision-maker is involved in the plaintiff’s termination, a stray
workplace remark about the plaintiff’s age will offer no support to the age discrimination claim
unless the plaintiff can show a causal link between the prejudicial views allegedly expressed by
one of the decision-makers and the plaintiff’s termination. In Cerutti, the Seventh Circuit stated
that the stray remark, “[h]ow’s the old man doing today?” was “clearly not sufficient to establish
[a case] of age discrimination under the direct method of proof. See also Adams v. Wal-Mart
Stores, Inc., 324 F.3d 935, 939 (7th Cir. 2003) (noting that circumstantial evidence under the
direct method “must point directly to a discriminatory reason for the employer's action”); Cianci
v. Pettibone Corp., 152 F.3d 723, 727 (7th Cir. 1988) (noting that “before seemingly stray
workplace remarks will qualify as evidence of discrimination [under the direct method of proof],
the plaintiff must show that the remarks were related to the employment decision in question.”
(internal quotations omitted))
Under the indirect method, in order for a plaintiff to establish a prima facie case of
discrimination under the McDonnell Douglas analysis, a plaintiff must show that: (1) s/he is a
member of the protected class – over the age of 40; (2) s/he was performing his/her job
satisfactorily; (3) s/he suffered an adverse employment action; and (4) s/he was replaced by
someone younger or younger employees were treated more favorably. Faas v. Sears, Roebuck &
Co., 532 F.3d 633, 641 (7th Cir. 2008); Balderston v. Fairbanks Morse Engine Div. of Coltec
Industries, 328 F.3d 309, 321 (7th Cir. 2003). The plaintiff may meet this last element by using
statistical evidence showing a pattern or practice of discriminating against older workers, and thus
creating an inference of discriminatory intent. Murphy v. General Elec. Co., 245 F.Supp.2d 459
(N.D.N.Y. 2003).
Once a plaintiff establishes a prima facie case, the burden shifts to the employer to
articulate a legitimate, nondiscriminatory reason for the action. However, a plaintiff’s prima facie
case, combined with sufficient evidence to find that the employer’s asserted reason is false, may
permit a jury to conclude that the employer unlawfully discriminated against the employee.
Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000). Further, certain plaintiffs
may be able to rely on “me too” evidence – i.e. evidence of other employees who were
discriminated against by the employer. Mendelsohn v. Sprint/United Management Company, 128
S. Ct. 1140 (2008).
The Seventh Circuit recently held that an otherwise stray remark coupled with an adequate
prima facie showing could provide sufficient evidence of discrimination under the ADEA. Olson
v. Northern FS Inc., 387 F.3d 632 (7th Cir. 2004). In Olson, a 59-year-old employee, who had
worked for the employer since 1960, was fired and replaced by a 22-year-old with no job
experience. Five months before his termination, a representative of the employer told the
employee that, despite his experience, his age made him undesirable in the business world. The
court held that although the remark might have been too remote to serve as direct evidence, it
could be sufficient to establish pretext under a McDonnell Douglas analysis. The court noted that
the inquiry requires an initial showing that the employee was performing his/her job to the
employer’s legitimate expectations and that s/he was replaced by someone substantially younger
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or through “other such evidence that indicates that it is more likely than not that [the employee’s]
age … was the reason for the discharge.” Because the plaintiff had met his burden, the stray
remark was sufficient evidence to overcome the employer’s proffered reason that it did not know
the plaintiff was interested in a salesman position.
The Seventh Circuit’s holding in Olsen highlighted the fact that for ADEA claims based
on circumstantial evidence, liability depends on whether the protected trait under the ADEA – age
– actually motivated the employer’s decision. See Hazen Paper Co. v. Biggins, 507 U.S. 604
(1993). Likewise, the court noted that the factual inquiry is whether the defendant intentionally
discriminated against the plaintiff, and that the prima facie case method established in McDonnell
Douglas was never intended to be rigid, mechanized, or ritualistic. See U.S. Postal Service Bd. of
Govs. v. Aikens, 460 U.S. 711 (1983).
Employers should also be mindful that they may be held liable for discriminatory
employment decisions made by their independent contractors. Recently, in Halpert v. Manhattan
Apartments, Inc., 580 F.3d 86 (2d Cir. 2009), the Second Circuit Court of Appeals stated that the
employer’s liability would turn on whether the contractor was acting as the employer’s agent,
with direct or apparent authority.
Disparate Treatment v. Disparate Impact
A plaintiff bringing a claim under the ADEA may proceed under one of two theories:
disparate treatment or disparate impact. In a disparate treatment claim, a plaintiff seeks to prove
the employer’s discriminatory motive. In a disparate impact claim, there need not be proof of
intentional discrimination, but rather proof that the employer utilizes employment practices that
are facially neutral in their treatment of different groups, but which adversely impact one group
more harshly than another and cannot be justified by business necessity. As implied, employers
can defeat a disparate impact claim by establishing that it has a legitimate business necessity for
the practice.
The Supreme Court has held that the ADEA authorizes disparate impact claims. Smith v.
City of Jackson, Miss. 125 S. Ct. 1536 (2005). However, the scope of coverage for disparate
impact claims is narrower under the ADEA than under Title VII, as the ADEA precludes
employer liability if the adverse impact was attributable to a non-age factor that was reasonable.
Meacham v. Knolls Atomic Power Laboratory, 128 S. Ct. 2395 (2008). To prove a claim of
disparate impact, a plaintiff may not simply point to a generalized policy that leads to such an
impact. Rather, the employee is responsible for isolating and identifying the specific employment
practices that are allegedly responsible for any observed statistical disparities. Smith v. City of
Jackson, Miss., 125 S. Ct. 1536, 1545 (2005). In Smith, the defendant granted raises to all police
officers in an attempt to raise their starting salary average. However, officers with less than five
years of service were given larger raises, and a group of older officers brought suit, claiming the
policy adversely affected them because of their age. The court held that the officers did little
more than point out that the pay plan was relatively less generous to older workers than younger
ones, and therefore did not identify any specific test or requirement within the plan that had an
adverse impact on older workers.
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In order to prove a disparate treatment claim under the ADEA, a plaintiff must establish
that age actually motivated the employer’s decision. Kentucky Retirement Systems v. E.E.O.C.,
128 S. Ct. 2361 (2008). In Kentucky Retirement Systems, an employee who worked past normal
retirement age and then became disabled challenged Kentucky’s pension program on the basis of
age discrimination. The pension plan imputed additional years of service for workers in
“hazardous positions” who become disabled, so as to credit them with service to reach the normal
retirement age under the plan, which the employee argued disadvantaged older workers because
of their age. The court reasoned that although age and pension status usually go hand in hand,
they are analytically distinct. The court held that the disparate treatment was based on pension
status, and not age, and therefore the pension plan did not violate the ADEA.
The Supreme Court has held that in showing discriminatory intent, a plaintiff need not
prove that a worker under age 40 replaced him/her. A plaintiff may assert a cause of action under
the ADEA even though he/she was replaced by someone who is also in the protected “40 or over”
class. Specifically, in O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996), the
Supreme Court stated that in the age-discrimination context, an inference that an employment
decision was based on an illegal discriminatory criterion cannot be drawn from the replacement of
one worker with another worker insignificantly younger. Rather, a plaintiff must show that
his/her replacement was “substantially younger.” Because the ADEA prohibits discrimination on
the basis of age and not class membership, the fact that a replacement is substantially younger
than the plaintiff is a far more reliable indicator of age discrimination than is the fact that the
plaintiff was replaced by someone outside the protected class.
Permissible Actions by Employers
An employer’s salary policy that correlates wages to experience is not a violation of the
ADEA if it is not based on the employee’s age. EEOC v. Francis W. Parker School, 41 F.3d
1073 (7th Cir. 1994). In Francis W. Parker School, a 63-year-old plaintiff was not hired at the
defendant school because he qualified for a higher salary than the school could afford. The court
held that the school’s policy of linking wages to experience was economically defensible and a
reasonable way to determine salaries. Although the criteria had a disparate impact on older
workers, it was not based upon age.
Additionally, the ADEA does not require that older workers be treated more favorably than
their younger counter parts. Brophy v. Philadelphia Police Dep’t, No. Civ.A. 03-CV-4139, 2004
WL 1717616 (E.D. Pa. Jul. 28, 2004). In Brophy, a 74-year-old police recruit, who had
previously served as a police officer, FBI agent, and director of security, requested a training
waiver. The defendant employer denied the request, and the recruit subsequently failed the
firearm and running tests. The court found that the waiver denial was not proof of age
discrimination, as it had been 26 years since the recruit had served as a police officer on the
streets. Consequently, the denial was deemed “objectively reasonable.”
Recently, the 7th Circuit Court of Appeals held that an employee’s “obsolete skill set”,
which caused him to be of “declining value” to the company, was sufficient to support the
individual’s termination during a reduction in force, and found that the termination did not
constitute age discrimination. Martino v. MCI Communications Services, Inc., 574 F.3d 447 (7th
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Cir. 2009). In Martino, the employer undertook an analysis of its needs and the skills of its
employees to support a reduction in force. The employee was deemed to have “an obsolete skill
set” and his position was ultimately eliminated, which formed the basis of his federal lawsuit.
While the employee conceded that the actual decision-makers did not discriminate against him, he
invoked the “cat’s paw” theory to contend that his immediate supervisor, who sometimes called
him an “old timer”, was biased in favor of younger employees, and that the decision-makers were
influenced by that bias. The cat’s paw theory is used when an adverse action is taken by an
unbiased decision-maker, but on the basis of “singular influence” by a biased supervisor or
manager.
According to the court, the cat’s paw theory requires a “blind reliance” on input from a
biased individual. That type of influence was not present with respect to the employee because
the individuals who actually made the termination decision did an independent analysis of the
employee’s qualifications, and based their decision on business-related issues and skill-based
criteria. The court specifically stated that while choosing to terminate someone on the basis of age
is impermissible, choosing to let someone go because they have an “obsolete skill set” is not
discriminatory. The court also noted that the Supreme Court’s recent decision in Gross v. FBL
Financial Services, Inc., 129 S. Ct. 2343 (2009), made this case especially difficult for the
employee.
The employer’s success in Martino was based on its independent evaluation of employees’
skills and value to the company. This decision makes clear that employers should ensure that
independent investigations and decisions are fully documented and that analyses are based on the
needs of the employer, in order to avoid the “cat’s paw” theory attempted by the employee in
Martino. Further, employers should undertake training and counseling of supervisors and
managers to avoid the appearance of impropriety that is raised by remarks that could be
interpreted as discriminatory.
DEFENSES
An employer can defend an ADEA claim by demonstrating that the employment decision
was based on a factor other than age, usually by showing that the employer had good cause to
terminate or discipline the employee. The employer can also defend an ADEA claim by
demonstrating that age is a bona fide occupational qualification (“BFOQ”) for the position. Only
in rare circumstances can an employer legitimately argue that age is a BFOQ reasonably
necessary to the normal operation of the business.
In looking at the employer’s motivation for the complained-of action, courts should only
look to whether that motivation was honestly held, not whether it was wise or advisable. McKay
v. U.S. Dep’t of Transp., 340 F.3d 695 (8th Cir. 2003). In McKay, an older candidate for a
position was unquestionably qualified; however, another, younger, candidate was chosen because
of her superior communication skills. The employer presented uncontradicted evidence that the
employer considered communication skills the most important hiring criteria. Because no
evidence existed to establish that this reason was in any way pretextual, summary judgment in
favor of the employer was appropriate.
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Courts have held that employers may reduce the size of their workforce, commonly
referred to as a “reduction-in-force,” for economic or other legitimate business reasons. While it
is possible for a plaintiff to show that the selection process for eliminating employees was
discriminatory, as long as the reduction was based on legitimate business criteria, the plaintiff will
have a difficult time prevailing. This general tendency of the courts to defer more to the employer
in reduction-in-force situations stems from the recognition that under the well-established
business judgment rule, which is premised on the notion that businesses must be free to make
business decisions. Courts also recognize that older workers generally command higher salaries.
Perhaps the easiest defense to establish from the employer’s perspective is that the
employee was not meeting the employer’s legitimate expectations. See Luks v. Baxter Healthcare
Corp., 467 F.3d 1049 (7th Cir. 2006) (concluding that the employee failed to establish that the
employer’s proffered reason for termination – that the employee failed to meet the goals of his
performance plan – was pretext for age discrimination, and concluding that the testimony of the
plaintiff and his co-workers that the plaintiff was doing a good job was irrelevant). Under the
ADEA, as with Title VII and the ADA, in order to state a cause of action, the plaintiff must prove
that he/she was meeting the employer’s legitimate expectations, and thus, that he/she was
qualified for the job. Employers should therefore implement the practice of documenting what is
expected of each employee and any employee’s failure to meet such expectations.
Until recently, an employer could use as a defense the fact that the employee was replaced
with or treated comparably with other employees who were over the age of 40. As mentioned
above, the Supreme Court has made clear that it is enough for a plaintiff to show that he/she was
replaced with or treated worse than others who are “substantially younger.” See O’Connor v.
Consolidated Coin Caterers Corp., 517 U.S. 308 (1996). In other words, it will not provide any
defense to an age discrimination claim if a 60-year-old employee is replaced by a 45-year-old
employee, as a 15-year age difference is “substantial.” Federal circuit courts are working to
determine what span of time will qualify as “substantial.” In the Seventh Circuit, “substantially”
means that the difference in ages must be at least 10 years. Graziano v. Village of Oak Park, 401
F.Supp.2d 918 (N.D. Ill. 2005). In the Seventh Circuit, any gap of less than 10 years is
“presumptively insubstantial.” Id.
Recently, the Supreme Court has held that the ADEA provides an affirmative defense for
employers when defending against a disparate-impact claim. Meacham v. Knolls Atomic Power
Laboratory, 128 S. Ct. 2395 (2008). An employer can avoid liability by showing that the adverse
impact was attributable to a non-age factor that was reasonable. Smith v. City of Jackson, Miss.,
125 S. Ct. 1536 (2005). In Smith, the employer instituted a pay raise plan that was designed to
make junior officers’ salaries competitive with comparable positions in the market. The disparate
impact then was attributable to the City’s decision to give raises based on seniority and position,
which the Court held was unquestionably reasonable given the City’s goal. However, to
successfully assert the defense, the employer must bear both the burden of production and the
burden of persuasion. Meacham v. Knolls Atomic Power laboratory, 128 S. Ct. 2395 (2008).
The placement of the burden of persuasion on employers will make disparate impact claims
harder and costlier to defend against, and will increase the number of disparate impact suits
brought under the ADEA. Therefore, employers should be careful to ensure that any policy that
may have an adverse impact on older workers is based on reasonable factors other than age.
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Despite their motives, employers must always keep in mind that the subsequent hiring,
promoting, or preferential treatment of members of the protected class may be relevant in
considering an employee’s ADEA claim based on discrimination against the same protected class.
Ansell v. Green Acres Contracting Co., Inc., 347 F.3d 515 (3d Cir. 2003). In Ansell, the court
held that, while not conclusive, evidence of an employer’s favorable treatment of members of a
protected class creates a presumption against discriminatory intent of the employer. Thus, it is
critical for employers to understand that their actions, while not intentionally discriminatory, may
be viewed as such.
INCONSISTENT ALLEGATIONS & SOCIAL SECURITY BENEFITS CLAIMS
One court examined the availability of an estoppel defense where an employee’s ADEA
claim is based on assertions that are inconsistent with those asserted for Social Security disability
benefits. Detz v. Greiner Industries, Inc., 346 F.3d 109 (3d Cir. 2003). The court applied the
Supreme Court’s holding in Cleveland v. Policy Management Systems, which provided that an
employee may raise inconsistent assertions in an ADEA claim and Social Security disability
benefits claim so long as a “sufficient explanation” for the inconsistencies is asserted. 526 U.S.
795, 804 (1999).
In Detz, a 59-year-old employee, who was awarded Social Security disability insurance
benefits after his termination, brought a claim against his employer alleging age discrimination in
violation of the ADEA. In order to obtain Social Security disability benefits, the employee
submitted a signed statement indicating that he was unable to work as a result of a disability.
Contrary to these assertions, the employee claimed in his ADEA claim that he was a “qualified
individual” under the ADEA and capable of working. The employee’s explanation for the
inconsistencies was that he became disabled the day after his termination because his physical
condition made it impossible for him to find another job upon being terminated. The court held
that the employee’s ADEA claim was estopped because the employee did not offer a sufficient
explanation as to how he reasonably believed he was disabled yet still qualified for his position.
SAME ACTOR INFERENCE
Some courts adhere to “same actor inference,” which permits one to infer a lack of
discrimination in situations where an employee is both hired and terminated by the same
individual. Wexler v. White’s Fine Furniture, 317 F.3d 564 (6th Cir. 2003). Many courts have
granted motions for summary judgment and motions to dismiss in favor of the employer where
the employee offers insufficient evidence of discrimination and the same person was responsible
for hiring and firing the employee.
Nonetheless, other courts have not given such great deference to same actor inference and
have emphasized that although a court may infer an absence of discrimination where the same
individual hired and fired the employee, the court is not required to accept the inference in every
case. Haun v. Ideal Industries, Inc., 81 F.3d 541 (5th Cir. 1996).
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RECORD MAINTAINANCE
The statute requires that personnel records pertaining to recruitment, hiring, promotion,
demotion, transfer, layoff, recall, training, and overtime be maintained for a period of at least one
year from the date of the action taken. Payroll or other records that contain an employee’s name,
address, birth date, occupation, and rate of pay should be maintained for at least three years.
Further, records relating to benefit plans and seniority or merit ratings should be kept for at least
one year after the employee is terminated.
RELEASES OF LIABILITY
An employer may ask an employee to waive his/her rights or claims under the ADEA
either in the settlement of an ADEA administrative or court claim or in connection with an exit
incentive program or other employment termination program. However, the ADEA, as amended
by the Older Worker Benefit Protection Act (OWBPA), sets forth specific requirements that must
be met in order to create a valid release of claims under the ADEA. Among other requirements, a
valid ADEA waiver must:
• be in writing and be understandable;
• specifically refer to ADEA rights or claims;
• not waive rights or claims that may arise in the future;
• be in exchange for valuable consideration;
• advise the individual in writing to consult an attorney before signing the waiver; and
• provide the individual at least 21 days to consider the agreement and at least 7 days to
revoke the agreement after signing it.
The 21-day period is waivable by the employee, but the 7-day revocation period is not
waivable by either party. If an employer requests an ADEA waiver in connection with an exit
incentive program or other employment termination program, the minimum requirements for a
valid waiver are more extensive.
These requirements vary slightly when the separation offer and release of claims is made
to a group as opposed to an individual employee. For instance, the employer must distribute a list
of the job category and age of each individual included in the group of individuals receiving the
separation offer, in addition to the job titles and ages of the individuals in the same job
classification or unit who were not eligible for the offer. 29 U.S.C. §626(f)(1)(H). See also
Burlison v. McDonald’s Corporation 455 F.3d 1242 (11th Cir. 2006) (clarifying that to comply
with the OWBPA disclosures, employers implementing a reduction in force need only give
terminated employees the specified information about their own “decisional unit,” as opposed to
nationwide information). In addition, the employer must allow the individuals to consider the
agreement for 45 days (as opposed to the 21-day period required for a release for a single
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employee). 29 U.S.C. §626(f)(1)(F)(ii).
Further, the releases or waivers must not affect the EEOC’s rights and duties in enforcing
the ADEA or be used to justify the interference of an employee’s right to either file an EEOC
charge or participate in an EEOC investigation. 29 U.S.C. §626(f)(4). One court has held that an
employer’s attempt to enforce a contractual waiver of an employee’s right to file a charge under
the ADEA will be ineffectual and unenforceable, but this alone will not entirely render a validly
entered release as void. Wastak v. Lehigh Valley Health Network, 342 F.3d 281 (3d Cir. 2003).
The court’s holding was based on its belief that there is no statutory indication that the mere
presence of the invalid contractual language would void an otherwise knowing and voluntary
waiver. Thus, the court refused to enforce the invalid provisions, but held the remainder of the
agreement enforceable. Similarly, in another case, the court held that an arbitration provision
requiring an employee, in bringing an ADEA claim, to pay her own attorney fees and half the
arbitrator’s fees was unenforceable, but the remaining agreement was valid. Spinetti v. Service
Corp. Intern., 324 F.3d 212 (3d Cir. 2003). The court premised its holding on the notion that
“you don’t cut down the trunk of the tree because some of its branches are sickly.” Id.
If a release signed by an employee does not comply with the requirements of the OWBPA,
the employee is entitled to keep his/her severance pay and bring a cause of action against the
employer under the ADEA. Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998).
Additionally, an employer’s offer of payment to an employee as an incentive for retirement,
which would be received even if the employee did not retire, constituted a temporary employment
benefit to one who elects to continue working, and thus violated the ADEA. Abrahamson v. The
Bd. of Education of the Wappingers Central School District, 2002 WL 1354711 (S.D.N.Y. 2002).
Because of the various factors that must be considered, employers should consult with
counsel familiar with employment law when drafting ADEA releases.
DAMAGES
The favored remedy under the ADEA is reinstatement with back pay damages to allow the
plaintiff to be put in the position that he/she would have been in but for the discrimination.
According to the majority of federal circuit courts, in cases where reinstatement is not
appropriate, such as when there is significant hostility between the former employee and the
former employer, a court may award front pay to the employee. Most courts will not allow the
employee to recover front pay or future wages significantly into the future, but many will allow
recovery of five or six years of future pay.
If the employer is found to have acted willfully or with a reckless disregard for the
employee’s right to not be discriminated against on the basis of age, the court may also award
liquidated damages. Appelbaum v. Milwaukee Metropolitan Sewerage District, 340 F.3d 573 (7th
Cir. 2003). An employer willfully violates the ADEA when the employer knows that its conduct
is prohibited by the ADEA or acts with reckless disregard for the possibility that its actions are in
violation of the ADEA. However, if the “employer incorrectly, but in good faith, and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated
damages should not be imposed.” McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988). This
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semi-punitive aspect of the ADEA allows the court to double the amount of back pay damages
established in the case.
As with Title VII, the plaintiff may also recover attorneys’ fees if successful. Punitive
damages in the strictest sense and compensatory damages are not available under the ADEA.
One court has held that claims brought under the ADEA must be dismissed where the
employee cannot prove lost wages. Beverly v. Desmond Hotel & Conference Center, 2004 WL
163498 (E.D. Pa. 2004). The plaintiff in Beverly was employed as a kitchen worker. While he
expressed an interest in becoming a busboy, he never trained for the position and was told after he
left the hotel that he was never trained because he was too old. It was undisputed that the position
of busboy was actually a lower-paid position than that of kitchen worker. In considering the
claim, the court pointed out that the ADEA only makes direct economic losses recoverable, and
does not provide for compensatory or nominal damages. Thus, because the plaintiff could not
prove lost wages from being denied a lower-paying position, summary judgment was appropriate.
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CIVIL RIGHTS ACT OF 1991
The Civil Rights Act of 1991 (“CRA”) was passed in response to a number of United
States Supreme Court decisions that limited the rights of employee to sue their employers for race
discrimination under Section 1981 of the Civil Rights Act of 1886 (“Section 1981”). The Act
modified Section 1981 in several important ways, from issues of substantive proof to jury trial
rights and forms of monetary recovery. Congress enacted the Civil Rights Act of 1991 “to
strengthen existing protections and remedies available under federal civil rights laws to provide
more effective deterrence and adequate compensation of victims.” EEOC v. Luce, Forward,
Hamilton & Scripps, 345 F.3d 742 (9th Cir. 2003).
SCOPE OF THE CIVIL RIGHTS ACT OF 1991
Among other changes, the CRA added Section 1981(b), which provides that the term
“make and enforce contracts” includes the making, performance, modification, and termination of
contacts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual
relationship. Accordingly, the 1991 amendments permit employees to sue under Section 1981 for
post-contract-formation/modification conduct, including discriminatory termination.
Although Section 1981 does not itself use the word “race,” the Supreme Court has
construed it to forbid all “racial” discrimination in the making of private as well as public
contracts. Over the years, “racial discrimination” has been expanded to cover ethnic groups
including, but not limited to, Hispanics, Asians and Arabs. St. Francis Coll. v. Al-Khazraji, 481
U.S. 604 (1987); Shaare Tefila Congregation v. Cobb, 481 U.S. 615 (1987). See also
Pourghoraishi v. Flying J, 449 F.3d 751 (7th Cir. 2006); Abdullahi v. Prada USA Corp., 520 F.3d
710 (7th Cir. 2008).
Section 1981 applies to all employers, regardless of size. Additionally, Section 1981
authorizes retaliation claims. CBOCS West, Inc. v. Humphries, 128 S. Ct. 1951, 1961 (2008).
PRACTICAL IMPACT ON SECTION 1981 CLAIMS
Courts construe Section 1981 as providing two possible types of employment claims:
“old” claims based on discrimination involved in the making and enforcing of contracts, to which
the two-year statute of limitations applies, and “new” claims based on discrimination after the
contract formation occurs, to which the four-year statute of limitations applies. Oliver, 2009 WL
at *3; Dandy v. United Parcel Serv., Inc., 388 F.3d 263, 269, n. 4 (7th Cir. 2004).
One court has stated that “Section 1981 statute of limitations questions must be answered
on a claim-by-claim basis, and failure-to-promote claims can be especially slippery.” Gee v.
Metaldyne Corp., 2008 WL 4936865 *6 (S.D. Ind. 2008). Some Section 1981 failure-to-promote
claims will be governed by the four-year statute of limitations because they are comparable to
harassing conduct that occurred after the employment contract has been formed and thus were not
viable under the pre-1990 version of the statute. Gee, 2008 WL * 6; see also Jones v. Donnelley,
541 U.S. 369 (2004). Other Section 1981 failure-to-promote claims will be governed by the twoyear statute of limitations because the promotion at issue would have amounted to a new contract
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and thus would have been viable even under the unamended version of Section 1981. Gee, 2008
WL * 6.
In Patterson v. McLean Credit Union, 491 U.S. 164 at 185 (1989), the Supreme Court
explained that whether a promotion claim is actionable under Section 1981 as it was originally
enacted depends upon whether the nature of the change in position was such that it involved the
opportunity to enter into a new contact with the employer. In Patterson, the Supreme Court
reasoned that “where the promotion rises to the level of an opportunity for a new and distinct
relation between the employee and the employers,” a failure-to-promote claim is actionable under
the old version of Section 1981. Subsequently, Patterson was superseded by the CRA, which
defines the term “make and enforce contracts” to include “the making, performance, modification,
and termination of contracts, and the enjoyment of all benefits, privileges, terms and conditions of
the contractual relationship.” The term “modification” has been held to include promotion in
rank. Campbell v. City of Dayton, 1991 WL 1092501 (S.D. Ohio 1991). Consequently, the
analysis of whether the change in position involved an opportunity to enter into a new contract
with the employer is unnecessary. Instead, the CRA simply applies to all instances of promotion.
Moreover, in light of the CRA, in Walker v. Abbott Laboratories, 340 F.3d 471 (7th Cir.
2003), the court abandoned its past precedent and held that an at-will employment relationship is
contractual and therefore falls within the protections of Section 1981. Accordingly, it held that atwill employees are capable of stating a cause of action under Section 1981. This view seems to
be gaining the majority of the circuit courts’ approval. See Skinner v. Maritz, 253 F.3d 337 (8th
Cir. 2001); Lauture v. International Bus. Machs., 216 F.3d 258 (2d Cir. 2000); Perry v.
Woodward, 199 F.3d 1126 (10th Cir. 1999); Spriggs v. Diamond Auto Glass, 165 F.3d 1015 (4th
Cir. 1999); Fadeyi v. Planned Parenthood Association of Lubbock, Inc., 160 F.3d 1048 (5th Cir.
1998).
Courts have also held that the CRA’s enactment did not intend to eliminate retaliation
causes of action under Section 1981. Foley v. University of Houston System, 355 F.3d 333 (5th
Cir. 2003). The court explained that the purpose of the CRA was to expand, not reduce, civil
rights. It would therefore be unreasonable to interpret Congress’ enactment of the CRA as
narrowing the scope of Section 1981 claims.
DIFFERENCES FROM TITLE VII
Section 1981 applies to all employers, regardless of size, which is unlike Title VII’s
restriction to employers with 15 or more employees. Moreover, individual supervisors may be
named under Section 1981 (though not under Title VII) if they personally harassed or
discriminated against the plaintiff. Musikiwamba v.ESSI, Inc., 760 F.2d 740, 753 (7th Cir. 1985).
Also, unlike claims brought under Title VII, Section 1981 claims are filed directly in federal
court, not with the EEOC or any other agency. Moreover, a successful plaintiff may receive
unlimited compensatory and punitive damages, as there are no caps on damages under Section
1981.
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DISPARATE IMPACT CASES
Pre-1991 Act. When Congress originally enacted the civil rights acts, it was primarily
concerned with employers intentionally discriminating against employees on the basis of certain
protected characteristics. Thus, the focus at the time was on preventing employees from being
treated differently on the basis of those characteristics. This is now labeled as “disparate
treatment.” In Griggs v. Duke Power Co., 401 U.S. 424 (1971), however, the Supreme Court
recognized that it was possible for employees to be unintentionally discriminated against by an
employment practice that appeared to be neutral on its face. According to Griggs, once an
employee proved that the challenged employment practice had a disparate impact on him/her, the
employer then had the burden of proving that the employment practice was a “business
necessity.” Even if the employer could demonstrate that the employment practice was a business
necessity, the employee could still prevail if he/she could prove that a less-discriminatory practice
was available. Griggs established two theories by which a plaintiff could prove discrimination:
“disparate impact” and “disparate treatment.”
The law set forth by Griggs concerning disparate impact remained unchanged until the
Supreme Court’s decision in Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989). In Wards,
non-white employees proved that the combination of their employer’s hiring and promoting
practices disparately impacted jobs the non-white employees held versus those that the white
employees held. The Supreme Court held, however, that the non-white employees failed to meet
their burden because they did not establish specifically how the hiring process versus the
promoting practices of their employer had a disparate impact on them. The court further noted
that even if the non-white employees had met their burden, the employer would only be required
to demonstrate a “business justification” rather than a “business necessity,” thereby significantly
reducing the employer’s burden. If an employer demonstrated a “business justification,” then an
employee could still prevail if s/he proved that a less-discriminatory employment practice existed.
Congress enacted the CRA primarily due to the Wards decision.
Post-1991 Act. The CRA attempted to change the law back to the way it was before a
number of Supreme Court decisions, including Wards. Congress codified the CRA in order to
make it clear that the disparate impact theory was a viable cause of action under Title VII. Smith
v. City of Jackson, Miss., 351 F.3d 183 (5th Cir. 2003). Under the new law, if it is impossible to
separate the employment practices causing the disparate impact, then the employee may still have
a cause of action under the theory of disparate impact by proving that the combination of
employment practices has caused a disparate impact on him/her. If, however, the employment
practices are severable, the employee must prove how each individual employment practice had a
disparate impact on him/her. This change in the law lowers the employee’s burden back to
where it was prior to the Wards decision.
In addition to altering the employee’s burden, the CRA also affected the employer’s
burden. The Act now specifically states that when an employee proves the existence of a disparate
impact, in order to avoid liability, an employer must demonstrate a “business necessity,” which is
a higher burden than the “business justification” set forth in the Wards decision. Even if an
employer demonstrates a “business necessity,” the employee may still prevail if he/she can prove
that a less-discriminatory practice was available.
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MIXED MOTIVE CASES
The CRA also allows an employee to recover if he/she establishes that unlawful
discrimination was a “motivating factor,” although other legitimate factors contributed to the
employer’s conduct.
Courts are split as to what type of evidence an employee is required to present in order to
be entitled to a mixed motive instruction to the jury. Several courts require that the employee
offer “direct evidence,” which is evidence that unequivocally indicates the employer’s conduct
was motivated by an unlawful prejudice. This type of evidence would include written statements,
policies, or video displaying the employer’s motivation for acting. The other type of evidence is
indirect or circumstantial evidence, which does not directly show the employer’s motivation, but
merely suggests the employer’s unlawful motivation.
One court, for example, held that evidence that the employee’s manager informed the
employee that he was not getting a promotion because the vice president of the company desired
younger individuals for the position was circumstantial rather than direct evidence. Brown v.
Packaging Corp. of America, 338 F.3d 586 (6th Cir. 2003). The court concluded that this
evidence was not direct evidence because the manager was not personally involved in the decision
not to give the employee the promotion and did not reveal the vice president’s basis or motives.
The Supreme Court in Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003), resolved the
courts’ conflicting holdings regarding the issue of whether circumstantial evidence alone is
sufficient to establish a mixed motive case. In Desert Palace, a female forklift operator alleged
that she was terminated from her position on the basis of her sex. The plaintiff claimed that, as a
female, she received fewer opportunities to work overtime, was chastised for not conforming to
female stereotypes, and was disciplined more strictly than male co-workers. The plaintiff had a
history of disciplinary issues with her employer. At trial, the jury was given a mixed motive jury
instruction as follows: “You have heard evidence that the defendant’s treatment of the plaintiff
was motivated by the plaintiff’s sex and also by other lawful reasons. If you find that the
plaintiff’s sex was a motivating factor in the defendant’s treatment of the plaintiff, the plaintiff is
entitled to your verdict, even if you find that the defendant’s conduct was also motivated by a
lawful reason.”
The employer objected to the instruction on the basis that the employee failed to present
any direct evidence that the employee’s sex was a motivating factor for the adverse employment
actions. The Supreme Court held that direct evidence of discrimination is not required for a
plaintiff to receive a mixed motive jury instruction. The Court based its holding on the language
of the CRA, which unambiguously states that an employee is only required to demonstrate that an
employer used an illegitimate consideration in any employment practice. The Act does not
require a heightened showing through direct evidence. The Court believed that in many cases
circumstantial evidence is extremely probative and indicative of an employer’s motivation.
Since the Supreme Court decision in Desert Palace, circuit courts have begun to reverse
lower court decisions denying mixed motive instructions on the basis that the plaintiff did not
present direct evidence. Rowland v. American General Finance, Inc., 340 F.3d 187 (4th Cir.
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2003). In Rowland, the plaintiff alleged that the employer failed to promote her on the basis of
her sex. The employer claimed that the motivation for not giving the plaintiff the promotion was
due to her lack of “people skills.” The court held that there was sufficient circumstantial evidence
for a jury to find that the employer’s motive in refusing to promote the plaintiff was sex and
therefore reversed the lower court’s decision refusing to submit a mixed motive instruction to the
jury.
Despite all of this, a plaintiff employee is still required to present some evidence
indicating that an impermissible motive played a role in the adverse employment action. In Allen
v. City of Pocahontas, 340 F.3d 551 (8th Cir. 2003), the court affirmed the summary judgment
granted in favor of the employer because in accordance with the requirements of Desert Palace,
the plaintiff failed to offer any evidence, direct or circumstantial, from which a reasonable jury
could conclude or infer that age or gender was a motivating factor in the plaintiff’s termination.
See also Wright v. Murray Guard, Inc., 455 F.3d 702 (6th Cir. 2006) (affirming the grant of
summary judgment for the employer on a mixed motive discrimination claim where the employee
failed to offer sufficient direct or circumstantial evidence creating a genuine issue of material fact
as to whether his race or sex was a motivating factor in his termination).
Employers must remember that a plaintiff may still choose to move forward based on the
traditional burden-shifting analysis articulated in McDonnell Douglas. See Diamond v. Colonial
Life & Accident Ins. Co., 416 F.3d 310 (4th Cir. 2005).
JURY TRIALS
Perhaps the most important aspect of the CRA is that it changed the type of trial available
to an employee, depending on whether the employee proceeds under a theory of disparate
treatment or disparate impact. Prior to the CRA, most courts characterized the relief available
under the ADA and Title VII as equitable, not legal, and therefore, plaintiffs were not entitled to
jury trials.
Under the CRA, when an employee brings a claim for disparate treatment in violation of
the ADA or Title VII, which alleges that an employer has intentionally discriminated against the
employee, claiming either compensatory or punitive damages, either party may elect a jury trial.
Curtis v. Loether, 415 U.S. 189, (1974). However, if the employee is alleging only unintentional
discrimination under the theory of disparate impact, the CRA entitles him/her only to a bench
trial.
From the employer’s perspective, this new right to a jury trial increases the costs and
complications of trying discrimination cases and likely increases a plaintiff’s chance of prevailing
because juries are generally made up of employees.
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ARBITRATION
Courts have generally held that employers do not violate the CRA by requiring employees
to sign arbitration agreements as a condition of employment. In EEOC v. Luce, Forward,
Hamilton & Scripps, 345 F.3d 742 (9th Cir. 2003), the court reversed its controversial precedent
set in Duffield v. Robertson Stephens and held that the CRA does not preclude the recognition and
enforcement of agreements mandating arbitration of Title VII claims as a condition of
employment. The court’s holding was based on the language of Section 118 of the CRA, which
provides, “where appropriate and to the extent authorized by law, the use of alternative means of
dispute resolution, including … arbitration, is encouraged to resolve disputes arising under the
Acts or provisions of Federal law amended by this title.”
DAMAGES
The CRA also expanded the remedies available to employees who file suit under the ADA
or Title VII. According to Section 1981(a), plaintiffs can now claim compensatory and punitive
damages. The passage of the CRA also allowed plaintiffs to recover damages under Title VII “for
future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of
enjoyment of life, and other non-pecuniary losses” as well as punitive damages. 42 U.S.C. §1981
(a)(b)(1) &(3); Hildebrandt v. Illinois Department of Natural Resources, 347 F.3d 1014 (7th Cir.
2003).
In order to be awarded punitive damages under the CRA, the employee must prove that
the employer acted with malice or reckless indifference to his/her federally protected rights (e.g.,
the right to be free from discrimination). However, punitive damages are not available against “a
government, government agency or political subdivision.” 42 U.S.C. §1981 (a)(b)(1). In
Hildebrandt, the court held that the plaintiff could not recover punitive damages in a Title VII
claim against the Illinois Department of Natural Resources because it is a government agency.
Compensatory damages under the CRA, on the other hand, are awarded for intentional
discrimination – i.e., disparate treatment claims – resulting in future pecuniary losses, emotional
pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary
losses. The following limitations for the combination of punitive and compensatory damages
apply to intentional discrimination claims based on sex, religion, or disability (though juries are
not informed of these caps):
Number of Employees
Damages Cap
15 - 100
101 - 200
201 - 500
501 and more
$50,000
$100,000
$200,000
$300,000
These caps apply only to the punitive and compensatory aspects of an award, and do not
include back pay. It is presently unclear whether or not the caps apply to front pay.
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One court has held that damages and awards created pursuant to the CRA may not be
applied retroactively to allow recovery for discriminatory conduct that occurred before the Act’s
effective date, regardless of whether a trial on the merits was concluded prior to the date the Act
became effective. Trout v. Secretary of Navy, 317 F.3d 286 (D.C. Cir. 2003).
Section 1981 also provides for the recovery of attorney’s fees by the prevailing party.
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EQUAL PAY ACT
The Equal Pay Act (“EPA”), 29 U.S.C.A. § 206(d), is a section contained within the Fair
Labor Standards Act (“FLSA”), and is the oldest workplace civil rights law enforced by the
EEOC, pre-dating passage of the landmark Civil Rights Act of 1964 by one full year. Once
enacted, the EPA was originally enforced by the U.S. Department of Labor, with jurisdiction
being transferred to the EEOC in 1979.
The EPA prohibits discrimination on the basis of sex in the payment of wages or benefits.
The employees being compared must do equal work on jobs which require equal skill, effort, and
responsibility and which are performed under similar working conditions. The EPA is a “strict
liability” form of Title VII (which forbids discriminatory differences in wages) because unlike in
a Title VII case, an EPA plaintiff need not establish that the difference in pay is motivated by
gender discrimination.
PAY DIFFERENTIALS
A differential in pay may exist if it is pursuant to: (1) a seniority system; (2) a merit
system; (3) a system which measures earnings by quantity or quality of production; or (4) a
differential based on any factor other than sex. Additionally, an employer who is paying a wage
rate differential which violates this subsection shall not, in order to comply with the provisions of
this subsection, reduce the wage rate of any employee.
In order to show that a wage differential is justified by a seniority system, a merit system
or a system which measures quantity and quality of production (“system defenses”), the employer
must demonstrate that the system constitutes an organized and structured procedure whereby
employees are evaluated systematically according to predetermined criteria. The employer must
also show that the system has been communicated to employees and is applied uniformly to both
sexes.
When asserting that a pay differential is based on a factor other than sex, the employer
must show that there is a gender-neutral factor adopted for a legitimate business reason. When
experience and education are offered as a justification for a wage differential, the employer must
show that these factors are job-related qualifications for the position in question. It is not enough
to show that there is a difference in experience or education; an employer must also show that
certain experience or education is a specific job requirement.
Courts have generally found that salary retention programs serve as a legitimate,
nondiscriminatory purpose for a pay differential. One court held that an employer’s pay
differential based on an employee retention policy did not violate the EPA. Taylor v. White, 321
F.3d 710 (8th Cir. 2003). The court recognized that, although salary retention policies could lead
to wage distribution unrelated to an employee’s qualifications for a position, it upheld the policy
because such policies are not necessarily gender-based. Rather, salary retention policies may
serve legitimate, gender-neutral purposes, like the retention of skilled workers who may be in
high demand in the near future. The same result was reached by the court in Steger v. General
Elec. Co., 318 F.3d 1066 (11th Cir. 2003), which held that evidence establishing a wage
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differential between males and females did not prove to be a violation of the EPA, as the pay
differential was the result of a longstanding salary retention policy that allowed transferred
employees to retain salaries earned prior to transfer, rather than the result of sex discrimination.
The Seventh Circuit has held that an employer’s reliance on “market forces” as a “factor
other than sex” is a valid defense under the EPA. Yet recently, in Merillat v. Metal Spinners, 470
F.3d 685 (7th Cir. 2006), it cautioned against undue reliance on using the market forces argument
to justify a higher salary. In a footnote, the court noted that “companies may use such a theory ‘to
justify lower wages for female employees simply because the market might bear such wages.’”
citing Taylor v. White, 321 F.3d 710 (8th Cir. 2003).
It should be noted that both Title VII and the EPA bar religious educational institutions
from providing greater benefits to “heads of households,” where a “head of household” is defined
as a single person or a married man. For example, in EEOC v. Tree of Life Christian Schools, 751
F.Supp. 700 (S.D. Ohio 1990), the court held that the employer could not award an extra
allowance to all married male teachers with children, where the extra allowance was not also
provided to married female teachers. Courts have held that adherence to religious principles does
not satisfy the “basis other than sex” defense.
PROHIBITED CONDUCT UNDER THE EPA
• It is unlawful for employers to reduce the wages of either sex to equalize pay between
men and women.
• A violation may occur where a different wage is paid to a person who worked in the
same job before or after an employee of the opposite sex.
• A violation may also take place where a labor union causes the employer to violate the
law.
• An employer is permitted to base salary differences on seniority, merit, and quantity or
quality of production – in fact, generally on any other business-related factor, as long as
it is not based on a person’s sex.
• Employers found in violation of the EPA can be compelled to pay back pay, punitive
relief, and liquidated damages if the violation is shown to be willful.
DEFINITION OF “WAGES”
Wages include not only salary, but also health or other insurance, vacation or holiday pay,
overtime pay, extra pay for hazardous work, profit sharing, expense accounts, bonuses, uniform
cleaning allowances, hotel accommodations, use of company car, gas allowances and any other
form of compensation.
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DEFINITION OF “EMPLOYER”
The EPA applies to employers with two or more employees. The EPA also applies to
state employers. Siler-Khodr v. Texas Health Science Ctr. at San Antonio, 261 F.3d 542 (5th Cir.
2001). The Supreme Court refused to grant certiorari to the Fifth Circuit Court of Appeals
decision that Congress acted within its authority in abrogating the states’ Eleventh Amendment
immunity in EPA claims pursuant to its powers under the Fourteenth Amendment to enforce the
Equal Protection Clause. Siler-Khodr v. Texas Health Science Ctr. at San Antonio, 537 U.S. 1087
(2002).
STATING A CLAIM
In order to state a claim for a violation of the EPA, a plaintiff must show that: (1) different
wages are paid to employees of the opposite sex; (2) employees do equal work which requires
equal skill, effort and responsibility; and (3) employees have similar working conditions.
Merrilat v. Metal Spinners, Inc., 470 F.3d 685 (7th Cir. 2006). A female plaintiff can do this by
comparing herself to a male comparator. The plaintiff cannot compare herself to a hypothetical or
composite male; she must make the comparison to a specific male comparator who is a co-worker
of hers. The plaintiff must show that her comparison with the comparator is a valid one.
To determine whether the comparator is valid, the court will look to job content and duties
in addition to job title or description. The court will evaluate whether the comparator engages in
a “common core” of tasks that is equal to the plaintiff’s or whether there are any additional tasks
involved that make the jobs substantially different. Similar or identical position titles are not
dispositive in this analysis. Gustin v. West Virginia University, 63 Fed. Appx. 695 (4th Cir.
2003). In conducting this analysis, predecessor and successor employees are appropriate
comparators. If fact, every circuit that has considered this issue recognizes that predecessor and
successor employees are appropriate comparators under the EPA.
Moreover, it is important to keep in mind that “equal” does not mean “identical”.
Insubstantial or minor differences in the degree or amount of skill, effort, or responsibility
required for the performance of jobs will not render the equal pay standard inapplicable.
Moreover, courts recognize that differences in subject matter and differences in allocation of time
among various tasks do not necessarily defeat the equality of jobs. Rather, courts will consider the
employees’ actual job requirements and positions. For example, courts have decided that a
comparison between professors of different departments cannot be made because the different
departments require professors to have distinctive skills and entail different duties and
responsibilities.
Once the employee establishes that the jobs being compared have a common core, the
court must then ask whether any additional tasks make the jobs substantially different. In Gustin,
the court held that the first female dean of students at West Virginia University’s business school
failed to show that a male co-worker with the same position was substantially similar, as the male
co-worker’s position was a higher-ranked position and also involved additional responsibilities.
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One court held that a university professor failed to present a prima facie case of pay
discrimination, ruling that her reliance on a pay equity study in proving her case of pay
discrimination was insufficient because it was designed to evaluate faculty raises and was “not a
single quantitative measure of appropriate salaries.” Cullen v. Indiana Univ. Bd. Of Trustees, 338
F.3d 693 (7th Cir. 2003). The court further held that the plaintiff’s position as director of the
respiratory therapy program was not equal to a male professor’s position as the director of
physical therapy because the male professor’s position required a new graduate program, required
more effort due to its probation status with the university, was twice the size of the plaintiff’s
program, and generated six times the tuition of the plaintiff’s program.
Another court held that the plaintiff, a female bank vice president and cashier, failed to
establish a prima facie case of an EPA violation where she failed to show that her work was
substantially equal to that of a male predecessor, where the male predecessor had seven more
years of experience and his position included more functions and responsibilities than the
plaintiff’s position. Tenkku v. Normandy Bank, 348 F.3d 737 (8th Cir. 2003).
DEFENSES
Once a plaintiff establishes her prima facie case, the burden then shifts to the defendant to
prove by a preponderance of the evidence that the wage differential is justified by: (1) a seniority
system; (2) a merit system; (3) a system that measures earnings by quantity or quality of
production; or (4) any other factor other than sex. Explanations for the wage differential of
employees based on reasons other than gender are affirmative defenses for which the defendant
bears the burden of proof.
If the employer establishes a legitimate, nondiscriminatory reason for the differential in pay,
the employee must show that the employer’s reason is pretextual. However, if the defendant fails
to justify the wage differential under any of the four affirmative defenses set forth above, liability
is automatically established. The plaintiff need not show intentional discrimination to establish
liability under the EPA.
THE EQUAL PAY ACT & TITLE VII
Claims under the EPA may also be brought under Title VII. The main difference is that
for a claim under Title VII, the plaintiff must show intent to discriminate and show that the
individual or group was paid less because of their sex. As stated above, under the EPA, a plaintiff
does not need to show discriminatory intent in order to prevail. In effect, the EPA is a form of
strict liability Title VII case because no intent need be shown. If the employer establishes a valid
defense under the EPA, the employer has a valid defense under Title VII. If a claim cannot be
brought under the EPA, it may still be brought under Title VII, as long as the challenged wage
rate is not based on any of the four EPA defenses listed above.
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SALARY REVIEWS
Prior to undertaking a review of salaries to evaluate potential liability under the EPA,
employers should exercise caution and enlist the participation of counsel. Employers must also
check whether their state has some sort of a self-evaluation privilege. See Holt v. KMIContinental, Inc., 95 F.3d 123 (2d Cir. 1996) (where two reports were offered, only the report
done to seek legal advice was held privileged). Additionally, if the reviews of employees’ salaries
are kept in the employees’ personnel files, an employee may have the right pursuant to a state
statute to inspect his/her personnel file and to examine the salary review. (See State Statutes
Section.)
DAMAGES
A fine of up to $10,000 for the first offense may be imposed for violations of the EPA. In
addition, subsequent convictions involving willful and flagrant violations may warrant additional
fines and even up to six months in prison. A plaintiff may also recover back wages and/or
liquidated damages in an amount equal to double the back pay award for willful violations.
Hildebrandt v. Illinois Dept. of Natural Resources, 347 F.3d 1014 (7th Cir. 2003). Liquidated
damages seek to reimburse an employee for damages incurred from not receiving the pay when it
was originally due. An employer can also be ordered to stop the unlawful practice, provide
employment, reinstatement or promotion, and pay the plaintiff’s attorneys’ fees. However, unlike
Title VII damages, front pay is not an available remedy under the EPA.
STATUTE OF LIMITATIONS
Claims brought under the EPA must be filed within two years of the accrual of the cause
of action. Ryan v. General Machine Products, 277 F.Supp.2d 585 (E.D. Pa. 2003). However, in
cases where the employer has willfully violated the EPA, the limitations period is three years.
Miller v. Beneficial Management Corp., 977 F.2d 834 (3d Cir. 1992). Each discriminatory
paycheck received by the employee constitutes a separate violation of the EPA, and a new cause
of action accrues upon the employee’s receipt of the discriminatory paycheck. O’Donnell v.
Vencor Inc., 466 F.3d 1104 (9th Cir. 2006).
STATE STATUTES
It has become increasingly common for states to pass legislation similar to the EPA in
order to provide additional rights and securities to employees. For example, in 2003, Illinois
enacted the Equal Pay Act of 2003. See 820 ILCS 112/1 et. seq. The Illinois law is broader than
the federal law, which became effective on January 1, 2004. Effective January 1, 2013, officers
and agents of a company who willfully and knowingly evade the law will now be held
individually liable for not paying equal wages for equal work to employees.
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THE FAIR LABOR STANDARDS ACT
The Fair Labor Standards Act (“FLSA”), enacted in 1938, establishes minimum wage,
overtime pay, recordkeeping, and youth employment standards affecting employees in the private
sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a
minimum wage of not less than $7.25 per hour. Overtime pay at a rate not less than one and onehalf times the regular rate of pay is required after 40 hours of work in a work week. With the
exception of child labor restrictions, the FLSA does not limit the hours an employee may work. It
also provides for equal pay, regardless of sex.
COVERAGE UNDER THE FLSA
The FLSA is a complicated law, and applying it to any particular set of facts and
circumstances can be difficult. As discussed in detail below, there are two types of coverage
under the FLSA: (1) individual employee coverage (“traditional coverage”), and (2) “enterprise
coverage,” which is based on the business itself. However, before an employer can determine
whether a particular employee is “covered” by the FLSA, the employer must first determine
whether a valid employer-employee relationship exists. In other words, a prerequisite for
application of the FLSA is a valid employer-employee relationship. Therefore, if the individual
worker is not an “employee” within the meaning of the FLSA, the FLSA is inapplicable to that
worker.
WHO IS AN “EMPLOYEE?”
The FLSA defines an “employee” as a person whose activities are controlled or directed
by an employer and who works necessarily and primarily for the employer’s benefit. In
determining whether a worker is an “employee” for FLSA purposes, a court will look to the
particular facts surrounding the relationship. Independent contractors and volunteer workers are
not considered “employees” within the meaning of the FLSA.
Independent Contractors
An employee, as distinguished from an independent contractor, is one who, as a matter of
economic reality, follows the usual path of an employee and is dependent on the business which
he or she serves. The employer-employee relationship under the FLSA is tested by “economic
reality” rather than “technical concepts.”
On a number of occasions, the Supreme Court has indicated that there is no single rule or
test for determining whether an individual is an independent contractor or an employee for
purposes of the FLSA. The Court has held that it is the total activity or situation which controls.
Among the factors which the Court has considered significant are:
•
•
•
the extent to which the services rendered are an integral part of the principal’s
business;
the permanency of the relationship;
the amount of the alleged contractor’s investment in facilities and equipment;
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•
•
•
•
the nature and degree of control by the principal;
the alleged contractor's opportunities for profit and loss;
the amount of initiative, judgment, or foresight in open market competition with others
required for the success of the claimed independent contractor; and
the degree of independent business organization and operation.
There are certain factors which are immaterial in determining whether there is an
employment relationship. Facts such as the place where work is performed, the absence of a
formal employment agreement, or whether an alleged independent contractor is licensed by state
and/or local government are not considered to have a bearing on determinations as to whether
there is an employment relationship. Additionally, the Supreme Court has held that the time or
mode of pay does not control the determination of employee status.
To determine whether the worker is a bona fide independent contractor not covered under
the FLSA, courts consistently look at the following factors: (1) the degree of control exerted by
the employer over the worker; (2) the worker’s opportunity for profit or loss; (3) the worker’s
investment in the business; (4) the permanence of the working relationship; and (5) the degree of
skill required to do the work. Secretary of Labor v. Lauritzen, 835 F.2d 1529 (7th Cir. 1987).
Some courts also consider whether the services rendered are an integral part of the employer’s
business. Donovan v. Dialamerica Marketing, 757 F.2d 1376 (3d Cir. 1985).
For example, in Baker v. Flint Engineering & Construction, 137 F.3d 1436 (10th Cir.
1998), the court held that welders were “employees” and not independent contractors. The
general contractor temporarily hired the welders whenever it won a bid for a project. The court
held that the welders were “employees” covered by the FLSA because the general contractor's
foremen told the welders when to report to work, when to take breaks, what portion of the project
they were to work on, and when their workday ended. Furthermore, the welders lacked control
over the details of their welding work, which the court found was more consistent with being an
“employee” than an independent contractor.
Likewise, in McLaughlin v. Stineco, Inc., 697 F.Supp. 436 (M.D. Fla. 1988), the court
held that the individuals alleged by plaintiff to be employees were economically dependent on the
defendants and, accordingly, were employees under the FLSA. The court reasoned that the
employees were supervised by the defendants or their agents, had no opportunity for profit or
loss, and did not generally invest in equipment. While the permanency of the employment
relationship and the skill level of the employees varied, it did not overcome the employment
relationship clearly suggested by the other factors. According to the court, there was no indication
of the economic independence of the employees; rather, the individuals alleged to be employees
of the defendants were dependent upon the framing contracting business as operated by the
defendants. Based on this, the court held that the employees were simply not in business for
themselves.
In Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir. 1988), the court determined that a
groups of nurses were “employees” for purposes of the FLSA. The court found that the totality of
the circumstances revealed as a matter of economic reality that the nurses were employees. The
defendant treated the nurses as employees by exercising substantial control over the manner and
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conditions of their work. Further, the court noted that the nurses had no opportunity for profit or
loss, nor did they have any independent investment in the business. Indeed, their services were
found to be the most integral part of the defendant’s operation. Under those circumstances, the
court held that it could not be said that the nurses were in business for themselves.
Volunteers
The FLSA defines a “volunteer” as one who performs services for a public agency if: (1)
the individual receives no compensation or is paid only expenses, reasonable benefits, or a
nominal fee to perform the services for which the individual volunteered; and (2) such services
are not the same type of services which the individual is employed to perform for such public
agency. Some common examples of volunteers include volunteer firefighters and volunteers in
hospitals, nursing homes, schools, and park districts. To determine whether a worker is a
volunteer, the courts consider the following criteria:
•
•
•
who receives the benefits of the work;
how long it takes to render the services; and
whether the services are of the type normally performed by volunteers.
THE TWO TYPES OF FLSA COVERAGE
If a worker fits within the FLSA’s definition of “employee”, there are two types of
coverage that the employee can qualify for: (1) “enterprise coverage,” which is based on the
business itself, and (2) individual employee coverage (“traditional coverage”). All employees of
a business are covered under the FLSA if the business is an “enterprise” engaged in commerce.
Enterprise coverage extends to all employees, even those who would not be individually covered
because they are not personally engaged in commerce. On the other hand, an individual employee
is covered under the FLSA if he or she is “engaged in commerce” or in the “production of goods
for commerce.”
Individual Coverage Under the FLSA
Even if an employer is not a covered enterprise, individual employees are nevertheless
covered by the FLSA if they engage in interstate commerce, the production of goods for interstate
commerce, or a closely related process or occupation directly essential to such production. For an
individual employee to be covered by the FLSA, the employee must individually be engaged in
producing or handling goods in production for interstate commerce. However, employees who
are merely engaged in isolated incidents of interstate commerce are not covered by the FLSA if
the employer does not constitute an enterprise. Therefore, under this test, an employer may have
a covered employee working alongside a non-covered employee.
The definition of interstate commerce for FLSA purposes is very broad. Engaging in
interstate commerce may include activities such as making telephone calls to other states, typing
letters to send to other states, processing credit card transactions, and traveling to other states.
Thus, almost every employee is covered by the FLSA.
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That said, an employee is not considered to be engaged in interstate commerce simply
because his or her employer is engaged in interstate commerce. In determining whether an
employee is engaged in interstate commerce, courts must look at the individual employee’s work
and not the work of the employer generally. “The test is whether the work is so directly and
vitally related to the functioning of an instrumentality or facility of interstate commerce as to be,
in practical effect, a part of it, rather than isolated local activity.” Mitchell v. Lubin, McGaughty
& Associates, 358 U.S. 207 (1959). In Mitchell, the Supreme Court held that architectural firm
employees were “engaged in commerce” and, therefore, were individually covered under the
FLSA. The Court held that the architects were engaged in commerce because their work on
bridges, roads, and canals was so instrumental that the facilities would not function without their
work.
In addition, a “substantial” portion of the employee’s work must relate to and be essential
to the production of goods for commerce in order for the employee to be covered by the FLSA.
Walling v. Jackson Paper, 317 U.S. 564 (1943). Courts are split, however, on what portion of the
employee’s work must relate to interstate commerce before that work constitutes a “substantial”
portion. DeArment v. Curtins, 790 F.Supp. 868 (D. Minn. 1992) (individual coverage can be
found simply by using the telephone).
Some courts have applied the joint employer doctrine in determining whether an employee
is covered under the FLSA. Under this doctrine, an employee is economically dependent upon,
and thus jointly employed by, more than one entity at the same time. Gonzalez-Sanchez v.
International Paper Co., 346 F.3d 1017 (11th Cir. 2003). The joint employer doctrine is often
applied to employers within industries in which employees are inherently dependent upon
multiple employers, such as the agricultural industry.
“Enterprise” Coverage Under the FLSA
Under enterprise coverage, an employer becomes covered based on the general activities
of its business. Once it has been established that the employer is an enterprise, then all employees
employed by that enterprise are covered, regardless of their individual relationship with interstate
commerce.
The FLSA defines “enterprise” as the “related activities performed (either through unified
operation or common control) by any person or persons for a common business purpose.” This
enterprise may consist of more than one establishment, so the enterprise may consist of one or
more corporations, partnerships, or sole proprietorships. The key inquiry in determining whether a
business is part of an enterprise is whether there exists a unified operation or common control and
a common business purpose.
Courts have also used the joint enterprise theory in determining whether multiple entities
that are affiliated constitute an enterprise within the meaning of the FLSA. In considering
whether the different entities constitute an enterprise for purposes of the FLSA, courts will
consider the following elements: (1) related activities; (2) unified operation; and (3) common
control and common business purpose. Chao v. A-One Medical Services, Inc., 346 F.3d 908 (9th
Cir. 2003).
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Once it has been established that the employer is an enterprise, the next inquiry is whether
the enterprise is engaged in commerce or the production of goods for commerce so as to be
covered by the FLSA. An enterprise is engaged in commerce, and, therefore, covered by the
FLSA if it:
(1) Has two or more employees who either:
a. engaged in commerce or in the production of goods for commerce
(traditionally covered) or
b. handle, sell, or otherwise work on goods or materials that have been moved in
or produced for commerce by any person;
(2) And the employer either:
a. Has a gross volume of sales not less than $500,000; or
b. is engaged in the operation of a hospital; the care of the sick, the aged, or
mentally ill who reside on the premises; or is a school for the mentally and/or
physically handicapped or gifted children, a preschool, elementary or
secondary school, or institution of higher education; or is a public agency.
As can be seen from this test, the FLSA specifically states that enterprises include
hospitals; institutions engaged in the care of the sick, elderly, or mentally ill who reside on the
premises; schools for mentally/physically ill or gifted children; preschools; elementary or
secondary schools; high schools; and institutions of higher education. The FLSA does not
distinguish between institutions, which are for profit or not-for-profit, private or public.
Courts have construed the following employers to qualify as enterprises:
•
Providers of in-home health services with annual revenues in excess of $500,000.
Chao v. A-One Medical Services, Inc., 346 F.3d 908 (9th Cir. 2003).
•
A casting agency that provided security services at on-site filming locations for movie
productions, because it engaged in interstate commerce by producing films intended
for national and international distribution. Chao v. Casting, Acting and Sec. Talent,
Inc., 79 Fed. Appx. 327 (9th Cir. 2003).
•
Defendants’ operation of a motor inn and a supper club were considered a single
enterprise because the two businesses were coordinated and had interdependent
operations directed toward the purpose of providing services to travelers. Martin v.
Deiriggi, 985 F.2d 129 (4th Cir. 1992).
•
A board of directors that managed a group home. Dole v. Odd Fellows Home
Endowment Board, 912 F.2d 689 (4th Cir. 1990). The court held that the board of
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directors and the fraternal organization performed “related activities” because they
were “mutually supportive entities” that existed to maintain the group home. The
court also held that the group home employees did “handle, sell, or otherwise” work
on goods which had been in interstate commerce because they prepared and served
food which had previously traveled in interstate commerce.
•
The operation of an independent gas station, because its employees sold gasoline,
which had been previously moved in interstate commerce. Donovan v. Scoles, 652
F.2d 16 (9th Cir. 1981). The court held that there is no requirement that the employees
handle or sell goods that have a present involvement in interstate commerce.
•
Operation where employees mailed checks to out-of-state residents. Montalvo v.
Tower Life Building, 426 F.2d 1135 (5th Cir. 1970). The court held that under the
enterprise test for coverage, it is sufficient when at least two employees mail checks to
out-of-state residents.
EXEMPT VS. NON-EXEMPT EMPLOYEES
Even when an employee is “covered” under the FLSA, there are certain exemptions for
certain employees from the overtime pay provisions, some from both the minimum wage and
overtime pay provisions and some from the child labor provisions of the FLSA. Exemptions are
narrowly construed against the employer asserting them. Consequently, employers and employees
should always closely check the exact terms and conditions of an exemption in light of the
employee’s actual duties before assuming that the exemption applies to the employee. The
ultimate burden of supporting the application of an exemption rests on the employer.
Employers must understand that reductions in the predetermined salary of an employee
who is exempt from the FLSA will ordinarily cause a loss of the exemption. As a result, an
employee must then be paid the minimum wage and overtime required by the FLSA. The
FLSA’s prohibition against making deductions from the pay of exempt employees is often
referred to as the “no-docking” rule.
Salary Basis Requirement
Generally, in order to qualify for an exemption, employees must be paid not less than
$455 per week on a salary basis. However, these salary requirements do not apply to outside
sales employees, teachers, and employees practicing law or medicine. Moreover, exempt
computer employees may be paid at least $455 on a salary basis or on an hourly basis at a rate not
less than $27.63 an hour.
Being paid on a “salary basis” means an employee regularly receives a predetermined
amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined
amount cannot be reduced because of variations in the quality or quantity of the employee’s work.
Subject to the exceptions listed below, an exempt employee must receive the full salary for any
week in which the employee performs any work, regardless of the number of days or hours
worked.
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Nevertheless, exempt employees do not need to be paid for any work week in which they
perform no work. If the employer makes deductions from an employee’s predetermined salary,
that employee is not paid on a “salary basis.” If the employee is ready, willing and able to work,
deductions may not be made for time when work is not available.
Fee Basis
Administrative, professional, and computer employees may be paid on a “fee basis” rather
than on a salary basis. If the employee is paid an agreed sum for a single job, regardless of the
time required for its completion, the employee will be considered to be paid on a “fee basis.” A
fee payment is generally paid for a unique job, rather than for a series of jobs repeated a number
of times and for which identical payments repeatedly are made.
To determine whether a fee payment meets the minimum salary level requirement, the test
is to consider the time worked on the job and determine whether the payment is at a rate that
would amount to at least $455 per week if the employee worked 40 hours. For example, an artist
who is paid $250 for a painting that took 20 hours to complete meets the minimum salary
requirement, since that rate would yield $500 if 40 hours were worked.
“Actual Practice” Determination
If it is determined that an employer has an “actual practice” of making improper
deductions from the salary of an exempt employee, the exemption will be lost. Factors to
consider when determining whether an employer has an actual practice of making improper
deductions include but are not limited to:
•
•
•
•
the number of improper deductions, particularly as compared to the number of
employee infractions warranting deductions;
the time period during which the employer made improper deductions;
the number and geographic location of both the employee whose salary was
improperly reduced and the manager responsible; and
whether the employer has a clearly communicated policy permitting or prohibiting
improper deductions.
If an “actual practice” is found, the exemption is lost during the time period of the deductions for
employees in the same job classification working for the same managers responsible for the
improper deductions. Isolated or inadvertent improper deductions will not result in loss of the
exemption if the employer reimburses the employee for the improper deductions.
Safe Harbor
The FLSA includes a safe harbor provision for employers who do not willfully violate the
no-docking rule. If an employer (1) has a clearly communicated policy prohibiting improper
deductions and including a complaint mechanism, (2) reimburses employees for any improper
deductions, and (3) makes a good faith commitment to comply in the future, the employer will not
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lose the exemption for any employees unless the employer willfully violates the policy by
continuing the improper deductions after receiving employee complaints.
Exceptions to the No-Docking Rule
There are seven exceptions to the FLSA prohibition against deductions – i.e. the nodocking rule:
•
An employer can deduct compensation paid for absence from work for one or more
full days for personal reasons, other than sickness or disability.
•
An employer can deduct compensation paid for absence from work for one or more
full days due to sickness or disability if deductions made under a bona fide plan,
policy or practice of providing wage replacement benefits for these types of absences.
•
An employer can deduct compensation to offset any amounts received as payment for
jury fees, witness fees or military pay.
•
An employer can deduct compensation for penalties imposed in good faith for
violating safety rules of major significance.
•
An employer can deduct compensation for unpaid disciplinary suspension of one or
more full days imposed in good faith for violations of written workplace conduct rules.
•
An employer can deduct compensation for the proportionate part of an employee’s full
salary that may be paid for time actually worked in the first and last weeks of
employment.
•
An employer can deduct compensation for unpaid leave taken pursuant to the Family
and Medical Leave Act.
EXEMPTIONS FROM THE FLSA MINIMUM WAGE AND OVERTIME PAY
REQUIREMENTS
As stated, even when an employee is “covered” under the FLSA, there are certain
exemptions from FLSA coverage. These exemptions are either determined by an employee’s
activities or are industry-wide. Essentially, exempt employees are covered by the FLSA, but they
are exempt from certain provisions depending on the exemption.
The following are recognized exemptions to the FLSA:
(1) The White Collar Exemptions, which include the Executive, Administrative, and
Professional Exemptions;
(2) The Family Business Exception;
(3) The Religious and Charitable Exception for volunteers;
(4) The Ministerial Exemption;
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(5) Law Enforcement/Fire Personnel Exemption; and
(6) The Companionship Services Exemption.
White Collar Employee Exemptions
The most significant exemptions under the FLSA are for “white collar” employees. The
“white collar” exemptions are set forth in Section 13(a)(1) of the FLSA, which provides an
exemption from both minimum wage and overtime pay for employees employed as bona fide
executive, administrative, professional and outside sales employees, in addition to certain
computer employees. To qualify for the exemption, employees generally must meet certain tests
regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles
do not determine exempt status. In order for an exemption to apply, an employee’s specific job
duties and salary must meet all the requirements of the Department’s regulations.
Executive Exemption
To qualify for the executive employee exemption, all of the following tests must be met:
•
•
•
•
The employee must be compensated on a salary basis (as defined in the regulations) at
a rate not less than $455 per week;
The employee’s primary duty must be managing the enterprise, or managing a
customarily recognized department or subdivision of the enterprise;
The employee must customarily and regularly direct the work of at least two or more
other full-time employees or their equivalent; and
The employee must have the authority to hire or fire other employees, or the
employee’s suggestions and recommendations as to the hiring, firing, advancement,
promotion or any other change of status of other employees must be given particular
weight.
The Department of Labor defines the terms of the test as follows:
“Primary duty” means the principal, main, major or most important duty that the employee
performs. Determination of an employee’s primary duty must be based on all the facts in a
particular case, with the major emphasis on the character of the employee’s job as a whole.
Generally, “management” includes, but is not limited to, activities such as interviewing,
selecting, and training of employees; setting and adjusting their rates of pay and hours of work;
directing the work of employees; maintaining production or sales records for use in supervision or
control; appraising employees’ productivity and efficiency for the purpose of recommending
promotions or other changes in status; handling employee complaints and grievances; disciplining
employees; planning the work; determining the techniques to be used; apportioning the work
among the employees; determining the type of materials, supplies, machinery, equipment or tools
to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of
materials or merchandise and supplies; providing for the safety and security of the employees or
the property; planning and controlling the budget; and monitoring or implementing legal
compliance measures.
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The phrase “a customarily recognized department or subdivision” is intended to
distinguish between a mere collection of employees assigned from time to time to a specific job
or series of jobs and a unit with permanent status and function.
The phrase “customarily and regularly” means greater than occasional but less than
constant; it includes work normally done every workweek, but does not include isolated or onetime tasks.
The phrase “two or more other employees” means two full-time employees or their
equivalent. For example, one full-time and two half-time employees are equivalent to two fulltime employees. The supervision can be distributed among two, three or more employees, but
each such employee must customarily and regularly direct the work of two or more other full-time
employees or the equivalent. For example, a department with five full-time nonexempt workers
may have up to two exempt supervisors if each supervisor directs the work of two of those
workers.
Factors to be considered in determining whether an employee’s recommendations as to
hiring, firing, advancement, promotion or any other change of status are given “particular weight”
include, but are not limited to, whether it is part of the employee’s job duties to make such
recommendations, and the frequency with which such recommendations are made, requested, and
relied upon. Generally, an executive’s recommendations must pertain to employees whom the
executive customarily and regularly directs. It does not include occasional suggestions. An
employee’s recommendations may still be deemed to have “particular weight” even if a higher
level manager’s recommendation has more importance and even if the employee does not have
decision as to the employee’s change in status.
Under a special rule for business owners, an employee who owns at least a bona fide 20percent equity interest in the enterprise in which employed, regardless of the type of business
organization (e.g., corporation, partnership, or other), and who is actively engaged in its
management, is considered a bona fide exempt executive.
Administrative Exemptions
To qualify for the administrative employee exemption, all of the following tests must be
met:
•
•
•
The employee must be compensated on a salary or fee basis (as defined in the
regulations) at a rate not less than $455 per week;
The employee’s primary duty must be the performance of office or non-manual work
directly related to the management or general business operations of the employer or
the employer’s customers; and
The employee’s primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance.
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The Department of Labor defines the terms of the test as follows:
As stated, “primary duty” means the principal, main, major or most important duty that the
employee performs. Determination of an employee’s primary duty must be based on all the facts
in a particular case, with the major emphasis on the character of the employee’s job as a whole.
To meet the “directly related to management or general business operations” requirement,
an employee must perform work directly related to assisting with the running or servicing of the
business, as distinguished, for example from working on a manufacturing production line or
selling a product in a retail or service establishment. Work “directly related to management or
general business operations” includes, but is not limited to, work in functional areas such as tax;
finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement;
advertising; marketing; research; safety and health; personnel management; human resources;
employee benefits; labor relations; public relations; government relations; computer network,
Internet and database administration; legal and regulatory compliance; and similar activities.
An employee may qualify for the administrative exemption if the employee’s primary
duty is the performance of work directly related to the management or general business operations
of the employer’s customers. Thus, employees acting as advisors or consultants to their
employer’s clients or customers — as tax experts or financial consultants, for example — may be
exempt.
In general, the exercise of discretion and independent judgment involves the comparison
and the evaluation of possible courses of conduct and acting or making a decision after the
various possibilities have been considered. The term must be applied in the light of all the facts
involved in the employee’s particular employment situation, and implies that the employee has
authority to make an independent choice, free from immediate direction or supervision. Factors to
consider include, but are not limited to: whether the employee has authority to formulate, affect,
interpret, or implement management policies or operating practices; whether the employee carries
out major assignments in conducting the operations of the business; whether the employee
performs work that affects business operations to a substantial degree; whether the employee has
authority to commit the employer in matters that have significant financial impact; whether the
employee has authority to waive or deviate from established policies and procedures without prior
approval, and other factors set forth in the regulation. The fact that an employee’s decisions are
revised or reversed after review does not mean that the employee is not exercising discretion and
independent judgment. The exercise of discretion and independent judgment must be more than
the use of skill in applying well-established techniques, procedures or specific standards described
in manuals or other sources.
The term “matters of significance” refers to the level of importance or consequence of the
work performed. An employee does not exercise discretion and independent judgment with
respect to matters of significance merely because the employer will experience financial losses if
the employee fails to perform the job properly. Similarly, an employee who operates very
expensive equipment does not exercise discretion and independent judgment with respect to
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matters of significance merely because improper performance of the employee’s duties may cause
serious financial loss to the employer.
The administrative exemption is also available to employees compensated on a salary or
fee basis at a rate not less than $455 a week, or on a salary basis which is at least equal to the
entrance salary for teachers in the same educational establishment, and whose primary duty is
performing administrative functions directly related to academic instruction or training in an
educational establishment. Academic administrative functions include operations directly in the
field of education, and do not include jobs relating to areas outside the educational field.
Employees engaged in academic administrative functions include: the superintendent or other
head of an elementary or secondary school system, and any assistants responsible for
administration of such matters as curriculum, quality and methods of instructing, measuring and
testing the learning potential and achievement of students, establishing and maintaining academic
and grading standards, and other aspects of the teaching program; the principal and any viceprincipals responsible for the operation of an elementary or secondary school; department heads
in institutions of higher education responsible for the various subject matter departments;
academic counselors and other employees with similar responsibilities. Having a primary duty of
performing administrative functions directly related to academic instruction or training in an
educational establishment includes, by its very nature, exercising discretion and independent
judgment with respect to matters of significance.
Professional Exemption
To qualify for the learned professional employee exemption, all of the following tests
must be met:
•
•
•
•
The employee must be compensated on a salary or fee basis (as defined in the
regulations) at a rate not less than $455 per week;
The employee’s primary duty must be the performance of work requiring advanced
knowledge, defined as work which is predominantly intellectual in character and
which includes work requiring the consistent exercise of discretion and judgment;
The advanced knowledge must be in a field of science or learning; and
The advanced knowledge must be customarily acquired by a prolonged course of
specialized intellectual instruction.
The Department of Labor defines the terms of the test as follows:
“Work requiring advanced knowledge” means work which is predominantly intellectual
in character, and which includes work requiring the consistent exercise of discretion and
judgment. Professional work is therefore distinguished from work involving routine mental,
manual, mechanical or physical work. A professional employee generally uses the advanced
knowledge to analyze, interpret or make deductions from varying facts or circumstances.
Advanced knowledge cannot be attained at the high school level.
Fields of science or learning include law, medicine, theology, accounting, actuarial
computation, engineering, architecture, teaching, various types of physical, chemical and
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biological sciences, pharmacy and other occupations that have a recognized professional status
and are distinguishable from the mechanical arts or skilled trades where the knowledge could be
of a fairly advanced type, but is not in a field of science or learning.
The learned professional exemption is restricted to professions where specialized
academic training is a standard prerequisite for entrance into the profession. The best evidence of
meeting this requirement is having the appropriate academic degree. However, the word
“customarily” means the exemption may be available to employees in such professions who have
substantially the same knowledge level and perform substantially the same work as the degreed
employees, but who attained the advanced knowledge through a combination of work experience
and intellectual instruction. This exemption does not apply to occupations in which most
employees acquire their skill by experience rather than by advanced specialized intellectual
instruction.
To qualify for the creative professional employee exemption, all of the following tests
must be met:
•
•
The employee must be compensated on a salary or fee basis (as defined in the
regulations) at a rate not less than $455 per week;
The employee’s primary duty must be the performance of work requiring invention,
imagination, originality or talent in a recognized field of artistic or creative endeavor.
The Department of Labor defines the terms of the test as follows:
The “invention, imagination, originality or talent” requirement distinguishes the creative
professions from work that primarily depends on intelligence, diligence and accuracy. Exemption
as a creative professional depends on the extent of the invention, imagination, originality or talent
exercised by the employee. Whether the exemption applies, therefore, must be determined on a
case-by-case basis. The requirements are generally met by actors, musicians, composers, soloists,
certain painters, writers, cartoonists, essayists, novelists, and others as set forth in the regulations.
Journalists may satisfy the duties requirements for the creative professional exemption if their
primary duty is work requiring invention, imagination, originality or talent. Journalists are not
exempt creative professionals if they only collect, organize and record information that is routine
or already public, or if they do not contribute a unique interpretation or analysis to a news
product.
The “recognized field of artistic or creative endeavor” includes such fields as, for
example, music, writing, acting and the graphic arts.
Teachers
Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing in
the activity of imparting knowledge, and if they are employed and engaged in this activity as a
teacher in an educational establishment. Exempt teachers include, but are not limited to, regular
academic teachers; kindergarten or nursery school teachers; teachers of gifted or disabled
children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in
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automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or
instrument music teachers. The salary and salary basis requirements do not apply to bona fide
teachers. Having a primary duty of teaching, tutoring, instructing or lecturing in the activity of
imparting knowledge includes, by its very nature, exercising discretion and judgment.
Practice of Law or Medicine
An employee holding a valid license or certificate permitting the practice of law or
medicine is exempt if the employee is actually engaged in such a practice. An employee who
holds the requisite academic degree for the general practice of medicine is also exempt if he or
she is engaged in an internship or resident program for the profession. The salary and salary basis
requirements do not apply to bona fide practitioners of law or medicine.
As with attorneys and doctors, the $455 per week rule and salary basis requirements do
not apply to teachers. See 29 C.F.R. §541.303(d). As a result, employees who qualify as
“teachers” under the DOL regulations “may be paid any amount and on any basis and such
compensation may be subject to deductions because the employee worked less than a full day.”
See September 23, 2005 DOL Opinion Letter.
Computer Employee Exemption
To qualify for the computer employee exemption, the following tests must be met:
•
•
The employee must be compensated either on a salary or fee basis (as defined in the
regulations) at a rate not less than $455 per week or, if compensated on an hourly
basis, at a rate not less than $27.63 an hour;
The employee must be employed as a computer systems analyst, computer
programmer, software engineer or other similarly skilled worker in the computer field
performing the duties described below;
The employee’s primary duty must consist of:
•
•
•
•
The application of systems analysis techniques and procedures, including consulting
with users, to determine hardware, software or system functional specifications;
The design, development, documentation, analysis, creation, testing or modification of
computer systems or programs, including prototypes, based on and related to user or
system design specifications;
The design, documentation, testing, creation or modification of computer programs
related to machine operating systems; or
A combination of the aforementioned duties, the performance of which requires the
same level of skills.
The computer employee exemption does not include employees engaged in the
manufacture or repair of computer hardware and related equipment. Employees whose work is
highly dependent upon, or facilitated by, the use of computers and computer software programs
(e.g., engineers, drafters and others skilled in computer-aided design software), but who are not
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primarily engaged in computer systems analysis and programming or other similarly skilled
computer-related occupations identified in the primary duties test described above, are also not
exempt under the computer employee exemption.
Outside Sales Exemption
To qualify for the outside sales employee exemption, all of the following tests must be
met:
•
•
The employee’s primary duty must be making sales (as defined in the FLSA), or
obtaining orders or contracts for services or for the use of facilities for which a
consideration will be paid by the client or customer; and
The employee must be customarily and regularly engaged away from the employer’s
place or places of business.
The Department of Labor defines the terms of the test as follows:
“Sales” includes any sale, exchange, contract to sell, consignment for sales, shipment for
sale, or other disposition. It includes the transfer of title to tangible property, and in certain cases,
of tangible and valuable evidences of intangible property.
Obtaining orders for “the use of facilities” includes the selling of time on radio or
television, the solicitation of advertising for newspapers and other periodicals, and the solicitation
of freight for railroads and other transportation agencies. The word “services” extends the
exemption to employees who sell or take orders for a service, which may be performed for the
customer by someone other than the person taking the order.
The phrase “customarily and regularly” means greater than occasional but less than
constant; it includes work normally done every workweek, but does not include isolated or onetime tasks.
An outside sales employee makes sales at the customer’s place of business, or, if selling
door-to-door, at the customer’s home. Outside sales does not include sales made by mail,
telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Any
fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic
solicitation of sales is considered one of the employer’s places of business, even though the
employer is not in any formal sense the owner or tenant of the property.
Promotion work may or may not be exempt outside sales work, depending upon the
circumstances under which it is performed. Promotional work that is actually performed
incidental to and in conjunction with an employee’s own outside sales or solicitations is exempt
work. However, promotion work that is incidental to sales made, or to be made, by someone else
is not exempt outside sales work.
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Drivers Who Sell
Drivers who deliver products and also sell such products may qualify as exempt outside
sales employees only if the employee has a primary duty of making sales. Several factors should
be considered in determining whether a driver has a primary duty of making sales, including a
comparison of the driver’s duties with those of other employees engaged as drivers and as
salespersons, the presence or absence of customary or contractual arrangements concerning
amounts of products to be delivered, whether or not the driver has a selling or solicitor’s license
when required by law, the description of the employee’s occupation in collective bargaining
agreements, and other factors set forth in the regulation.
Highly Compensated Employees
Highly compensated employees performing office or non-manual work and paid total
annual compensation of $100,000 or more (which must include at least $455 per week paid on a
salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least
one of the duties of an exempt executive, administrative or professional employee identified in the
standard tests for exemption.
Family Business Exemption
Establishments that employ only workers who are members of one immediate family (e.g.
parent, spouse, child) are excluded from enterprise coverage. An “establishment” is defined as a
“distinct physical place of business.” The sales of such an establishment are not included in
determining the minimum amount of revenue that triggers the Act. This family business
exemption is often referred to as the “mom and pop” exception. However, if a family business
employs non-family workers more than “infrequently, irregularly, and sporadically,” then the
business is no longer exempt from the enterprise test. Donovan v. I & J, 567 F.Supp. 93 (D. N.
Mex. 1983).
In Martin v. Bedell, 955 F.2d 1029 (5th Cir. 1992), the family business in question was a
marine catering business with an “establishment” run by a husband, wife, and daughter on land.
However, the business employed cooks who performed their duties on a ship at sea. The court
held that the actual “establishment” on land was comprised of related individuals and was
therefore exempt under the “mom and pop” exemption. The boat, however, constituted a separate
“establishment.” Since the cooks on the boat were not members of the immediate family, they
were not covered by the exemption and, thus, were subject to the enterprise coverage test.
Religious and Charitable Institutions Exemption
The FLSA does not broadly exempt religious or charitable institutions. The DOL takes
the position that as long as there is an employer-employee relationship, the institution must
comply with the FLSA. However, due to the nature of religious and charitable institutions, it is
possible that their workers are bona fide volunteers who are not covered by the Act. Therefore, a
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religious or charitable institution must comply with the FLSA unless no employer-employee
relationship exists.
In Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (1985), the
Supreme Court held that the defendant, a religious institution, was an “enterprise” within the
meaning of the FLSA. The Supreme Court held that the FLSA does not contain an express or
implied exception for commercial activities conducted by religious or other nonprofit
organizations, and the fact that the commercial business is “infused with a religious purpose” is
irrelevant. Therefore, if a church or other nonprofit organization conducts business with the
general public in the same manner as ordinary commercial enterprises, the FLSA applies with
equal force.
Courts have held that church-operated schools are included as enterprises under the FLSA.
In Dole v. Shenandoah Baptist Church, 899 F.2d 1389 (4th Cir. 1990), the court held that
pursuant to the Supreme Court’s ruling in Alamo Foundation, church-operated schools are clearly
encompassed by the FLSA’s definition of “enterprise.” The Court found that the church-operated
school in question was operated in the same manner as any preschool, elementary school, or
institution of higher education and, therefore, was covered by the Act. Similarly, in DeArment v.
D.L. Harvey, 932 F.2d 721 (8th Cir. 1991), the court held that a church-operated school was not
exempt from the FLSA’s minimum wage and recordkeeping requirements simply because the
school was religiously affiliated. The court held that the church, which was responsible for
paying the school employees’ salaries, was an “enterprise” within the meaning of the FLSA
because the Act does not differentiate between public and private schools.
Institutions engaged primarily in the care of the aged, sick, or mentally ill who reside on
the premises clearly fall within the definition of “enterprise” under the FLSA. Dole v. Odd
Fellows Home Endowment Board, 912 F.2d 689 (4th Cir. 1990). However, a facility that merely
cares for the indigent is not an institution that is engaged in the “care of the aged, sick, or
mentally ill.”
Ministerial Exemption
Individuals such as nuns, priests, monks, ministers, and other members of religious
institutions who serve pursuant to their religious obligations in schools, hospitals, or other
institutions operated by their church or religious institution are exempt from the FLSA. However,
the fact that the worker is a member of the clergy does not preclude the individual from entering
into an employer-employee relationship and being covered by the Act.
The ministerial exemption to the FLSA has been recognized in Shaliehsabou v. Hebrew
Home of Greater Washington, Inc., 369 F.3d 797 (4th Cir. 2004) (rehearing denied). In
Shaliehsabou, a “mashgiach,” or an inspector appointed by a board of Orthodox rabbis to prevent
violations of Jewish dietary laws, was held to be exempt from FLSA protection based on the
ministerial exemption. As pointed out in a dissenting opinion, there is no such exemption found
within the literal wording of the statute. “[T]he FLSA is completely bereft of any language that
even conceivably could be construed to create the ‘ministerial exemption’ to the definition of
‘employee’ recognized, and relied upon, by the majority.” Id. at 799. Nevertheless, according to
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the majority opinion, “this exemption is derived from the congressional debate [about the FLSA]
and delineated in guidelines issued by the Labor Department’s Wage and House Administrator.
The relevant portion of those guidelines provides: Persons such as nuns, monks, priests, lay
brothers, ministers, deacons, and other members of religious orders who serve pursuant to their
religious obligations in schools, hospitals, and other institutions operated by their church or
religious order shall not be considered to be “employees.” Shaliehsabou v. Hebrew Home of
Greater Washington, Inc., 363 F.3d 299, 305 (4th Cir. 2004).
Subsequently, in Schleicher v. Salvation Army, 518 F.3d 472 (7th Cir. 2008), former
ministers of the Salvation Army, whose work involved preaching, leadership worship singing, and
supervising the center’s thrift shops, fell within the minister’s exemption to the FLSA.
Consequently, the ministers’ lawsuit for violations of the minimum wage and overtime provisions
of the FLSA was dismissed for lack of jurisdiction.
In contrast, teachers at religious schools operated by churches do not fall under the
ministerial exemption. Dole v. Shenandoah Baptist Church, 899 F.2d 1389 (4th Cir. 1990). In
Dole, the court held that, although teachers at church-operated schools carry out the faith of the
church, the relationship between the teachers and the school was simply that of employer and
employee. Therefore, the court concluded that the teachers did not qualify for the ministerial
exemption.
Law Enforcement and Fire Personnel Exemption
Pursuant to the Secretary of Labor’s interpretation of 29 U.S.C. §207(k), an employer is
not required to provide overtime compensation for law enforcement and fire protection personnel
until their number of working hours exceeds 43 hours in a seven-day period or 171 hours in a 28day period. O’Brien v. Town of Agawam, 350 F.3d 279 (1st Cir. 2003)(overruled on other
grounds by 14 Penn Plaza LLC Pryett, ––– U.S. ––––, 129 S.Ct. 24, 171 L.Ed.2d 927 (2008)).
Further, this exemption only applies where the employee can establish that the employees are
engaged in fire protection services or law enforcement activities, and if the employer has adopted
a qualified work period. A qualified work period is “any established and regularly recurring
period of work which, under the terms of the Act and the legislative history, cannot be less than
seven consecutive days nor more than twenty-eight consecutive days.” The employer bears the
burden of satisfying these two conditions in order for the exemption to apply.
The exemptions also do not apply to police officers, detectives, deputy sheriffs, state
troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or
probation officers, park rangers, fire fighters, paramedics, emergency medical technicians,
ambulance personnel, rescue workers, hazardous materials workers and similar employees,
regardless of rank or pay level, who perform work such as preventing, controlling or
extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting
crimes; conducting investigations or inspections for violations of law; performing surveillance;
pursuing, restraining and apprehending suspects; detaining or supervising suspected and
convicted criminals, including those on probation or parole; interviewing witnesses; interrogating
and fingerprinting suspects; preparing investigative reports; or other similar work.
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Companionship Services Exemption
The Supreme Court recently clarified an FLSA exemption for paying overtime and
minimum wages to home care companions. In Long Island Care at Home, Ltd., v. Coke, 127 S.
Ct. 2339 (2007), the plaintiff, a home care companion to elderly patients, filed suit against her
employer, claiming that she was non-exempt and entitled to minimum wages and overtime. The
employer relied on a DOL exemption in the FLSA for casual babysitters and companions to the
elderly or infirm to support its decision to deny Coke minimum wages and overtime. This
exemption is known as the companionship services exemption.
The companionship services exemption of the FLSA exempts from the federal minimum
wage and overtime requirements employees who provide in-home companionship services to
individuals who are unable to care for themselves. Under DOL regulations, the exemption
applies to employees who are employed either by the individuals for whom they provide services
or by third-party employers.
In spite of the Supreme Court’s exemption decision, employers should be mindful that the
federal companionship services exemption has certain limitations. In order to qualify for the
exemption, employees providing companionship services may not spend more than 20% of their
weekly time performing non-exempt general household work, such as dusting, vacuuming,
washing floors or windows, cleaning refrigerators and ovens, or shoveling snow. Employees may
provide household work related to “care,” such as preparing meals, washing dishes, sweeping the
floor after meals, making a bed, washing clothes, or scrubbing the bathtub after a bath. Moreover,
such services must be performed by non-trained employees (not by registered or licensed practical
nurses), and must be provided in a private home.
Even though the Supreme Court’s decision in Long Island Care at Home, Ltd. is a victory
for third-party employers of companionship workers, employers should be aware that state law
may nonetheless require the payment of minimum wages and overtime. Employers should
consider these practical tips if they intend to apply the companionship services exemption:
•
Contact employment counsel to determine whether state law requiring payment of
minimum wage and overtime applies regardless of the FLSA’s companionship
services exemption.
•
Ensure that employee job descriptions and personnel policies clearly set forth the type
of household work an employee may do without invalidating the exemption.
•
Include provisions in contracts with employees, client-families and state agencies that
prohibit the employees from performing non-exempt general household work.
•
If non-exempt general household work will inevitably occur, consider requiring
employees to prepare separate time sheets, logging the time spent on general
household work on one and time spent on household work related to the care on
another.
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•
Monitor time sheets to ensure that time spent on non-exempt general household work
does not exceed 20% of each employee’s weekly time.
•
If a client-family desires non-exempt general household work to be performed,
consider designating certain employees for that type of work and pay them at least the
minimum wage and overtime. Also, consider using part-time employees and/or ensure
that such employees are scheduled to avoid overtime situations.
OTHER EXEMPTIONS UNDER THE FLSA
In addition to the aforementioned exemptions to the FLSA wage and overtime
requirements, the DOL recognizes exemptions related to the following: Automobile Dealers;
Blue-Collar Workers; Construction Workers; Financial Services Industry Employees; First
Responders Exemptions; Insurance Claims Adjusters; Journalists/Reporters; Motor Carrier;
Nurses; Recreational Establishments; Seasonal Amusement; Veterans; and Technologists and
Technicians. Information on these exemptions can be found on the DOL website at
http://www.dol.gov.
FLSA MINIMUM WAGE REQUIREMENTS
Employees protected by the FLSA must receive a minimum wage not less than $7.25 per
hour for the first 40 hours of work in a work week. In addition, the following states have higher
minimum wages (as of January 1, 2014) than the FLSA requires:
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Alaska:
Arizona:
California:
Colorado:
Connecticut:
DC:
Florida:
Illinois:
Massachusetts:
Maine:
Michigan:
Missouri:
$7.75
$7.90
$8.00
$8.00
$8.70
$8.25
$7.93
$8.25
$8.00
$7.50
$7.40
$7.50
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Montana:
Nevada:
New Jersey:
New Mexico:
New York:
Ohio:
Oregon:
Rhode Island:
Vermont:
Washington:
$7.90
$8.25
$8.25
$7.50
$8.00
$7.95
$9.10
$8.00
$8.73
$9.32
Moreover, the following states currently have $7.25 minimum wage laws applicable to
employees who are not protected by the FLSA:
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Delaware
Hawaii
Idaho
Iowa
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New Jersey
New York
North Carolina
North Dakota
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Indiana
Kansas
Kentucky
Maryland
Missouri
Nebraska
New Hampshire
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Oklahoma
Pennsylvania
South Dakota
Texas
Utah
Virginia
West Virginia
Wisconsin
The following states currently have lower minimum wage laws applicable to employees
who are not protected by the FLSA:
•
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Arkansas:
Georgia:
$6.25
$5.15
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Minnesota:
Wyoming:
$6.15
$5.15
Finally, the following states currently have no additional minimum wage laws:
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Alabama
Mississippi
Tennessee
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Louisiana
South Carolina
Compensation
When determining whether an employee is earning the minimum wage, one must add up
all of the compensation received in a week and divide that by the number of hours worked that
week. The following compensation is taken into consideration: (1) all wages, including salary,
hourly and piece rate; (2) commissions; (3) certain bonuses; (4) tips received by eligible
employees; and (5) reasonable cost of room, board and other “facilities” provided by the
employer for the employee’s benefit. With respect to board and lodging, the amount considered
cannot exceed actual cost, cannot include a profit to the employer and should follow good
accounting practices. An employer cannot take credit when no cost is incurred.
The minimum wage must be paid to the employee regardless of whether the employee is
paid on an hourly or salaried basis. The FLSA does not limit an employer’s ability to pay its
employees by salary, commission, monthly, piecework, or in any other manner, as long as the pay
covering each work week meets or exceeds the minimum wage requirement.
Deductions
The FLSA prohibits deductions from wages for the cost of any items which are considered
primarily for the benefit or convenience of the employer if the deduction would reduce the
employee’s earnings below the required minimum wage or overtime compensation.
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Some examples of items which would be considered to be for the benefit or convenience
of the employer are tools used in the employee’s work, damages to the employer’s property by the
employee or any other individuals, financial losses due to clients/customers not paying bills, and
theft of the employer’s property by the employee or other individuals. Employees may not be
required to pay for any of the cost of such items if, by so doing, their wages would be reduced
below the required minimum wage or overtime compensation. This is true even if an economic
loss suffered by the employer is due to the employee’s negligence.
For example, if an employee who is subject to the statutory minimum wage of $7.25 per
hour (as of July 24, 2009) is paid an hourly wage of $7.25, the employer may not make any
deduction from the employee’s wages for the cost of the uniform, nor may the employer require
the employee to purchase the uniform on his/her own. However, if the employee were paid $7.75
per hour and worked 30 hours in the work week, the maximum amount the employer could
legally deduct from the employee’s wages would be $15.00 ($.50 x 30 hours). However, the
employer may prorate deductions for the cost of the uniform over a period of paydays, provided
the prorated deductions do not reduce the employee’s wages below the required minimum wage
or overtime compensation in any work week.
Furthermore, employers may not avoid FLSA minimum wage and overtime requirements
by having the employee reimburse the employer in cash for the cost of such items in lieu of
deducting the cost from the employee’s wages.
Hours Worked
Both minimum wage and overtime pay are based on the number of hours the employee
works in a week. The calculation of hours worked often depends on what activities constitute
“work” by the employee. The employee is “working” within the meaning of the FLSA when
he/she is engaged in physical or mental exertion that is controlled or required by the employer and
is necessary for the business.
The following activities are generally included in the calculation of hours worked:
•
•
•
•
•
time spent changing clothes or washing up before or after work, as long as such
activities are required by the nature of the employee’s job;
travel time, only if the employee is transporting equipment to a job site;
on-call time that is primarily for the benefit of the employer;
meal breaks, if the employee’s time is spent primarily for the benefit of the employer;
and
coffee breaks of less than 10 minutes.
However, the following activities are generally not included in the calculation of hours
worked by the employee:
•
•
time spent traveling to and from the actual place of work;
on-call time that allows the employee to pursue personal interests;
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•
•
bona fide meal periods of 30 minutes of more, if the time is spent primarily for the
benefit of the employee; and
voluntary meetings or training not related to the employee’s work and held outside
working hours.
Courts have construed the following to not constitute working time:
•
Employer/employee relationship did not extend to a work-at-home program. Reich v.
ConAgra, 987 F.2d 1357 (8th Cir. 1993). In the work-at-home program, regular store
employees voluntarily created model displays for the stores using materials provided
by the employer. However, the models were created on the employees’ own time
while they were at home, and they were allowed to keep the models after their use.
The court held that in light of these factors, and the fact that employees were not
adversely affected for not participating, the employer/employee relationship did not
extend into the program. Therefore, the employer did not violate the FLSA by not
paying overtime compensation for the hours “worked” at home.
•
Employees who arrived at work 15-30 minutes early to prepare for “pre-shift
briefings” were held to not be “working” within the meaning of the FLSA. Lamon v.
Shawnee, 972 F.2d 1145 (10th Cir. 1992). Although the employees argued that the
briefings necessitated advance preparation, the court held that an employee’s mere
presence at the employer’s workplace does not constitute “working” if the employee
freely chooses to put in additional time as a matter of personal preference or
convenience.
•
Plain-clothed detectives’ time spent “on-call,” even though they were required to leave
a phone number where they could be reached and were prohibited from participating
in outdoor activities, leaving town, or drinking alcohol. Birdwell v. Gadsen, 970 F.2d
802 (11th Cir. 1992). The court held that despite the above, the on-call time was not
used predominately for the employer’s benefit and was therefore not compensable.
•
Employee’s attendance at safety training courses which the employer required as a
precondition to employment, but which could also be completed within a reasonable
time after employment commenced. Chao v. Tradesmen International, Inc., 310 F.3d
904 (6th Cir. 2002). The court held that attending the safety courses did not constitute
working time because the employees were not performing work while attending the
safety courses, and the subject matter of the courses did not directly relate to the
employees’ job skills.
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•
However, in Sehie v. City of Aurora, 432 F.3d 749 (7th Cir. 2005), an employee was
required to see a company therapist outside of her normal working hours. Each
session lasted approximately one hour, and the employee incurred two additional
hours of travel time per session. In holding the time associated with the therapy to be
compensable, the court considered the fact that the employer would not allow the
employee to see a counselor of her own choosing, mandated the employee’s
attendance as a condition of employment, and paid for approximately 90% of the
related costs. Additionally, the court found that the purpose of the therapy was to
allow the plaintiff to better perform her job duties.
When calculating hours worked, employers should consider time that employees spend
on-call. If an employee is required to remain on-call on the employer’s premises or so close that
the employee cannot use time effectively for his or her own purposes, the employee is working
while on-call. In that case, the time the employee is on-call is counted as hours of work that must
be paid. On the other hand, if an employee is merely required to carry a paging device or leave
word with company officials regarding where he or she may be reached, on-call time should not
be considered hours worked unless an employee actually responds to a call back to duty.
However, if such calls are so frequent that an employee is not really free to use the off-duty time
effectively for the employee’s own benefit, the intervening periods as well as the time spent in
responding to calls would be counted as compensable hours of work.
Bona fide meal periods should not be counted as compensable hours worked. Ordinarily,
30 minutes or more is long enough for a bona fide meal period. Meal periods of less than 30
minutes during which an employee is relieved for purposes of eating a meal may be bona fide –
and thus not hours worked – when certain special conditions are present. Such special conditions
include only sporadic and minimal work-related interruptions to the meal period, sufficient time
for employees to eat a regular meal at a time of day or shift when meals are normally consumed,
an agreement between the employees and employer that a meal period of less than 30 minutes is
sufficient to eat a regular meal, and applicable state or local laws do not require lunch periods in
excess of the shortened meal period. The employee is not to be considered relieved if the
employee is required to perform any duties, whether active or inactive, while eating. For
example, an employee who is required to eat at a desk in order to answer the telephone is
considered working while eating. It is not necessary that an employee be permitted to leave the
premises if the employee is otherwise relieved from duties during the meal period. Coffee breaks
and time for snacks are typically periods of short duration (five to 20 minutes) and must be
counted as compensable hours worked.
Time that employees spend in meetings, lectures or training is considered hours worked
and must be paid unless: (1) attendance is outside regular working hours; (2) attendance is
voluntary; (3) the course, lecture or meeting is not job-related; and (4) the employee does not
perform any productive work during attendance. If employees, by their own initiative, attend
independent school, college, or independent trade school after hours, the time is not considered
hours worked for their employer, even if the courses are related to their jobs.
In addition, time spent traveling for work should be taken into consideration when
calculating hours worked. Compensable travel includes travel between job sites during the
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normal work day. If an employee is required to report to a meeting place to receive instructions,
perform other work there, or pick up equipment or tools, the travel from the designated meeting
place to the workplace is part of the day’s work and must be counted as hours worked. For
example, if an employee normally finishes his work at 5:00 p.m. and is sent to another job which
he finishes at 8:00 p.m. and is required to return to his employer’s premises by 9:00 p.m., all of
the time is working time. However, if the employee goes home instead of returning to his
employer’s premises, the travel after 8:00 p.m. is home-to-work travel and does not constitute
hours worked. Special rules apply when an employee travels away from his or her home
community.
Travel for a special one-day assignment in another city is not ordinary home-to-work
travel. Because it is performed for the employer’s benefit and at the employer’s request, it is like
travel that is all in the day’s work. The normal home-to-work travel time may still be deducted.
When an employee travels away from home and stays overnight, the travel time is work time
when it cuts across the employee’s workday. The employee is simply substituting travel for other
duties. The time is not only hours worked on regular working days during normal working hours
but also during the corresponding hours on non-work days. For example, if an employee regularly
works from 9:00 a.m. to 5:00 p.m. Monday through Friday, the travel time during these hours is
work time on Saturday and Sunday as well as on the other days. Regular meal period time is not
counted. As an enforcement policy, the Wage and Hour Division will not consider as work time
the time spent in travel away from home outside of regular working hours as a passenger on an
airplane, train, boat, bus, or automobile.
FLSA OVERTIME REQUIREMENTS
The FLSA generally requires employers (not otherwise exempt) to pay overtime wages for
hours worked in excess of 40 hours a week. An employee who works more than 40 hours in a
week is paid overtime at the rate of one and one-half times that of the employee’s regular pay.
Normally, overtime pay earned in a particular work week must be paid on the regular pay day for
the pay period in which the wages were earned. The employer and employee cannot agree to
waive overtime payment that is due under the FLSA.
The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or
regular days of rest, nor does the FLSA require overtime pay for working over eight hours in a
day, except in certain circumstances for hospital and residential care establishments. Moreover,
nothing in the FLSA relieves an employer of any obligation he or she may have by contract or
other federal or state law.
Compliance with overtime requirements is determined on a work week basis. An
employee’s work week is a fixed and regularly recurring period of 168 hours, which amounts to
seven consecutive 24-hour periods. The work week does not have to be a calendar week and may
begin on any day at any hour of the day as set by the employer. Once established, the work week
remains fixed regardless of which hours an employee works. The averaging of hours over two or
more work weeks is not permitted.
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An employee’s regular rate of pay is determined by dividing total earnings in the work
week by the total number of hours worked in the work week. This includes all earnings for
employment except certain payments excluded by the FLSA. Earnings may be determined on a
piece-rate, salary, commission or some other basis, but in all such cases, the overtime pay due
must be computed on the basis of the average hourly rate derived from such earnings. This is
calculated by dividing the total pay for employment (except statutory exclusions) in any work
week by the total number of hours actually worked. This may not be less than the applicable
minimum wage.
The following payments that employees receive are not included when calculating total
earnings for regular rate purposes:
•
•
•
•
•
•
•
•
sums paid as gifts
payments for time not worked
reimbursement for expenses
discretionary bonuses
profit sharing plans
retirement and insurance plans
overtime premium payments
stock options
FLSA CHILD LABOR REQUIREMENTS
The FLSA provides for minimum wages as well as maximum working hours regulating
child labor. The FLSA defines “child” as any worker who is under the age of 18. Those who are
under the age of 18 are prohibited from working certain types of jobs. For example, children
under the age of 13 can only babysit, deliver newspapers, and work as actors or performers.
Teenagers between the ages of 14 and 15 can work in offices, grocery stores, retail stores,
restaurants, movie theaters, and amusement parks. Moreover, the hours during which 14 to 15year-olds can work are limited to the hours between 7:00 a.m. and 7:00 p.m. Hours are extended
to 9:00 p.m. from June 1 through Labor Day. Fourteen to 15-year-olds are also restricted from
working more than three hours on school days, 18 hours in school weeks, eight hours on nonschool days, and 40 hours in non-school weeks. Teenagers between the ages of 16 and 17 can do
any work so long as it has not been declared hazardous. Teenagers age 18 and older have no agerelated job restrictions.
According to the new Department of Labor penalty structure, employers who violate the
FLSA’s child labor provisions for children between the ages of 12 and 13 will face a penalty of
$6,000.00-$11,000.00 per violation, and for children under age 12, a penalty of $8,000.00 $11,000.00 per violation.
These are the minimum requirements imposed by the FLSA. Each state has its own
additional requirements, which may further limit the ability to employ minors. For example,
many states have minimum rest period requirements.
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FLSA RECORDKEEPING REQUIREMENTS
The FLSA requires covered employers to keep certain records for all non-exempt
employees, including records of the employees’ personal information, hours worked, and
payments. An employer must keep these records for either a two- or three-year period, and it
must make the records available for inspection by employees.
An accurate record of the hours worked each day and total hours worked each week is
critical to avoiding compliance problems. Employers may use any timekeeping method they
choose. For example, they may use a time clock, have a timekeeper keep track of employee work
hours, or tell their workers to write their own times on the records. Any time plan is acceptable so
long as it is complete and accurate.
Payroll records, collective bargaining agreements, sales and purchase records must be
preserved for at least three years. Records on which wage computations are based should be
retained for two years. Such records include timecards, piecework tickets, wage rate tables, work
and time schedules, and records of additions to or deductions from wages.
The following is a list of the basic records that must be kept:
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•
•
•
•
•
•
•
•
•
•
•
•
•
employee’s full name and social security number;
employee’s address, including zip code;
employee’s birth date, if younger than 19;
employee’s sex and occupation;
time and day of week when employee’s work week begins;
hours worked each day;
total hours worked each work week;
basis on which employee’s wages are paid (e.g. “$9 an hour,” “$420 a week,”
“piecework”);
regular hourly pay rate;
total daily or weekly straight time earnings;
total overtime earnings for the workweek;
all additions to or deductions from the employee’s wages;
total wages paid each pay period; and
date of payment and the pay period covered by the payment.
THE FLSA & THE EQUAL PAY ACT
The Equal Pay Act amendment to the FLSA prohibits an employer from discriminating
against employees on the basis of sex. The Act requires that employers pay employees of each
sex equal wages for equal work on jobs which require equal skill, effort, and responsibility, and
which are performed under the same working conditions. However, an employer may make wage
differentials based on seniority systems, merit systems and incentive production systems, or any
factor other than sex.
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STATE AND LOCAL GOVERNMENT EMPLOYEES
When the FLSA was enacted in 1938, it did not apply to public entities. Congress
extended coverage to entities in 1966, and the extension was eventually upheld in Garcia v. San
Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985). In Garcia, the Supreme Court held
that Congress has the power under the Commerce Clause of the Constitution to extend FLSA
coverage to state and local government employees. The Court overruled its previous decision in
National League of Cities v. Usery, 426 U.S. 833 (1976), where it held that regulation of
traditional government functions would violate the Tenth Amendment.
Although FLSA coverage can extend to state and local government employees without
violating the Tenth Amendment, the states themselves, as well as state entities that are considered
“arms of the state,” are immune to FLSA lawsuits pursuant to the Eleventh Amendment. Alden v.
Maine, 527 U.S. 706 (1999).
Moreover, state employees cannot sue their supervisors in their personal capacities in an
attempt to subvert the Eleventh Amendment. Luder v. Endicott, 253 F.3d 1020 (7th Cir. 2001).
In Luder, Wisconsin prison employees filed a lawsuit to recover back wages pursuant to the
FLSA. The employees argued that their lawsuit was not against the state because they were
technically suing prison supervisors in their personal capacities. The Seventh Circuit held that this
was essentially “an effort at an end run around the Eleventh Amendment” because in reality, the
money they were suing for would come from the state treasury. The Eleventh Amendment
immunizes states from such suits brought under federal laws.
Factors that courts consider when determining whether a state entity is an arm of the state
include: (1) whether payment of a judgment from the suit would come from the state treasury; (2)
the status of the entity under state law; (3) the entity’s degree of autonomy; (4) the degree of
control the state exercises over the entity; (5) whether the entity deals with local or statewide
concerns; (6) whether the entity has the authority to sue and be sued in its own name; and (7)
whether the entity has the right to hold and use property. Chisolm v. McManimon, 275 F.3d 315,
323 (3d Cir. 2001); Kitchen v. Upshaw, 286 F.3d 179, 184 (4th Cir. 2000).
Some hospitals have been considered arms of the state for Eleventh Amendment purposes.
Sessions v. Rusk State Hospital, 648 F.2d 1066, 1069 (5th Cir. 1981). On the other hand, school
districts are generally not considered “arms of the state” for Eleventh Amendment purposes.
Ambus v. Granite Bd. of Educ., 975 F.2d 1555 (10th Cir. 1992). Thus, state entities should not
assume they are immune from FLSA lawsuits under the Eleventh Amendment.
CLASS ACTIONS UNDER THE FLSA
Class actions under the FLSA have become increasingly common.
provides:
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Section 216(b)
[A]n action to recover the liability prescribed … may be maintained
against any employer (including a public agency) in any Federal or
State Court of competent jurisdiction by any one or more employees for
and on behalf of himself or themselves and other employees similarly
situated. No employee shall be a party plaintiff to any such action
unless he gives consent in writing to become such a party and such
consent is filed in the court in which such action is brought.
Therefore, in class actions under the FLSA, in contrast to Rule 23 federal class actions, a plaintiff
does not become a part of the lawsuit and is not bound by the outcome of the case unless the
plaintiff affirmatively opts into the class by filing written consent with the court.
ENFORCEMENT
The FLSA is enforced by the Department of Labor, but an employee can also enforce the
FLSA through a private lawsuit.
The Supreme Court has held that the provision of the FLSA which states that a suit may
be maintained in any federal or state court does not bar removal of an FLSA claim from state to
federal court. Breur v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691 (2003). The Court ruled that
nothing in the statute prohibits the removal of FLSA causes of action. Therefore, if an employee
brings an FLSA claim against an employer in a state court, the employer, if it desires, may
remove the claim to federal court so long as the traditional requirements for removal are satisfied.
STATUTE OF LIMITATIONS
Generally, there is a two-year statute of limitations for FLSA claims; however, if the
employee is claiming that the employer willfully violated the FLSA, the statute of limitations
extends to three years. A private employee need not file with the Department of Labor before
proceeding with a lawsuit against the employer.
ARBITRATION CLAUSES
Employers commonly have employees enter into arbitration agreements in which the
employee agrees to waive any right to bring an FLSA action against the employer in favor of
settling the dispute through arbitration. In order for such agreements to be valid, they must
contain a clear and unmistakable waiver of the employee’s right to a judicial forum for an FLSA
claim. O’Brien v. Town of Agawam, 350 F.3d 279 (1st Cir. 2003).
DAMAGES
If an employee succeeds in a lawsuit against the employer for a violation of the FLSA, the
employee can collect both back pay and liquidated damages. Moreover, an employee is entitled
to receive the amount of back wages owed, plus an additional equal amount as liquidated
damages. These liquidated damages are presumed, and the only way an employer can avoid
paying the liquidated damages is by showing by “plain and substantial evidence” that it acted with
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“subjective good faith and objective reasonableness.” In Heidtman v. El Paso, 171 F.3d 1038 (5th
Cir. 1999), the court held that the employer, who violated the FLSA, was liable for liquidated
damages because it could not show that its conduct was in good faith or based on reasonable
grounds. The court held that when there is evidence that an employer suspects that it is not in
compliance with the FLSA, the employer did not act in good faith.
Further, an employee may also seek equitable relief for a violation of the FLSA. For
example, the employee may be awarded reinstatement or promotion by the employer. An
employer found to be in violation of the FLSA may also be liable for reasonable attorneys’ fees.
An employer in violation of the FLSA may also be subject to criminal prosecution if the
violations are willful. However, the Department of Labor, as a matter of policy, refers only
aggravated violations to the Department of Justice for criminal prosecution. A criminal conviction
can bring a fine of not more than $10,000 and/or imprisonment for not more than six months.
First-time offenders are only subject to the fine.
PENALTIES
Employers who willfully violate the FLSA may be prosecuted criminally and fined up to
$11,000.00. Employers who violate the youth employment provision are subject to a civil money
penalty of up to $11,000.00 for each employee who was the subject of a violation. Employers
who willfully or repeatedly violate the minimum wage requirements are subject to a civil money
penalty of up to $1,100.00 for each such violation.
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THE FAMILY AND MEDICAL LEAVE ACT
Congress enacted the Family and Medical Leave Act of 1993 (“FMLA”) in order to
address employees’ ongoing concerns of “inadequate job security for employees who have
serious health conditions that prevent them from working for temporary periods.” Miller v. AT&T,
250 F.3d 820 (4th Cir. 2001). The FMLA’s expressed purpose is to “entitle employees to take
reasonable leave for medical reasons in a manner that accommodates the legitimate interests of
the employer.” The FMLA is administered by the Employment Standards Administration’s Wage
and Hour Division within the Department of Labor.
In addition to other requirements, the FMLA requires certain employers to provide up to
12 work weeks of unpaid leave to an employee under the following circumstances:
•
the birth of a child and to care for the newborn child within one year of birth;
•
the placement with the employee of a child for adoption or foster care and to care for the
newly placed child within one year of placement;
•
to care for the employee’s spouse, child or parent who has a serious health condition;
•
a serious health condition that makes the employee unable to perform the essential
functions of his or her job; or
•
any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter,
or parent is a covered military member on “covered active duty.”
Employers are also required to provide up to 26 work weeks of unpaid leave to employees
who are qualified servicemembers or care for qualified servicemembers. A portion of this section
on the FMLA is dedicated solely to military-related FMLA leave. Employers should be aware,
however, unless otherwise indicated, the general requirements of the FMLA also apply to
military-related FMLA leave.
2009 CHANGES TO THE FMLA
The Department of Labor’s FMLA regulations, which took effect last year on January 16,
2009, are the first published revisions to the FMLA since its enactment in 1993. The regulations
enable employers to administer FMLA leave more efficiently by including improvements with
respect to the potential abuse of intermittent leave rights by employees, which has proved to be
problematic for employers. The regulations seemingly distribute the responsibility of employees
in requesting and taking the leave with the responsibility of employers in granting and certifying
the leave. In short, employers must improve their efforts to educate employees, and employees
must improve their efforts to communicate their need for FMLA leave and supplying appropriate
and timely medical certifications.
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Also, in 2009, the National Defense Authorization Act for 2010 (“NDAA for 2010”) was
signed into law, and took immediate effect. The NDAA for 2010 is discussed in detail below.
Most notably, the NDAA for 2010 expands the definition of a “covered servicemember” to
include a veteran who is undergoing medical treatment, recuperation or therapy for a serious
injury or illness and who was a member of the Armed Forces, including the National Guard and
Reserves, at any time during the five-year period preceding the date on which the veteran
undergoes medical treatment, recuperation or therapy. In addition, the recent amendments expand
the definition of a “serious injury or illness” to include an injury or illness that was incurred by
the covered servicemember before the servicemember’s active duty and was aggravated by
service in the line of duty while on active duty.
DEFINITION OF “EMPLOYER”
Under the FMLA, an employer is defined as including:
•
any person engaged in commerce or in any industry or activity affecting commerce
who employs 50 or more employees for each working day during each of 20 or more
calendar work weeks in the current or preceding calendar year;
•
any person who acts directly or indirectly in the interest of an employer to any of the
employees of such employer;
•
any successor in interest of an employer; and
•
any “public agency” as defined by the FLSA.
However, if a particular worksite employs fewer than 50 people, an employer may still be
required to provide FMLA leave if that employer employs 50 or more employees within a 75-mile
radius of the worksite. Moreover, public and private elementary and secondary schools are subject
to the FMLA, regardless of whether they employ fewer than 50 people. 29 C.F.R. § 825.600(b).
Additionally, the recent Seventh Circuit ruling in Peters v. Gilead Sciences, Inc., 533 F.3d
594 (7th Cir. 2008) leaves the door open for employee handbooks to entitle employees to FMLA
benefits by the inclusion of an FMLA policy in the handbook, based on a breach of contract or
promissory estoppel theory, even though their employers are not subject to FMLA requirements
at that particular time.
An individual associated with an employer may also be held liable under the FMLA.
However, courts are split on the issue of whether an individual public employee may be held
liable under the FMLA. The Sixth Circuit has held that no individual liability may result under
the FMLA if the employer is a public agency. Mitchell v. Chapman, 343 F.3d 811 (6th Cir. 2003).
While in Modica v. Taylor, 465 F.3d 174 (5th Cir. 2006), the Fifth Circuit held that if a public
employee acts directly or indirectly in the interest of an employer, he satisfies the definition of
“employer” under the FMLA and may be subject to individual liability.
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The Supreme Court has held that state employers are not precluded from complying with
the mandates of the FMLA. In Nevada Department of Human Resources v. Hibbs, 538 U.S. 721
(2003), the court held that state employees are entitled to recover pecuniary damages in a federal
court against a state employer where the state fails to comply with the FMLA’s family care
requirements. The court’s decision was based on the premise that Congress may validly abrogate
the states’ Eleventh Amendment immunity to lawsuits in federal court where it is exercising a
valid power under the Fourteenth Amendment and demonstrates its intention to abrogate a state’s
immunity in a clear and unmistakable fashion. The court held that Congress, in enacting the
FMLA’s family leave provision, acted within its authority under the Fourteenth Amendment and
clearly intended to abrogate the states’ immunity to federal suits.
However, in Coleman v. Court of Appeals of Maryland, 132 S. Ct. 1327 (2012), the
Supreme Court recently declined to extend the holding in Hibbs to include FMLA claims brought
pursuant to the self-care provision. Specifically, the Court found that the self-care provision was
not directed at an identified pattern of sex-based discrimination on the part of the States and, thus,
there was no basis to abrogate the State’s immunity from suits for damages.
One court has also applied the joint employer theory to FMLA claims in determining
whether an entity is an employer under the FMLA. The joint employer theory applies where two
or more separate entities exert control over the work or working conditions of an individual
whose work benefits both entities. Under such circumstances, courts employ the joint employer
theory in finding that both entities are employers of the individual for purposes of the FMLA.
Moreau v. Air France, 356 F.3d 942 (9th Cir. 2003). Generally, courts will find joint employers
to exist in the following situations: (1) where the employers reach an arrangement to share an
employee’s services or interchange employees; (2) where one employer acts directly or indirectly
on behalf of the employer in relation to the employee; or (3) where the employers are not
completely removed from the individual’s employment and share control of the employee.
In considering whether an entity is an employer under the joint employer theory, courts
tend to consider the following factors:
•
•
•
•
•
•
•
•
•
•
•
•
•
the nature and degree of control over the worker;
the degree of supervision;
the power to determine compensation rates and methods of payment;
the ability to hire, fire, or modify employment conditions;
preparation of payroll and payment of salary;
the specialization of the work performed;
whether the work performed is an integral part of the entity’s business;
the permanence of the employment relationship;
whether the work units move as a unit to different worksites;
whether responsibilities of the work pass to different contractors pursuant to
contractual agreement;
whether the premises and equipment of the employer are used by the individual;
whether the work was piecework; and
whether the employee had an opportunity to incur profits or losses.
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SERIOUS HEALTH CONDITIONS
A serious health condition is defined by the FMLA as an illness, injury, impairment or
physical or mental condition that involves inpatient care in a hospital, hospice, or residential
medical care facility or continuing treatment by a health care provider. If an employee is taking
leave involving more than three consecutive calendar days of incapacity and two visits to a health
care provider, the two visits must occur within 30 days of the period of incapacity, and the first
must occur within seven days of the start of the incapacity. The same is true for a serious health
condition occasioned by three consecutive days of absence plus a regimen of continuing
treatment, and the first visit must again occur within seven days of the start of the incapacity.
Continuing treatment is defined in Section 825.115 as a period of incapacity of more than
three consecutive, full calendar days, and any subsequent treatment or period of incapacity
relating to the same condition, that also involves: (1) treatment two or more times, within 30 days
of the first day of incapacity, unless extenuating circumstances exist, by a health care provider, by
a nurse under direct supervision of a health care provider, or by a provider of health care services
(e.g., physical therapist) under orders of, or on referral by, a health care provider; or (2) treatment
by a health care provider on at least one occasion, which results in a regimen of continuing
treatment under the supervision of the health care provider.
The DOL’s guidelines define the following as serious health conditions: heart attack;
heart conditions requiring bypass or valve operations; most cancers; back conditions requiring
extensive therapy or surgery; strokes; severe respiratory conditions; spinal injuries; appendicitis;
pneumonia; emphysema; severe arthritis; severe nervous disorders; injuries caused by serious
accidents; ongoing pregnancy; severe morning sickness; the need for prenatal care; childbirth; and
recovery from childbirth.
At least one court has held that various different and perhaps unrelated illnesses all
afflicting a single individual at the same time can suffice to create a serious medical condition
under the FMLA. Price v. Fort Wayne, 117 F.3d 1022 (7th Cir. 1997).
Courts have construed the following conditions as serious health conditions:
•
The flu, under the circumstances where inpatient care or continuing treatment is
required. Miller v. AT&T Corp., 250 F.3d 820 (4th Cir. 2001).
•
Chicken pox, when it required the continuing treatment of a physician. Reich v.
Midwest Plastic Engineering, Inc., 1995 WL 478884 (W.D. Mich. 1995).
•
A peptic ulcer, under certain circumstances. Victorelli v. Shadyside Hosp., 128 F.3d
184 (3d Cir. 1997).
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Courts have construed the following conditions to not be serious health conditions:
•
Carpal tunnel syndrome, because the plaintiff did not receive inpatient care, nor was
she advised to be off work. Price v. Marathon Cheese Corp., 119 F.3d 330 (5th Cir.
1997).
•
An asthmatic condition of an employee’s adult daughter, where the daughter did not
require inpatient care, did not have a continuing asthma condition, and was capable of
self-care. Sakellarion v. Judge & Dolph, Ltd., 893 F.Supp. 800 (N.D. Ill. 1995).
ELIGIBILITY FOR LEAVE
To be eligible under the FMLA, an employee must have been employed by the employer
for at least 12 months and must have worked for at least 1,250 hours during those 12 months. The
12-month period of employment need not have been worked consecutively. In fact, the
regulations allow for a continuous break in employment of up to seven years, based on the DOL’s
belief that a seven-year cap draws an appropriate balance between the interests of employers and
employees. Because employers are only required to maintain an employee’s records for three
years, proof of an employee’s periods of employment in years four through seven might include
W-2 forms; pay stubs; a statement identifying the dates of prior employment, the position the
employee held, the name of the employee’s supervisor, and the names of co-workers; or any
similar information that would allow the employer to verify the dates of the employee’s prior
service. Any application for employment the employee completed could also constitute proof of
employment. The regulations include two exceptions to this seven-year cap: (1) breaks in service
resulting from an employee’s fulfillment of National Guard or Reserve military service
obligations; or (2) breaks where a written agreement exists concerning the employer’s intention to
re-hire the employee after the break in service.
The FMLA regulations specifically address eligibility requirements with respect to
situations where an employee has satisfied the 1,250 hours requirement, but has not met the 12
months of service requirement. When employees are on leave at the time they meet the 12-month
eligibility requirement, the period of leave prior to meeting the statutory requirement is nonFMLA leave and the period of leave after meeting the statutory requirement is FMLA leave.
Furthermore, when an employee’s work schedule varies from week to week, employers are now
directed to use a weekly average over the 12 months preceding the leave period when calculating
an employee’s leave entitlement, rather than considering only the prior 12 weeks.
For purposes of determining an employee’s eligibility, FMLA regulations state that the
worksite of a jointly employed employee is the primary employer’s office from which the
employee is assigned or reports, “unless the employee has physically worked for at least one year
at a facility of a secondary employer, in which case the employee’s worksite is that location.”
This portion of the regulations adopts the holding of Harbert v. Healthcare Services Groups, Inc.,
391 F.3d 1140 (10th Cir. 2004).
Employers should be advised that some courts have held that time during which no work
was performed because of an unlawful termination does count toward the Act’s minimum hours
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requirement. Ricco v. Potter, 377 F.3d 599 (6th Cir. 2004). The Ricco court found those hours to
be different because they constitute hours that an employee would have worked if not for the
employer’s unlawful act. Similarly, in Savage v. Chicago Transit Authority, 2007 WL 809600
(N.D. Ill. 2007), the court credited the plaintiff for hours he would have worked while wrongfully
discharged and found him eligible under the FMLA. However, in Plumley v. Southern Container,
Inc., 303 F.3d 364 (1st Cir. 2002), the court held that the FMLA hours-of-service requirement
only considers hours during which an employee performed actual work, not hours for which
he/she was compensated pursuant to an arbitration award.
Employers should also be aware that former employees may be protected under the Act.
In Smith v. Bellsouth Communications, Inc., 273 F.3d 1303 (11th Cir. 2001), the Eleventh Circuit
held that an applicant for re-employment who claimed he was not hired because he had used
FMLA leave in his prior term of employment was considered an employee for FMLA purposes.
In Babcock v. Bellsouth Advertising and Publishing Corp., 348 F.3d 73 (4th Cir. 2003),
the court held that an employee was not entitled to FMLA leave upon first requesting medical
leave because, at the time of the request, the employee had not been employed with the company
for 12 months and, thus, was not a qualified employee under the FMLA. However, upon the
employee’s second request for leave, which was after the employee’s one-year anniversary with
the company, the employee was a qualified employee under the FMLA and was entitled to the
medical leave requested.
TAKING LEAVE PURSUANT TO THE FMLA
Leave can be taken in a block of time up of to 12 weeks during a 12-month period. Leave
may also be taken intermittently or on a reduced leave schedule if the employer agrees. Further,
if the employee requests leave on an intermittent or reduced leave schedule, the employer may
request that the employee transfer temporarily to an available alternative position with equivalent
pay and benefits which better accommodates recurring periods of leave. However, an employee
who is unable to perform the essential functions of a job is not entitled to an intermittent or
reduced schedule leave under the FMLA. Hatchett v. Philander Smith College, 251 F.3d 670 (8th
Cir. 2001).
Under a “physical impossibility” exception to the regulations, an employer can force
employees to take off an entire shift, but only where the nature of the workplace makes it
physically impossible for employees to start work midway through the shift. The DOL directs
employers to apply the exception narrowly and gives examples such as a flight attendant, train
conductor, or a laboratory technician whose workplace is inside a “clean room” that must remain
sealed for a certain period of time.
If leave is taken due to the birth or placement of a son or daughter, the employee’s
entitlement for leave expires at the end of the 12-month period beginning on the date of the birth
or placement of the son or daughter. If the leave is taken for the illness of a family member, the
employee’s entitlement to leave to care for the sick relative expires upon the relative’s death.
Brown v. J.C. Penney Corp., 924 F.Supp. 1158 (S.D. Fla. 1996).
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The FMLA does not require an employer to grant an employee intermittent leave unless
the employer and employee expressly agree to the intermittent leave of absence. Maynard v.
Town of Monterey, Tenn., 75 Fed. Appx. 491 (6th Cir. 2003). Where the leave is taken to care for
a covered relative with a serious medical condition or because of the employee’s own serious
health condition, leave may be taken intermittently when medically necessary. 29 U.S.C.
2612(b)(1).
Under the regulations, an employer must grant FMLA leave in its smallest payroll
increment, and an employer is now free to use the shortest increment (not to exceed one hour) it
uses to account for other forms of leave. However, employers are not required to account for
FMLA leave in increments of six minutes or even 15 minutes simply because their payroll
systems are capable of doing so. When employees, as a result of FMLA leave, are unable to work
overtime hours that they would have been required to work but for the FMLA leave, the time
missed will count as intermittent or reduced work schedule FMLA leave.
CALCULATING THE YEAR FOR FMLA PURPOSES
The employer may choose one of four methods for determining the 12-month period
during which 12 work weeks of leave may be taken:
(1) the calendar year;
(2) any fixed 12-month year, such as a fiscal year;
(3) the 12-month period measured from when an employee first takes leave; or
(4) a “rolling” 12-month period measured backward from the date an employee uses any
FMLA leave. Under this method, each time an employee takes FMLA leave, the
remaining leave to which that employee is entitled will consist of any balance of the
12 weeks that has not been used during the immediately preceding 12 months.
An employer has an affirmative duty to advise its employees regarding how it will
calculate the 12-month period. Failure to do so will allow the employee to select the 12-month
period most advantageous to him or her. Once an employer has selected the 12-month period of
its choosing, employees must be given 60 days’ notice before any change in the method of
calculation can occur. Additionally, any change to this method must be transitioned in a way that
is of the greatest benefit to employees.
One court has held that merely alerting employees as to which method of calculation will
be used is insufficient. Instead, the notification must be made in consideration of other FMLA
requirements. Dorado v. Village of Glendale Heights, 2003 WL 1720030 (N.D. Ill. 2003). In
Dorado, the employer elected to change its method of calculation to the rolling calendar. In order
to inform its employees of this change, the employer provided each employee with a written
document that expressed the employer’s FMLA policy, including the new method of calculation.
It also included a copy of this document as an attachment to its employee handbook and posted a
copy on an employee bulletin board. The plaintiff argued that this was insufficient to properly
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notify her of the employer’s choice because the policy had not actually been placed within the
employer’s handbook. The Act’s regulations require that if an employer provides “any written
guidance to employees concerning benefits or leave rights, such as an employee handbook,
information concerning FMLA entitlements…must be included in the handbook or other
document.” 29 C.F.R. §825.301(a). The court held that this regulation requires the method of
calculation to be included within a handbook, not a “one-time, stand-alone ‘other document.’”
Consequently, the employee was allowed to choose the 12-month calendar that worked best for
her.
With regard to intermittent leave, the court in Mellen v. Trustees of Boston University, 504
F.3d 21 (1st Cir. 2007), recently held that if an employee’s intermittent leave includes a full
holiday-containing week, the amount of leave used includes the holiday.
For purposes of military caregiver leave, the “single 12-month period” begins on the first
day the eligible employee takes FMLA leave to care for a covered servicemember and ends 12
months after that date. This calculation should be applied regardless of the method an employer
otherwise uses to determine an employee’s entitlement for other FMLA-qualifying leave.
Further, if an eligible employee does not use all 26 work weeks of available leave during this 12month period, the remainder is forfeited.
PAID OR UNPAID LEAVE
Generally, FMLA leave is unpaid leave. However, under the circumstances described in
Section 825.207, eligible employees are permitted to substitute accrued paid leave for FMLA
leave. If an employee chooses not to substitute accrued paid leave, the employer may require the
employee to substitute accrued paid leave for unpaid FMLA leave. The term “substitute” means
that the paid leave provided by the employer and accrued pursuant to established policies of the
employer will run concurrently with the unpaid FMLA leave. On a related note, the regulations
also provide:
•
Employers’ paid leave policies apply and must be followed by employees in order to
substitute any form of accrued paid leave, including paid vacation, personal leave,
family leave, paid time off, or sick leave.
•
Employers must make employees aware of any additional requirements for the use of
paid leave and must inform employees that they remain entitled to unpaid FMLA leave
even if they choose not to follow the employer’s paid leave policies.
•
Employers must count paid disability due to an FMLA-qualifying serious health
condition against an employee’s FMLA leave entitlement, regardless of whether
employees are using paid leave to supplement the disability benefits.
•
Workers’ compensation leave may be counted against the employee’s FMLA
entitlement.
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The sections of the FMLA covering the substitution of paid leave for unpaid leave do not
apply when employees receive disability benefits during FMLA leave. However, by agreement
between an employer and employee, paid leave and FMLA leave can run concurrently to
supplement disability benefits. Similarly, this can also be done to supplement workers’
compensation benefits.
When an employer’s procedural requirements for taking paid leave are less stringent than
the requirements of the FMLA, employees can be required to comply with higher FMLA
standards. Indeed, employers may require FMLA medical certification even when paid leave is
substituted. Employers may require sufficient certification in support of any request for FMLA
leave for either the employee’s own or a covered family member’s serious health condition.
EMPLOYER NOTICE REQUIREMENTS
Every employer covered by the FMLA is required to post a notice explaining the Act’s
provisions and providing information concerning the procedures for filing complaints of
violations of the Act. Covered employers must post a general FMLA notice even if they do not
have FMLA-eligible employees. Employers may provide the general FMLA notice describing
benefits and leave to their employees via employee handbooks or policies. Employers that do not
have an employee handbook or policies must provide FMLA notice to each employee when
he/she is hired.
If a significant portion of an employer’s staff is not literate in English, the employer is
obligated to provide the general notice in a language in which the employees are literate.
Employers may satisfy their posting requirements through an electronic posting, as long as the
posting otherwise meets the regulatory requirements. However, paper notices must be posted in
locations readily visible to employees who do not have access to company computers and to
applicants who do not apply via electronic means. Thus, electronic-only posting is not permitted
unless all employees and applicants have access to electronic information.
With respect to employers’ notice requirements, Section 825.301(b) separates the
individual notice requirements into two requirements or phases: “Eligibility/Rights and
Responsibilities” notice and “Designation” notice. There are two optional forms that discuss these
requirements: one that advises employees of their FMLA eligibility and rights, and another which
formally designates leave as FMLA leave.
The regulations also include an “eligibility notice” that clarifies employees’ rights to
leave. When employees request FMLA leave or when employers acquire knowledge that an
employee’s leave may be for an FMLA-qualifying reason, employers must notify employees of
their eligibility to take FMLA leave within five business days, absent extenuating circumstances.
Employers should be aware of the mandatory Form WH-381, which combines the written notice
of “rights and responsibilities” required by the regulations.
The regulations also include a “rights and responsibilities” form, which serves to clarify
the expectations of employees. At the time of their eligibility notice, employees eligible for
FMLA leave must also receive a written notice of “rights and responsibilities.” This notice
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details the specific expectations and obligations of employees and explains any consequences of
their failure to meet these expectations and obligations. In the notice, employers must inform
FMLA-eligible employees of any requirement to provide medical certification, whether and how
to pay premiums for continuing benefits, the right to substitute paid leave, and job restoration
rights upon expiration of FMLA leave, among other things. If employers ask employees to
complete an FMLA medical certification form, this notice of rights and responsibilities may
accompany such form. The notice may be distributed electronically so long as it otherwise meets
the requirements of the regulations. Therefore, employers do not need to provide a “preliminary”
or “provisional” designation of FMLA leave. Rather, employers may delay actual designation
until five business days after they receive medical certification and any other required information
once the eligibility notice has been provided.
The regulations’ “designation notice” requirements mandate that after an employer has
obtained sufficient information to determine whether an employee’s leave will fall within the
coverage of the FMLA, the employer must notify the employee within five business days that the
leave is designated as FMLA leave, absent extenuating circumstances. Employers should note
that this is a change from the requirement of two business days under the previous regulations. It
is clear that if employers have sufficient information, they may provide the “eligibility” and
“designation” notices simultaneously. Violations of the notice requirement could result in civil
penalties of up to $100.00 for each separate offense.
EMPLOYEE NOTICE REQUIREMENTS
Employees must give at least 30 days’ notice when the need for FMLA leave is
foreseeable. When leave is unforeseeable, employees’ notice must be given as soon as
practicable. This also applies when the leave is foreseeable but 30 days’ notice is not practicable.
However, employees who provide less than 30 days’ notice may be required by their employer to
explain why it was not practicable to do so.
Where an employee becomes aware of the need for FMLA leave less than 30 days in
advance, the regulations assume it is “practicable” for the employee to provide notice of the need
for leave either the same day or the next business day, absent emergency situations. Employers
may require that employees requesting FMLA leave comply with usual and customary notice and
procedural requirements. Such requirements may include providing written notice of the
following with respect to the leave: the reasons, the anticipated start, and the duration of the leave.
Employers may also require that employees contact a specific individual to request leave.
The regulations make clear that employees must specifically reference the qualifying
reason for leave or the need for FMLA leave when seeking leave for an FMLA-qualifying reason
for which their employers have previously provided FMLA-protected leave.
While the content of an employee’s notice to take FMLA leave need not assert his/her
rights under the FMLA, the regulations do require fuller employee explanations to trigger FMLA
protections. In order to allow the employer to determine whether the leave triggers FMLA
protection, employees must sufficiently explain the reasons for their leave. While it does not
appear that any actions qualify as per se sufficient to provide notice, if an employee fails to
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explain the reasons for the leave, leave may be denied. Simply “calling in sick” is insufficient.
Rather, “sufficient information” may include, but is not limited to, information that an employee:
(i) is unable to perform the functions of his or her job; (ii) is pregnant or has been hospitalized
overnight; (iii) is under the continuing care of a health care provider; or (iv) is with a family
member under the continuing care of a health care provider. The regulations also provide: “[i]t
generally should be practicable for the employee to provide notice of leave that is unforeseeable
within the time prescribed by the employer’s usual and customary notice requirements applicable
to such leave.”
Under authority granted to it by Congress, the Department of Labor issued regulations
placing an affirmative duty upon employers to review an employee’s request for leave and notify
the employee within a reasonable time of whether or not the leave is acceptable under the FMLA.
Nonetheless, in light of the Supreme Court’s decision in Ragsdale v. Wolverine World Wide, 535
U.S. 81 (2002), the regulations state that retroactive designation is permitted where no harm or
injury will be caused. Thus, if the employer fails to provide notice in a timely manner and the
failure to do so does not cause harm or injury to the employee, retroactive notice is permitted.
Further, employers and their employees can always mutually agree to the retroactive labeling of
certain absences as FMLA leave whenever they would qualify as such under the FMLA.
Formerly, employees needing intermittent FMLA leave or leave on a reduced leave
schedule were required to “attempt” to schedule their leave so as not to disrupt the employer’s
operations. Based on the consensus that this did not fully describe the employee’s obligation
under the law, the regulations now require that employees who need foreseeable leave for planned
medical treatment must make a “reasonable effort” to schedule the treatment so as not to disrupt
unduly the operations of the employer. Moreover, employers can initiate discussions about
making such scheduling arrangements. The regulations state in pertinent part:
“When planning medical treatment, the employee must consult with
the employer and make a reasonable effort to schedule the leave so
as not to disrupt unduly the employer's operations, subject to the
approval of the health care provider. Employees are ordinarily
expected to consult with their employers prior to the scheduling of
treatment in order to work out a treatment schedule which best suits
the needs of both the employer and the employee. If an employee
who provides notice of the need to take FMLA leave on an
intermittent basis for planned medical treatment neglects to consult
with the employer to make a reasonable attempt to arrange the
schedule of treatments so as not to unduly disrupt the employer's
operations, the employer may initiate discussions with the employee
and require the employee to attempt to make such arrangements,
subject to the approval of the health care provider.”
29 C.F.R. § 825.302(e)
Moreover, one court has held that if an employee fails to consult with the employer before
scheduling intermittent leave, the employer may require the employee to attempt to make
arrangements that do not disrupt business operations, subject to the approval of the employee's
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health care provider. Anderson v. New Orleans Jazz & Heritage Festival and Foundation,
Inc., 464 F.Supp.2d 562, 568 (E.D.La. 2006).
HUSBAND AND WIFE EMPLOYED BY THE SAME EMPLOYER
Where a husband and wife are employed by the same employer, they are only entitled to a
total of 12 work weeks of FMLA leave if the leave is taken for the birth, adoption, or placement
of a child in foster care, or to care for a sick parent. 29 U.S.C. § 2612(f). However, employers
are not permitted to aggregate the workweeks of spouses who need time of for their own serious
health conditions, or to care for a sick spouse or a child. Moreover, if a husband and wife both
use a portion of the total 12 week aggregated leave for a reason set forth in 29 U.S.C. § 2612(f),
each spouse would still be entitled to the difference between the amount he or she has taken
individually and the 12 weeks of FMLA leave for a purpose other than those contained in 29
U.S.C. (f). 29 C.F.R. § 825.202.
SUPPORTING DOCUMENTATION
An employer may require that a request for FMLA leave be supported by a certification
provided by the health care provider of the employee or of the son, daughter, spouse or parent of
the employee. The regulations also mandate the use of different medical certifications for
employees and family members. Under the regulations, one specific medical certification form
must be filled out by employees for use by employers in evaluating the medical need for leave
prompted by an employee’s own serious health condition. However, a different medical
certification form must be filled out when employees request leave to care for a family member.
In the family member form, employees are asked to provide information regarding the type of
care employees are offering their seriously ill family members. Employers should benefit from
having greater insight into the reasons employees are unable to perform their job functions.
Employers are required to give employees notice of the certification requirement and the
consequences of failing to provide sufficient documents of certification. Generally, an employee’s
certification is sufficient if it identifies the following:
(1)
(2)
(3)
(4)
the date that the serious health condition began;
the probable duration of the serious health condition;
the medical facts within the knowledge of the health care provider; and
a statement that the employee is unable to perform the duties of his/her position.
Formerly, the regulations stated that employers should request that an employee furnish
certification from a health care provider at the time the employee gives notice of the need for
leave or within two business days thereafter, or in the case of unforeseen leave, within two
business days after the leave commences. The regulations now increase the timeframe for
requesting certification from two to five days after an employee gives notice of the need for leave
or, in the case of unforeseen leave, the date the employee commences leave.
Employers must notify employees of certification deficiencies under the regulations.
Specifically, the regulations require that employers provide employees with written notification
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specifying what additional information is needed in order to complete the medical certifications.
Following written notification explaining the certification deficiencies, the employer is required
to provide the employee with seven calendar days to provide the additional information. It is not
until the employee fails to submit a complete and sufficient certification despite the opportunity to
cure the deficiency that the employer may deny the requested FMLA leave.
While the regulations allow an employer to communicate directly with an employee’s
health care provider to authenticate or clarify a medical certification, this can only happen if the
employee chooses to comply with the certification requirement by providing the employer with an
authorization, release, or waiver. Employers are not permitted to require that employees provide
such an authorization, release, or waiver. Rather, such an option may only be provided to the
employee. Even if the employee signs a waiver enabling the employer to speak with a health care
provider, it is still the employee’s responsibility to provide the employer with complete and
sufficient certification, and failure to do so may result in the denial of FMLA leave. Further, the
employer must use a health care provider, a human resources professional, a leave administrator,
or a management official to communicate with the employee’s health care provider. Under
absolutely no circumstances may the employee’s direct supervisor contact the employee’s health
care provider.
In cases where a serious health condition extends beyond a single leave year, the
regulations allow for annual medical certification. However, an important exception to this rule
applies to certification submitted in support of a request for leave related to an injured
servicemember. In cases involving continuing, open-ended conditions, employers are permitted
to request medical recertification every six months, rather than after passage of the specified
minimum duration of the condition. Further, employers may request medical recertification more
frequently if certain circumstances change.
The regulations enable employers to demand more than a “simple statement” from
employees regarding their ability to return to work. Employers may seek a fitness-for-duty
certification that requires the health care provider to address the employee’s ability to perform the
essential functions of his or her job, but only with regard to the particular health condition that
caused the employee’s need for FMLA leave.
If employers have reasonable safety concerns, they may also request that employees
provide fitness-for-duty certification for intermittent leave. However, employers may not seek
certification of fitness for each absence taken. Instead, employers may obtain certification of
fitness for intermittent absences up to once every 30 days, provided reasonable safety concerns
exist. If employers want fitness-for-duty certification under such circumstances, employees must
be notified of the requirement at the same time employers issue their designation notice.
Employers are prohibited from terminating employees while they await this certification.
Reasonable safety concern means reasonable belief of significant risk of harm to the individual
employee or to others. In determining whether a reasonable safety concern exists, an employer
should consider the nature and severity of the potential harm and the likelihood that the potential
harm will occur.
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If an employee refuses to undergo a medical exam at the employer’s request, the employee
is barred from bringing an FMLA suit against the employer. Diaz v. Fort Wayne Foundry Corp.,
131 F.3d 711 (7th Cir. 1997). The court in Diaz held that the plaintiff could not bring an FMLA
cause of action against the defendant because the plaintiff refused to submit to a medical
examination. The court stated that the two differing medical certifications provided by the
plaintiff gave the employer adequate room to doubt the validity of those certifications, and gave
the employer the right to insist on another certification.
However, the employee must be on notice of the employer’s policy regarding
documentation of the condition in order to obtain FMLA leave. Reich v. Midwest Plastic
Engineering, Inc., 1995 WL 478884 (W.D. Mich. 1995). In Reich, the court held that an
employer’s requirement that employees present a doctor’s note verifying a medical condition did
not satisfy the FMLA request for certification since the requirement, which was set forth in the
employee handbook, did not advise employees of the consequences of failure to provide the
doctor’s note. The employer may rely on a physician’s certification, in the absence of overriding
medical evidence, which indicates that the employee is not entitled to leave under the FMLA.
Stoops v. One Call Communications Inc., 141 F.3d 309 (7th Cir. 1998).
The regulations recognize that an employee’s serious health condition may also bring into
issue the Americans with Disabilities Act, requests for paid leave, or workers’ compensation
benefits. According to FMLA regulations, employers are permitted to follow procedures for
requesting medical information under the ADA or paid leave or workers’ compensation programs
without violating the FMLA. The regulations further provide that employers may also consider
any information received pursuant to these other methods when determining an employee’s
entitlement to FMLA-protected leave.
ENFORCEMENT
It is unlawful under the FMLA for an employer to interfere with, deny or restrain any right
provided under the FMLA. An action for damages for an FMLA violation may be brought in any
federal or state court of competent jurisdiction by or on behalf of the employee alleging the
violation. It is also possible to state a claim of retaliation under the FMLA where a plaintiff can
show that an employer discharged the plaintiff for exercising his/her rights under the FMLA.
Richmond v. Oneok, Inc., 120 F.3d 205 (10th Cir. 1997). A jury trial is available to a plaintiff in
cases brought under the FMLA.
An employer will be held liable if it is shown that an employee was terminated for
exercising his/her rights under the FMLA. Clay v. Chicago Dept. of Health, 143 F.3d 1092 (7th
Cir. 1998). The court in Clay held that an employer did not violate the FMLA when it fired an
employee after her leave ended. In this case, the employer’s careful documentation of the
employee’s poor performance supported its argument that it would have discharged the employee
even if she had not taken leave.
However, the FMLA does not protect ineligible employees who improperly attempt to
invoke their right to protection from retaliation. Walker v. Elmore County Brd. of Edu., 379 F.3d
1249 (11th Cir. 2004). In Walker, a school teacher who was not yet eligible for leave under the
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FMLA informed her employer that she was pregnant and requested maternity leave beginning
post-delivery. However, the date on which her leave was to begin was several days before she
would become eligible for leave under the FMLA. Her contract was subsequently not renewed.
In denying the plaintiff’s retaliation claim, the court held that “[t]here can be no doubt that the
request – made by an ineligible employee for leave that would begin when she would still have
been ineligible – is not protected by the FMLA.” The court based its decision on the text of the
FMLA itself, which prohibits interference with an attempt to exercise rights provided under the
FMLA. Because there is no right under the Act for leave beginning before an employee is
eligible, there could be no retaliation. However, the court specifically avoided the question of
whether the FMLA protects a pre-eligibility request for post-eligibility leave, and employers
should be wary of such circumstances as the issue is far from resolved.
Courts will uphold a termination if the employer is capable of asserting a legitimate
purpose for terminating an employee that is not related to or a result of the employee exercising
his or her FMLA rights. For example, in Phelan v. City of Chicago, 347 F.3d 679 (7th Cir. 2003),
the plaintiff was discharged by the City of Chicago while he was on medical leave for a shoulder
injury. The court held that the employee’s termination while on medical leave was not in
violation of the FMLA because the City of Chicago established that the quality of the employee’s
work was poor and that the employee was indicted for mail fraud. This decision was based on the
fact that the FMLA does not entitle an employee to “any right, benefit, or position of employment
other than that which the employee would have been entitled had the employee not taken leave.”
29 U.S.C. §2614(3).
The Secretary of Labor may also investigate complaints regarding violations of the
FMLA, pass regulations concerning enforcement of the FMLA, and file complaints in court on
behalf of employees. However, the Secretary of Labor may not pass regulations that contradict
the FMLA. Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81 (2002). In Ragsdale, the
Supreme Court held that the Secretary of Labor did not have the authority to enact 29 CFR
§825.700(a), which allowed an additional 12 weeks of leave if the employer did not provide the
employee notice that an absence from work was designated as leave under the FMLA. The Court
held that this regulation was not enforceable because it directly conflicted with the FMLA’s
allowance of a maximum of 12 weeks of leave. But see Stansberry v. Uhlich Children’s Home,
264 F.Supp.2d 681 (N.D. Ill. 2003) (indicating that this is a question of fact).
PROVING AN FMLA CLAIM
Federal circuit courts are split on the issue of whether the McDonnell Douglas burdenshifting framework (explained in the Title VII section of this manual) is applicable in claims
brought under the FMLA. One court has specifically held that the burden-shifting framework is
not appropriate in cases where an employee is terminated as a result of practicing his/her FMLA
rights. Liu v. Amway Corp., 347 F.3d 1125 (9th Cir. 2003). This theory is based on the fact that
such claims do not depend on discriminatory conduct because the employer treating the
employee different than it treats other employees is not what is at issue. Rather, the issue is
whether the employer failed to recognize and interfered with an employee’s FMLA rights, which
all employees enjoy. Thus, these courts have held that the traditional discrimination burdenshifting analysis of McDonnell Douglas is not applicable to the FMLA because it does not
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analyze the treatment of one employee versus the others, but rather applies to each individual
employee’s rights on a separate basis. Diaz v. Fort Wayne Foundry Corp., 131 F.3d 711 (7th Cir.
1997).
RECORDKEEPING REQUIREMENTS
An employer is required to preserve records pertaining to its obligations under the FMLA
for a minimum of three years. The DOL may not require any employer to submit its books and
records more than once over any 12-month period unless the DOL has reasonable cause to believe
that a violation exists.
Records kept in accordance with the FMLA must disclose the following:
(1) Basic payroll and identifying employee data, including name, address, and occupation;
rate or basis of pay and terms of compensation; daily and weekly hours worked per
pay period; additions to or deductions from wages; and total compensation paid.
(2) Dates FMLA leave is taken by FMLA-eligible employees (available from time
records, requests for leave, etc., if so designated). Leave must be designated in records
as FMLA leave; leave so designated may not include leave required under state law or
an employer plan which is not also covered by FMLA.
(3) If FMLA leave is taken by eligible employees in increments of less than one full day,
the hours of the leave.
(4) Copies of employee notices of leave furnished to the employer under the FMLA, if in
writing, and copies of all general and specific written notices given to employees as
required under the FMLA and these regulations (see Sec. 825.301(b)). Copies may be
maintained in employee personnel files.
(5) Any documents (including written and electronic records) describing employee
benefits or employer policies and practices regarding the taking of paid and unpaid
leave.
(6) Premium payments of employee benefits.
(7) Records of any dispute between the employer and an eligible employee regarding
designation of leave as FMLA leave, including any written statement from the
employer or employee regarding the reasons for the designation and for the
disagreement.
Any records regarding medical certifications pursuant to the FMLA must be maintained in
separate files and treated as confidential medical records.
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RETURNING AFTER THE LEAVE PERIOD EXPIRES
After a period of FMLA leave expires, the employee must be restored to the same position
or to a position that is equivalent and offers the same benefits, pay, and terms and conditions.
There is an exception, however, for certain highly compensated employees. If restoration
to the same or an equivalent position would cause substantial or grievous economic injury to the
operations of the employer, the employer may deny restoration to the same or equivalent position,
provided that the employer gives notice to the employee when the employer determines that such
injury would occur. This exception applies to a salaried employee who is among the highest-paid
10% of the employees employed by the employer within a 75-mile radius.
The new FMLA regulations clarify that an employee’s right to FMLA leave and job
restoration are not affected by light-duty assignments. Essentially, the employee’s right to job
restoration is on hold during the period of time the employee performs a light-duty assignment.
To be clear, time spent performing light duty does not count toward FMLA entitlement. At the
conclusion of the voluntary light-duty assignment, the employee has the right to be restored to the
position he or she held at the time the employee’s FMLA leave commenced, or the employee may
use the remainder of his/her FMLA leave entitlement.
HEALTH BENEFITS DURING THE LEAVE
The employer must maintain health coverage for the employee under any group plan
under the same terms and conditions as if the employee had continued in employment for the
duration of the leave. If, however, the employee fails to return from leave, the employer may
recover the premium paid for maintaining coverage for that employee for the duration of the
leave. This does not apply if the employee fails to return from leave due to the continuance,
recurrence or onset of a serious health condition that would entitle the employee to leave under
the FMLA.
If the employer provides a benefit program that is more generous than the FMLA, the
employer must observe that program. An employer’s benefit program cannot diminish rights
allowed under the FMLA. Further, if the employer provides rights more generous than the
FMLA, the employer is not required to extend as additional rights those afforded by the FMLA.
If an employee takes unpaid leave or fails to designate a period of leave as FMLA leave, the
employee is not entitled to an additional 12 weeks of leave under the FMLA.
The FMLA does not supersede any state or local law that provides for greater family or
medical leave rights.
DAMAGES
If a court finds an employer liable under the FMLA, damages can include any wages,
salary, employment benefits or other compensation denied or lost by reason of the violation. This
includes both back pay and front pay. Taylor v. Invacare Corp., 64 Fed. Appx. 516 (6th Cir.
2003). In Taylor, the court held that an employer did not act reasonably in terminating an
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employee based upon the employee’s use of protected time off, which warranted an award of
back pay and interest under the FMLA. Also, several courts have held that supervisors may be
held individually liable to plaintiffs claiming violations of the FMLA.
Additional actual monetary losses sustained by the employee as a result of the violation
may be recovered. Equitable relief such as employment, reinstatement or promotion may also be
granted. For instance, an employee who is fired upon taking medical leave may be entitled to
reinstatement, in addition to lost wages, if the employee can establish that the employer
terminated the employee because of his medical leave. Arban v. West Publishing Corp., 345 F.3d
390 (6th Cir. 2003). Finally, the court may award attorneys’ fees to a prevailing plaintiff.
The regulations provide for increased liability for failure to provide timely and written
notice of leave designation. Specifically, an employer’s failure to provide written notice can now
clearly be considered as “interference” with an employee’s FMLA rights. Potential damages
available for interference claims are expanded under the regulations and include “any other relief
tailored to the harm suffered.”
Increased damages are also available for harm caused by interference with FMLA rights.
The remedies for interfering with an employee’s rights under the FMLA are included in the
regulations. Under the regulations, employers may be liable “for compensation and benefits lost
by reason of the violation, for other actual monetary losses sustained as a direct result of the
violation, and for appropriate equitable or other relief, including employment, reinstatement,
promotion, or any other relief tailored to the harm suffered.”
RELEASES OF LIABILITY
Employers often enter into private agreements whereby they ask employees to sign an
agreement waiving claims under the FMLA in exchange for monetary or other forms of
consideration from the employer. The legality of this practice has created a split among federal
courts of appeal.
Additionally, settlement of past FMLA claims is now permitted. Specifically, the
regulations state that the FMLA’s waiver provisions apply only to prospective FMLA rights.
Thus, it is now clear that employees may voluntarily settle FMLA claims involving retrospective
rights without court or DOL approval. The regulations resolve a circuit split among appeals
courts. Consequently, general releases should be amended to include a waiver of FMLA claims.
MILITARY-RELATED FMLA LEAVE
The National Defense Authorization Act of 2008 (“NDAA”) amended the FMLA to
extend leave to families of servicemembers. The NDAA provides eligible employees working for
covered employers with two important rights related to military service: (1) “qualifying exigency
leave” and (2) “military caregiver leave.”
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Qualifying Exigency Leave
As stated above, the NDAA provides for an additional qualifying reason for leave.
Eligible employees are entitled to up to 12 weeks of leave for “a qualifying exigency” arising out
of the fact that the spouse, son, daughter, or parent of the employee is on active duty, or has been
notified of an impending call to active duty status in support of a contingency operation. The
regulations define the term “qualifying exigency” to include the following situations: (1) shortnotice deployment; (2) military events and related activities; (3) childcare and school activities;
(4) financial and legal arrangements; (5) counseling; (6) rest and recuperation; (7) postdeployment activities; and (8) additional activities to address other events which arise out of the
covered servicemember’s active duty or call to active duty status, provided the employer and
employee agree that such leave shall qualify as an exigency and agree to both the timing and
duration of such leave. Also important, a new optional WH384 form has been adopted to allow
employees to self-certify the reasons to support their claims of qualifying exigencies.
Military Caregiver Leave
In order to be eligible for FMLA leave to care for a covered servicemember, an employee
must be the spouse, son, daughter, parent, or next of kin of the covered servicemember who is
recovering from a serious illness or injury sustained in the line of duty on active duty. This
“military caregiver leave” is available during a single 12-month period, during which an eligible
employee is entitled to a combined total of 26 weeks of all types of FMLA leave. As evidenced,
for this type of leave, the legislation expands the definition of “covered employee” to include
“next of kin” of the covered servicemember.
A son or daughter of a covered servicemember is defined as any biological, adopted or
foster child, stepchild, legal ward, or a child for whom the covered servicemember stood in loco
parentis, and who is of any age. A parent of a covered servicemember is defined as any
biological, adoptive, step or foster father or mother, or any other individual who stood in loco
parentis to the covered servicemember. The next of kin of a covered servicemember is the
nearest blood relative other than the spouse, parent, son, or daughter, in the following order of
priority:
•
•
•
•
•
blood relatives who have been granted legal custody
brothers and sisters
grandparents
aunts and uncles
first cousins
Under the regulations, servicemembers are permitted to specifically designate – in writing
– another blood relative as his/her nearest blood relative for purposes of military caregiver leave
under the FMLA. When no such designation is made, and there are multiple family members
with the same level of relationship to the covered servicemember, all such family members shall
be considered the covered servicemember’s next of kin and may take FMLA leave to provide care
to the covered servicemember, either consecutively or simultaneously. An employer is permitted
to require an employee to provide confirmation of family relationship to the covered
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servicemember, which may be done by a simple statement by the employee, a child’s birth
certificate, or a court document.
Changes to the Military Leave Entitlement
The NDAA for 2010 has expanded qualifying exigency leave to permit an eligible
employee to take FMLA leave for a qualifying exigency related to the deployment of a son,
daughter or parent who is a member of a regular component of the Armed Forces, as opposed to
just the Reserves or National Guard as was previously the case. In addition, the call to active
duty or notice of an impending call or order to active duty is no longer limited to those related to
“contingency operations.” Instead, covered active duty now relates to when a member of the
regular or reserve components of the Armed Forces is deployed to any foreign country.
The NDAA for 2010 also expanded the definition of a “covered servicemember” to
include a veteran who is undergoing medical treatment, recuperation or therapy for a serious
injury or illness and who was a member of the Armed Forces, including the National Guard and
Reserves, at any time during the five-year period preceding the date on which the veteran
undergoes medical treatment, recuperation or therapy.
Third, the recent amendment expands the definition of a “serious injury or illness” to
include an injury or illness that was incurred by the covered servicemember before the
servicemember’s active duty and was aggravated by service in the line of duty while on active
duty. Further, a serious injury or illness of a veteran now encompasses an injury or illness
incurred in the line of duty while on active duty, or which existed prior to active duty but was
aggravated by service in line of duty while on active duty, and that manifested itself either before
or after the covered servicemember became a veteran.
Taking Military-Related Leave
The regulations provide that the number of leaves to care for covered servicemembers is
available on a per-covered-servicemember, per-injury basis. Thus, eligible employees are
permitted to take more than one period of leave if the leave is to care for different covered
servicemembers or to care for the same servicemember with a different serious injury or illness.
Nonetheless, no more than 26 work weeks of leave may be taken within any “single 12-month
period.” Simply put, eligible employees may take 26 weeks of leave to care for one covered
servicemember in one 12-month period, and then take another 26 weeks in a different 12-month
period to care for a different servicemember, or for the same servicemember with a different
injury or illness.
The regulations prohibit the overlapping of servicemember and family/medical leaves.
Therefore, leave that qualifies both as leave to care for a covered servicemember and leave to care
for a family member with a serious health condition during the “single 12-month period” cannot
be counted as both types of leave. Employers must designate the leave as military caregiver leave
first.
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As stated above, based on the 2008 amendments to the FMLA, an eligible employee may
take up to 26 work weeks of leave during a single 12-month period to care for a servicemember.
Nonetheless, leave to care for an injured servicemember, when combined with other FMLAqualifying leave, may not exceed 26 weeks in a single 12-month period.
Military-Related Notice Requirements
When seeking qualifying exigency leave, an employee must provide notice to his/her
employer as soon as practicable. This requirement stands regardless of how far in advance such
leave is foreseeable. Further, the employee must provide at least verbal notice sufficient to make
the employer aware that the employee needs leave due to a qualifying exigency, that a covered
servicemember is on active duty or called to active duty status, and that the requested leave is for
one of the reasons listed in the regulations. Thus, employees are not required to notify their
employers at the first moment they become aware of a covered family member’s active duty or
call to active duty status. Because many employees with a covered servicemember may never use
qualifying exigency leave, such a requirement would be unnecessary and burdensome.
Documentation Required for Military-Related Leave
According to the regulations, certification requirements for taking leave to care for a
covered servicemember are necessarily different from those for taking leave to care for a family
member with a serious health condition because the “triggers” for taking each type of leave are
different. The Military Family Leave Amendment’s definitions of “serious injury or illness” and
“covered servicemember” contain specific components that are unique to military
servicemembers, which would not adequately be addressed if the certification requirements for a
serious health condition were adopted for purposes of military caregiver leave. Moreover,
adopting the existing FMLA certification requirements for purposes of military caregiver leave
would permit an employer, in some instances, to obtain medical and other information that is not
relevant to support a request to take FMLA leave to care for a covered servicemember.
Nonetheless, certification for military caregiver leave should contain certain information
about the need for leave that is also required of individuals requesting FMLA leave to care for a
family member with a serious health condition. An employer can require that the certification
contain the following:
(1) A statement or description, signed by the employee, of appropriate facts regarding the
qualifying exigency for which FMLA leave is requested and any available supporting
documentation (such as a meeting announcement or a copy of a bill for services for
handling a legal or financial matter);
(2) The approximate date on which the qualifying exigency commenced or will
commence;
(3) If leave is requested for a single, continuous period, the beginning and end dates for
the absence;
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(4) If leave is requested on an intermittent or reduced schedule, an estimate of the
frequency and duration of the qualifying exigency; and
(5) If the qualifying exigency involves meeting with a third party, appropriate contact
information for the individual or entity and a brief description of the purpose of the
meeting.
The regulations include a new optional WH385 Form for use in obtaining medical certifications
of Military Caregiver Leave.
Further, employees must provide certification of the need for leave because of a qualifying
exigency. The regulations establish that an employer may require that the employee provide a
copy of the covered servicemember’s active duty orders or other documentation issued by the
military which indicates that the covered servicemember is on active duty (or has been notified of
an impending call or order to active duty) in support of a contingency operation, and the dates of
the covered servicemember’s active duty service. Each time leave is first taken for one of the
qualifying exigencies, an employer may require an employee to provide a certification that sets
forth certain information. Employers may use the optional form (WH-384) or a different form;
however, no information beyond the scope of that requested in the optional form may be
requested.
Employers cannot require additional information if the submitted forms are complete and
sufficient. However, if the qualifying exigency requires meeting with a third party, the employer
may contact the third party to verify the meeting or appointment schedule and nature of the
meeting between the employee and the third party. To do this, the employee’s permission is not
required. Alternatively, an employer may contact the Department of Defense to request
verification that a covered servicemember is on active duty or called to active duty status, again
without obtaining the permission of the employee. In contacting the third party or the Department
of Defense, no other information may be requested.
COMMON FMLA ISSUES ARISING IN THE WORKPLACE
Vague Healthcare Provider Form
Often, the Healthcare Provider Form supporting an employee’s intermittent absences due
to his own serious health condition is too vague. The employer is not stuck with the form as
submitted by the employee. Rather, the employer should use the new FMLA Certification Form
(Form WH-380-E).
The new Certification Form asks doctors for more specific information than the previous
form. The employer should also provide the employee with a new Designation Form, if the form
is incomplete, which tells the employee exactly what is missing from his Certification Form. The
new form requires a doctor to include his or her specialization, more medical facts, and if
intermittent leave is required for unforeseeable reasons, an estimate of the frequency and duration
of the episodes of incapacity.
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Who Should Fill Out the Healthcare Provider Form?
It is common for employers to allow employees requesting FMLA leave to fill out their
own Healthcare Provider forms. This is not a good practice. The first section of the form should
be filled out by the employer. The section asks for the employer’s name and contact information,
employee’s job title, and the essential functions of the employee’s job. This is the employer’s
opportunity to communicate with the doctor about the employee’s job. This is critically important
because the doctor must indicate on the form whether the employee is unable to perform any of
the essential functions of his job due to his health condition, and identify the particular job
functions the employee is unable to perform. Employers should not leave it up to their employees
to accurately identify the essential functions of their position.
On a somewhat related note, employers should be aware of a recent circuit court decision
which held that an employee’s alteration of the Healthcare Provider Form may invalidate FMLA
leave. In Smith v. The Hope School, 560 F.3d 694 (7th Cir. 2009), the 7th Circuit Court of
Appeals addressed the issue of whether an employer can deny FMLA leave to which an employee
might otherwise be entitled because the employee submitted false paperwork. Smith involved a
situation where an employee altered her health care provider’s certification to add an impairment
that had not been diagnosed by that provider. The appeals court upheld the lower court’s
summary judgment in favor of the employer, finding that the employee’s alteration invalidated
the entire application.
Suspicious Intermittent Leave Patterns
Employers often find themselves in situations where an employee who has been certified
for intermittent leave routinely takes off Mondays, Fridays, and Saturdays. Even if the
intermittent leave certification is proper, employers are not without the ability to address this kind
of issue.
According to the Code of Federal Regulations relating to the FMLA, employees are
required to make a “reasonable effort” to schedule leave so that it does not disrupt their
employer’s operations. Moreover, if an employee is planning on taking intermittent leave,
employers can initiate discussions about making such scheduling arrangements. 29 C.F.R. §
825.302(e).
In addition, employers are now allowed to ask for recertification when the circumstances
described by the previous certification have changed significantly. For example, when there is a
suspicious pattern of the employee taking unscheduled FMLA intermittent leave adjacent to
scheduled days off, the employer may provide the health care provider with a record of the
employee’s absence pattern and ask the health care provider specifically to comment as to
whether the serious health condition and the need for leave are consistent with such a pattern.
The general rule is that an employer may require recertification of a serious health
condition no more frequently than the duration of the prior certification or every 30 days,
whichever period is longer. However, regardless of the duration of the original certification, the
employer may require recertification every six months in connection with an absence.
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However, there are several exceptions that allow an employer to obtain recertification
more frequently than every 30 days. More frequent recertification may be required if:
•
The employee requests an extension of the leave.
•
The circumstances described by the previous certification have changed
significantly. The regulations refer to changes in the duration or frequency of
absences or the nature or severity of the illness. For example, a medical
certification stated that an employee would need leave for one or two days
periodically when the employee had a migraine headache, but the employee’s
absences for migraines tend to last for four or more days. Another example might
be a suspicious pattern of the employee’s taking unscheduled FMLA intermittent
leave adjacent to scheduled days off. Either of these cases might constitute
changed circumstances that would allow a recertification in less than 30 days.
•
The employer receives information that casts doubt upon the employee’s stated
reason for the absence or the continuing validity of the certification. The
regulations offer the example of an employee who obtains FMLA leave for four
weeks due to knee surgery, but then is discovered playing in the company softball
league during the third week of leave.
Other Employment while on FMLA Leave
Sometimes a situation may arise where an employer discovers that an employee who is
properly on FMLA leave is working for another employer while on leave. An employer’s options
for prohibiting this situation depend upon the employer’s policies. If the employer has a
uniformly-applied policy governing outside or supplemental employment, such a policy may
continue to apply to an employee while on FMLA leave. 29 CFR § 825.216(e).
Terminating an Employee on FMLA Leave
An employee who takes FMLA leave is entitled – in most instances – to be reinstated to
his or her former position, with equivalent pay and benefits, upon expiration of that leave.
However, an employee is not entitled to a position or other benefit of employment to which he or
she would not otherwise be entitled simply because he or she is on FMLA leave.
It is on that basis that the 7th Circuit Court of Appeals recently upheld the termination of a
company’s vice president even though the termination occurred while the vice president was on
FMLA leave. Daugherty v. Wabash Center, Inc., 577 F.3d 747 (7th Cir. 2009). In Daugherty,
the employer discovered evidence of misconduct during the employee’s FMLA leave, which
supported the employee’s termination. The Court of Appeals held that the employee’s
termination was not in retaliation for taking FMLA leave. Similarly, in Cracco v. Vitran Express,
559 F.3d 625 (7th Cir. 2009), the 7th Circuit held that an employer did not violate the FMLA by
firing an employee upon his return from leave. In dismissing the suit, the court stated that when
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an employer discovers information during an employee’s FMLA leave that would otherwise form
the basis of a valid termination, the law does not act as a bar to adverse employment action.
Likewise, if an employer undergoes a reduction in force while an employee is on FMLA
leave, the employee’s job is not protected simply because he is on FMLA leave. As stated, an
employee has no greater right to reinstatement than if the employee had been continuously
employed during the FMLA leave period. However, in order to deny restoration to employment,
the employer must be able to show that the employee would not otherwise have been employed at
the time reinstatement is requested.
While terminating an employee on FMLA leave is certainly not advised, there are
situations where it may be necessary. In those situations, we strongly recommend that employers
contact counsel before proceeding.
SPECIAL CONSIDERATIONS FOR SCHOOLS
The FMLA contains special rules with respect to schools. First, the FMLA broadly
applies to all schools. Again, regardless of whether an organization employs fewer than 50
people, the FMLA applies to: (1) any “local educational agency;” and (2) any private elementary
or secondary school.
Next, instructional employees’ rights are more limited with respect to intermittent leave or
leave on a reduced schedule. When instructional employees request intermittent FMLA leave that
is foreseeable and would require employees to be on leave for greater than 20% of the total
number of working days in the period during which the leave would be extended, the agency or
school may require such employees to either: (1) take leave for periods of a particular duration,
not to exceed the duration of the planned medical treatment; or (2) transfer temporarily to an
available alternative position for which the employee is qualified but that has equivalent pay and
benefits and better accommodates recurring periods of leave.
Moreover, school employees’ rights are also limited with respect to taking FMLA leave
near the conclusion of an academic term. If an employee’s leave begins more than five (5) weeks
before the end of an academic term, the agency or school may require the employee to continue
taking leave until the end of such term if the leave is at least three (3) weeks long; and the return
to work would occur during the three (3) week period before the end of an academic term.
If an employee’s leave begins less than five (5) weeks before the end of an academic term
because of:
•
•
•
•
the birth of a son or daughter and in order to care for such son or daughter;
the placement of a son or daughter with the employee for adoption or foster care;
the serious health condition of a spouse, son, daughter, or parent; or
the need to care for a covered servicemember;
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the agency or school may require such an employee to continue taking leave until the end of such
term if the leave is more than two (2) weeks long and the return to work would occur during the
two (2) week period before the end of a term.
And, if an employee’s leave begins less than three (3) weeks before the end of an
academic term because of:
•
•
•
•
the birth of a son or daughter and in order to care for such son or daughter;
the placement of a son or daughter with the employee for adoption or foster care;
the serious health condition of a spouse, son, daughter, or parent; or
the need to care for a covered servicemember;
the agency or school may require such an employee to continue taking leave until the end of such
term if the leave is more than five (5) days long.
With respect to the right restoration of an equivalent employment position after taking
FMLA leave, employees of local educational agencies and primary elementary and secondary
schools’ rights are limited to established school board policies and practices, private school
policies and practices, and collective bargaining agreements.
Finally, local educational agencies and private elementary and secondary schools may be
entitled to a reduction in liability for violating the FMLA, if a court determines that there was a
reasonable ground for thinking that an act or omission was not an FMLA violation.
ADDITIONAL CLARIFICATIONS RELATED TO THE FMLA
FMLA regulations mandate that if there is a dispute between an employer and an
employee as to whether leave qualifies as FMLA leave, it should be resolved through discussions
between the employee and the employer. Employers are also required to document the
discussions and the decision.
Under the new regulations, employers may now consider FMLA absences in determining
bonuses and other incentive rewards. With respect to perfect attendance awards, employers are
allowed to disqualify employees from bonuses or other payments based on achievement of a
specified job-related performance goal (such as attendance), if the employee has not met the goal
due to FMLA leave. However, such consideration must still be done in a nondiscriminatory
manner.
In order to assist employers in implementing the new FMLA regulations, the DOL
updated its optional forms to reflect the changes. Forms used to administer the new Military
Family Leave Amendments are available online at http://www.dol.gov. The optional FMLA
forms include:
(1) WH-380E: New Certification of Health Care Provider for Employee’s Serious Health
Condition (Regulations, Appendix B);
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(2) WH-380F: New Certification of Health Care Provider for Family Member’s Serious
Health Condition (Regulations, Appendix B);
(3) WH Publication 1420: Notice to Employee of Rights Under FMLA (Regulations,
Appendix C);
(4) WH-381: Notice of Eligibility and Rights and Responsibilities (Regulations,
Appendix D);
(5) WH-382: Designation Notice (Regulations, Appendix E);
(6) WH-384: Certification of Qualifying Exigency for Military Family Leave
(Regulations, Appendix G); and
(7) WH-385: Certification of Serious Injury or Illness of Covered Servicemember for
Military Family Leave (Regulations, Appendix H).
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THE FAIR CREDIT REPORTING ACT
The Fair Credit Reporting Act (“FCRA”), as amended by the Fair and Accurate Credit
Transactions Act (“FACT”), is designed primarily to protect the privacy of consumer report
information and to guarantee that the information supplied by consumer reporting agencies is
accurate. 15 U.S.C. §1681 et seq. The FCRA limits an employer’s ability to conduct background
checks on applicants and current employees when such investigations are performed by an outside
agency.
In 1997, Congress amended the FCRA and significantly increased the legal obligations of
employers who use consumer reports. Congress took these steps due to concerns that inaccurate
or incomplete consumer reports could cause applicants to be denied jobs or cause employees to be
denied promotions unjustly. The 1997 amendments ensure that individuals are aware that: (i)
consumer reports may be used for employment purposes; (ii) they agree to such use; and (iii)
individuals are notified promptly if information in a consumer report results in a negative
employment decision.
WHO IS PROTECTED BY THE FCRA?
The FCRA applies broadly to all employers, regardless of how few people they employ.
However, the Act only protects employees who earn less than $75,000.00 per year. Moreover,
the FCRA only protects employees with respect to external investigations. As such, it does not
prohibit employers from asking questions in employment applications or during the interview
process.
WHAT IS A CONSUMER REPORT?
A consumer report contains information about an individual’s personal and credit
characteristics, character, general reputation, and lifestyle. To be covered by the FCRA, a report
must be prepared by a consumer reporting agency (“CRA”). A CRA is a business that assembles
such reports for other businesses.
According to the FCRA, the following cannot be reported:
•
•
•
•
Bankruptcies after ten (10) years;
Civil suits, civil judgments, and records of arrest, seven (7) years after date of
entry;
Paid tax liens after seven (7) years; and
Any other negative information (except criminal convictions) after seven (7) years.
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KEY PROVISIONS OF THE FCRA
Written Notice and Authorization
Before an employer can obtain a consumer report for employment purposes, it must notify
the individual in writing – in a document consisting solely of this notice – that a report may be
used. The individual’s written authorization for the report to be completed must be obtained
before requesting a report from a CRA.
Adverse Action Procedures
If the consumer report is relied on for an “adverse action” such as denying an individual a
job, re-assigning an employee, terminating an employee, or denying a promotion, employers
must:
Step 1: Give the individual a pre-adverse action disclosure that includes a copy of the
Individual's consumer report and a copy of “A Summary of Your Rights under the Fair
Credit Reporting Act” – a document prescribed by the Federal Trade Commission, which
has been amended effective January 1, 2013. These forms can be located and printed at
www.gpo.gov.
Step 2: After the adverse action, notice (orally, in writing, or electronically) must be given
to the individual that the action has been taken. The notice must include: the name,
address, and phone number of the CRA that supplied the report; a statement that the CRA
that supplied the report did not make the decision to take the adverse action and cannot
give specific reasons for it; and a notice of the individual’s right to dispute the accuracy or
completeness of any information the agency furnished, and his/her right to an additional
free consumer report from the agency upon request within 60 days.
Certifications to Consumer Reporting Agencies
Before giving an employer an individual’s consumer report, the CRA will require the
employer to certify that it is in compliance with the FCRA and that it will not misuse any
information in the report in violation of federal or state equal employment opportunity laws or
regulations.
Employers seeking to institute pre-employment screenings that fall within the realm of the
FCRA should consult with counsel familiar with these issues. Some of the requirements of the
FCRA vary by industry.
INVESTIGATIONS EXEMPT FROM THE FCRA
The Fair and Accurate Credit Transactions Act (“FACTA”), a law which amends the Fair
Credit Reporting Act primarily addresses credit and identify theft issues. Nevertheless, Section
611 exempts investigations of suspected employee misconduct from the FCRA’s onerous
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reporting and disclosure provisions, thereby making it easier for employers to investigate
workplace misconduct. This provision became effective on March 31, 2004.
Employers are permitted to conduct misconduct investigations if they suspect job
applicants or employees of:
•
•
•
•
Misconduct relating to employment;
A violation of federal, state or local laws or regulations;
A violation of any preexisting employment policies; or
Non-compliance with the rules of a self-regulated industry.
Despite all of this, employers should be aware that some restrictions still apply to thirdparty investigations of workplace conduct related to the covered activities. For example, if the
investigation qualifies as exempt, employees must still be provided with a summary containing
the communication upon which any adverse action was based. Employers may provide this
summary after the adverse employment action has taken place. In order to protect the integrity of
the investigation, the sources of the information and/or identities of witnesses need not be
disclosed. This aspect of the law is intended to encourage witnesses to speak freely about the
employee being investigated without fear of retaliation from that employee.
Because the application of the new law is limited to investigations of suspected workplace
misconduct or investigations relating to compliance with applicable law or preexisting written
policies of the employer, employers should continue to vigilantly comply with the FCRA’s
limitations related to investigations covered by the FCRA.
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THE ELECTRONIC COMMUNICATIONS PRIVACY ACT
The Electronic Communications Privacy Act of 1986 (“the Act”), 18 U.S.C. §2510 et.
seq., is an amendment to and expansion of the Omnibus Crime Control and Safe Street Act of
1968 and is commonly referred to as the “Wiretap Statute.” The purpose of the Act is to afford
privacy protection to electronic communications. Konop v. Hawaiian Airlines, 302 F.3d 868 (9th
Cir. 2002). The Act provides that persons may not intentionally intercept, endeavor to intercept,
or procure any other person to intercept any wire, oral or electronic communication, or use,
endeavor to use or procure others to use any device to intercept wire, oral or electronic
communications. The Act also prohibits using or disclosing the contents of any wire, oral or
electronic communication obtained in violation of the Act. 18 U.S.C. §2511(1).
“Interception” occurs when the contents of a communication are captured or redirected in
any way, whether or not the communication is heard by a third party. George v. Carusone, 849
F.Supp. 159 (D.Conn.1994). In order to establish that an individual intercepted an electronic
communication in violation of the Act, a plaintiff must prove that the defendant intentionally
intercepted, endeavored to intercept, or caused another to intercept or endeavor to intercept, the
contents of an electronic communication using a device. In re Pharmatrak, Inc., 329 F.3d 9 (1st
Cir. 2003).
Courts have accepted a narrow definition of what qualifies as an interception. In Steve
Jackson Games, Inc. v. United States Secret Service, 36 F.3d 457 (5th Cir. 1994), the court held
that the government acquisition of e-mail messages stored on a website that were not yet retrieved
by the recipients, did not constitute an interception under the Act, reasoning that the information
was not obtained contemporaneously with the transmission of the messages. Additionally,
another court held that a company’s retrieval of an insurance agent’s e-mail from posttransmission storage did not fall under the Act, as the Act only applies during the course of
transmission. Fraser v. Nationwide Mutual Insurance Co, 352 F.3d 107 (3d Cir. 2003).
“Contents” under the Act include any information concerning the substance, purport or
meaning of the communication. Therefore, a party may be liable for disclosing the nature of the
communication intercepted without actually disclosing the details.
The Act adopts a broad, functional definition of an “electronic communication” by
defining it as including “any transfer of signs, signals, writing, images, sounds, data, or
intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic,
photoelectric, or photo-optical system that affects interstate or foreign commerce.” 18 U.S.C.
§2510(12). However, this definition was amended by the U.S. Patriot Act to not include any wire
or oral communication. 18 U.S.C. §2510(12). One court held that a transmission of a completed
online form constituted an electronic communication. In re Pharmatrak, Inc., 329 F.3d 9 (1st Cir.
2003).
Nonetheless, courts have held that an electronic communication only includes electronic
transmissions and not electronic storage. Fraser v. Nationwide Mutual Insurance Co., 352 F.3d
107 (3d Cir. 2003). Under this interpretation, an employer’s search of an employee’s e-mail
electronically stored in the e-mail provider’s system was not in violation of the Act because there
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was no interception of an electronic communication. Similarly, in Konop v. Hawaiian Airlines,
Inc., 302 F.3d 868 (9th Cir. 2003), the court held that an employer airline company’s
unauthorized access to an employee’s website about the employer and disclosure of the website’s
contents did not violate the Act because there was no interception of an electronic
communication, as the electronic information was merely stored on the website and there was no
transmission. Another court held that phone numbers stored in an individual’s cell phone
lawfully seized by the police were not electronic communications under the Act. U.S. v. Parada,
289 F.Supp.2d 1291 (D. Kan. 2003).
In general, the Act prohibits an employer from monitoring an employee’s conversations or
telephone calls, with some exceptions. Employers also have standing to bring claims against
employees for violations of the Act. Smoot v. United Transportation Union, 246 F.3d 633 (6th
Cir. 2001).
EXCEPTIONS TO EMPLOYERS’ INTERCEPTION OF COMMUNICATIONS
There are two basic exceptions to the general provisions of the Act as applied to
employers. First, it is not unlawful to intercept a communication when the intercepting person is
a party to the communication or when a party to the communication has given prior consent. 18
U.S.C §2511(2)(d). Second, employers may be allowed to intercept telephone communications if
doing so to further a legitimate business interest and in the ordinary course of business.
Again, in a recent Supreme Court case, City of Ontario v. Quon, 130 S.Ct. 2619 (2010), a
city discovered personal, sexually explicit text messages sent by one of its officers on a police
department issued pager. The city searched the pager after the officer exceeded his allotted time
usage, in an effort to determine whether it was necessary to provide officers with additional
minutes. The police officer sued the city, alleging that the search violated his Fourth Amendment
rights. The Supreme Court held that a city was reasonable and did not violate the Fourth
Amendment in searching a police officer’s text messages on a police department issued pager.
The Court reasoned that the search was motivated by a legitimate, work related purpose and was
not excessive in scope. Implicit in the Court’s decision was that the police officer did in fact have
a legitimate expectation of privacy. However, that legitimate expectation of privacy was
overcome by the police department’s legitimate, work related purpose.
Consent
Consent need not be express, but may be implied when a person’s behavior exhibits
acquiescence or a comparable waiver of otherwise protectable rights, and may be inferred by the
court where the party knowingly agreed to the surveillance. George v. Carusone, 849 F.Supp.
159 (D.Conn. 1994). However, consent under the Act is not to be loosely or cavalierly implied,
and mere knowledge of the capability of monitoring alone cannot be considered implied consent.
Deal v. Spears, 980 F.2d 1153 (8th Cir. 1992). The burden of establishing consent in a civil case
brought under the Act is on the party seeking the benefit of the consent exception. In re
Pharmatrak, Inc., 329 F.3d 9 (1st Cir. 2003).
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Ordinary Course of Business: “Extension Telephone Exemption”
An interception is unlawful under the Act if made through the use of an electronic,
mechanical or other “device.” However, there is an exemption to this prohibition created by the
Act’s definition of “electronic, mechanical or other device” that generally excludes “any
telephone equipment ‘furnished by a provider of wire or communication services’ or ‘furnished
by the subscriber or user for connection to the facilities of such service’ and being used by the
subscriber or user in the ‘ordinary course of its business.’”
The “ordinary course of business” language is the primary limiting term under this
exception and requires that such an interception be for a legitimate business purpose. This term
does not include “anything that interests the employer,” but the interest must be business-related.
A legitimate business interest was found in James v. Newspaper Agency Corp., 591 F.2d 579
(10th Cir. 1979), when an employer randomly monitored telephone conversations, primarily in
departments which dealt with the public. The monitoring was necessary in order to allow
supervisory personnel to provide employees with better training and instruction as to how to deal
better with the public, and also served as some protection for employees from abusive calls. The
court noted that although the monitoring was done secretly, the employees were notified in
writing that the equipment was installed and monitoring would occur.
However, the opposite result was reached in Watkins v. L.M. Berry & Co., 704 F.2d 577
(11th Cir. 1983), where the employer intercepted an employee’s discussion of an interview with
another company. In finding that such an interception violated the Act, the court noted that
although the employer may be interested in the employee’s plans to leave the company, the
employee was at liberty to interview and resign at will. Therefore, these subjects were personal
matters in which the employer held no legitimate business interest. Likewise, the actions of a
police department in Adams v. City of Battle Creek, 250 F.3d 980 (6th Cir. 2001), in tapping a
pager provided to a police officer by the department through the use of a duplicate or “clone”
pager, without a warrant or notice (although it erroneously thought that the officer was assisting
drug dealers), did not occur in the ordinary course of business, and therefore did not fall within
the business or law enforcement exceptions.
The secret interception of a “private” conversation without consent is not considered
within the “ordinary course of the employer’s business.” Even if the employee is aware of an
employer’s monitoring practices, the employee’s private conversations are protected by the Act
and an employer may not intercept them, except to the extent necessary to guard against
unauthorized use of the telephone or to determine whether a call is personal or not. Watkins v.
L.M. Berry & Co., 704 F.2d 577 (11th Cir. 1983).
In addition to the requirement that the interception be made in the ordinary course of
business, the person intercepting the telephone conversation must be “authorized” to use the
intercepting equipment. Briggs v. American Air Filter Co., Inc., 630 F.2d 414 (5th Cir. 1980). In
Briggs, the employer’s branch office manager used a business extension phone to secretly listen
to and record an employee’s telephone conversation with a former employee because he
suspected that confidential business information was being disclosed. The court held that the
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legitimate business exemption applied because the interception was for the purpose of protecting
the employer’s business and was done with reasonable cause for suspicion, and was not done for
the purpose of learning about the personal affairs of the parties. Moreover, the court found the
manager to be “authorized.”
Furthermore, the requirement that the equipment used to intercept the communication
must be furnished by the phone company or connected to the phone line may foreclose the
availability of this exception if the equipment is obtained from another source, such as an
electronics store, or is not connected to the line itself, but to another instrument connected to the
line, such as another phone. Some courts have held that if the device cannot operate
independently of the phone to intercept the communication, then the device is not exempt.
However, in Deal v. Spears, 980 F.2d 1153 (8th Cir. 1992), the court found that a recording
device purchased from Radio Shack and connected to an extension phone was a “device” under
the Act and was not exempt from coverage. In doing so, the court noted a split of authority
among the Circuits as to whether the use of this type of equipment is in violation of the Act or
exempt.
INTERCEPTING LIVE CONVERSATIONS
The protections of the Act also cover intercepting or recording oral communications (i.e.
live conversations) as well as electronic communications. In this context, the person must have a
justified expectation that the communication is not subject to interception under the
circumstances. 18 U.S.C. §2510 (2). That is, the person must expect that the conversation is free
from interception, and such expectation must be reasonable under the circumstances. An
expectation is not reasonable if the communication is readily or practicably capable of being
intercepted. Thus, if a person should know that his or her comments could be artificially detected
without too much trouble or that the means of artificial detection might actually be in place, the
expectation of non-interception is not reasonable.
Courts have noted that regardless of the proximity of others, where employees have some
ability to shield their comments from other employees and make an effort to do so, the
employees’ expectation of non-interception may be reasonable. Yet, in Wesley v. WISN DivisionHearst Corp., 806 F.Supp. 812 (E.D. Wis. 1992), when two employees of a radio station secretly
criticized station management and made disparaging comments about fellow talk show hosts in
hushed voices, their expectation that the communications were free from interception was not
reasonable. Although the conversations took place in a radio traffic reporter’s private cubicle, the
court relied upon the fact that there was a large microphone on the employee’s desk. According
to the court, even though off the air, the employees should have known that the microphone was
capable of detecting the comments.
In Walker v. Darby, 911 F.2d 1573 (11th Cir. 1990), a supervisor recorded a postal
employee’s conversations through a microphone in a brown box placed near the postal worker’s
open workstation, which transmitted sound to the supervisor’s office. The Walker court held that
while the employee might have expected conversations uttered in a normal tone of voice to be
overheard by those standing nearby or in nearby workstations, it was highly unlikely that he
would have expected his conversations to be electronically intercepted and monitored in an office
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in another part of the building. Consequently, there was a question of fact as to whether the
employee’s expectation was reasonable, and summary judgment for the supervisor was denied.
PENALTIES AND DAMAGES
Violators of the Act are subject to criminal prosecution and a fine or imprisonment for up
to five years, or both. 18 U.S.C. §2511 (4) & (5). In addition, any person whose communication
is intercepted, disclosed or used in violation of the Act may bring a civil action for appropriate
relief, including injunctive relief, actual damages, statutory damages, punitive damages,
attorneys’ fees and litigation costs. 18 U.S.C. §2520.
Employers should be aware that that if statutory damages will result in a larger recovery
than actual damages, the violator must pay the plaintiff $100 per day for each day of violation or
$10,000, whichever is greater.
STATUTE OF LIMITATIONS
A civil action under the Act must be commenced within two years after the date that the
plaintiff first has a reasonable opportunity to discover the violation under the Act. Sparshott v.
Feld Entertainment, Inc., 311 F.3d 425 (D.C. Dist. 2002). Therefore, the statute of limitations
will bar an action if two years have passed from the date the plaintiff had notice that would lead a
reasonable person to sue or conduct an investigation that would have discovered violations of the
Act. Davis v. Zirkelbach, 149 F.3d 614 (7th Cir. 1998). However, in cases involving an
employer’s fraudulent concealment of a claim, it is possible that a court may toll the statute of
limitations.
STATE “WIRETAP” STATUTES
Many states have enacted their own versions of the federal “wiretap statute.” Some of
these state statutes provide even broader protection to employees from interception or monitoring
of their communications, and may thereby impose greater obligations upon the employer.
Accordingly, state statutes must be taken into consideration when assessing what types of
interception or monitoring practices are allowed in any particular jurisdiction.
TIPS FOR EMPLOYERS
The best way to protect against these types of claims brought by employees to have a
comprehensive technology policy in place advising all employees that they should have no
expectation of privacy in the use of any employer-issued equipment, including computers,
telephones, printers and smart phones. Ideally, employers should circulate the policy and obtain
the signatures of each employees. These signed acknowledgement forms should be maintained in
each individual’s personnel file so that there can be no dispute that the employee knew that his or
her activities on work-related devices could be monitored at any time. A sample technology
policy is included in the addendum of this manual.
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THE VOLUNTEER PROTECTION ACT
In 1977, the federal government passed the Volunteer Protection Act (“the Act”), 42
U.S.C. §14501-14505, which currently provides the main employment-related protection for
volunteers. The purpose of the Act is to provide partial immunity for individuals who do
volunteer work for nonprofit organizations or governmental entities. Specifically, the Act seeks
to “provide certain protections to volunteers, nonprofit organizations and governmental entities in
lawsuits based on the activities of volunteers.” To achieve this purpose, the Act provides
protection in two ways: (1) it protects volunteers from being held liable for acts of ordinary
negligence done in the course of their volunteer work, and (2) it limits the award of punitive
damages for which a volunteer can be found liable.
The Act provides that volunteers for a nonprofit organization or governmental entity shall
not be held liable for the harm caused by the volunteer’s act or omission when acting on behalf of
the nonprofit entity if:
(1) The volunteer was acting within the scope of the his or her responsibilities in the
nonprofit organization or governmental entity at the time of the act or omission;
(2) If appropriate or required, the volunteer was properly licensed, certified or authorized
by the appropriate authorities for the activities or practice in the state in which the
harm occurred, where the activities were or practice was undertaken within the scope
of the volunteer’s responsibilities in the nonprofit organization or governmental entity;
(3) The harm was not caused by willful or criminal misconduct, gross negligence, reckless
misconduct, or a conscious, flagrant indifference to the rights of safety of the
individual harmed by the volunteer; and
(4) The harm was not caused by the volunteer operating a motor vehicle, vessel, aircraft,
or other vehicle for which the state requires the operator or the owner of the vehicle,
craft, or vessel to possess an operator’s license or to maintain insurance.
42 U.S.C. §14503(a)(1)-(4).
PROTECTION UNDER THE VOLUNTEER PROTECTION ACT
The Act protects volunteers from being held liable for acts of ordinary negligence done in
the course of their volunteer work. However, it does not protect the nonprofit organization or
governmental entity which “employs” the volunteer. Therefore, the Act does not change a
plaintiff’s ability to sue the nonprofit organization or governmental entity for a volunteer’s
negligence.
Further, the Act only provides immunity for volunteers who commit acts of ordinary
negligence. For the volunteer to be protected, he or she must be acting within the scope of his or
her responsibilities. Additionally, if a license is required to perform the task the volunteer is
performing, the volunteer must be properly licensed in order to be protected under the Act.
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DEFINITION OF “VOLUNTEER”
The Act defines a “volunteer” as an individual who performs services for a nonprofit
organization or governmental entity, who:
(1)
does not receive compensation other than reimbursement for expenses actually
incurred; or
(2)
does not receive anything of value in lieu of compensation in excess of $500 per
year.
“Volunteers” under the Act include, but are not limited to, volunteers serving as directors,
officers, trustees, or direct service volunteers.
DEFINITION OF “NONPROFIT ORGANIZATION”
The Act defines a “nonprofit organization” as:
(1)
any organization which holds tax-exempt status under §501(c)(3) of Title 26 of the
federal tax code and that does not practice hate crimes; or
(2)
any not-for-profit organization which is organized for public benefit and operates
primarily for charitable, civic, educational, religious, welfare, or health purposes
and that does not practice hate crimes.
Therefore, nonprofit organizations under the Act may include organizations which have
not obtained certification as a tax-exempt organization under the Internal Revenue Code.
However, if the organization has not obtained a tax-exempt certification, it must be established
that its activities are conducted for public benefit and that it is operated primarily for charitable,
civic, educational, religious, welfare or health purposes.
LIABILITY OF VOLUNTEERS
A volunteer is not protected under the Act if the conduct engaged in by the volunteer
consists of:
(1)
willful conduct or criminal misconduct;
(2)
gross negligence or reckless misconduct;
(3)
hate crimes;
(4)
sex offenses;
(5)
misconduct which violates a federal or state civil rights law (i.e. Title VII or the
ADA);
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(6)
any act performed under the influence of drugs or alcohol;
(7)
conscious flagrant indifference to the rights and safety of others; or
(8)
conduct while operating a motor vehicle or vessel of any kind (regardless of who
owns the vehicle and whether doing so for volunteer purposes).
VOLUNTEER CONDUCT EXCLUDED FROM IMMUNITY
There are five circumstances in which the Act does not apply. A common theme of each
of the five situations involves the personal misconduct of the volunteer. The five circumstances
not covered by the Act are:
(1)
crimes of violence or terrorism of which the volunteer has been convicted;
(2)
hate crimes;
(3)
sexual offenses of which the volunteer has been convicted;
(4)
violations of federal or state civil rights law; and
(5)
conduct performed while under the influence of drugs or alcohol.
DAMAGES
Even if a volunteer is found to be unprotected by the Act (i.e. the conduct was willful or
criminal), a plaintiff will be limited in the amount of damages he or she can recover from the
volunteer. A plaintiff can recover:
•
Compensatory damages – A plaintiff can recover economic damages, such as lost
wages and medical expenses, and also non-economic damages, such as pain and
suffering damages, against a volunteer.
•
Punitive damages – A plaintiff cannot collect punitive damages from a volunteer
unless the plaintiff can establish by clear and convincing evidence that the harm was
proximately caused by an action which constitutes willful or criminal misconduct, or
a conscious, flagrant indifference to the rights or safety of the individuals involved.
JOINT AND SEVERAL LIABILITY
In the past, when a plaintiff sued more than one defendant, all defendants were liable for
100% of the damages even if they were only 10% at fault. Therefore, both the volunteer and the
nonprofit organization were liable for 100% of the damages. This “joint and several liability”
gave the plaintiff the option of choosing from which defendant to recover damages.
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Under the Act, however, there is no “joint and several liability” for non-economic
damages such as pain and suffering. Therefore, if a jury awarded the plaintiff $100,000 in noneconomic damages and found the nonprofit organization only 10% at fault, the nonprofit
organization would only be liable for $10,000.
“Joint and several liability” still exists under the Act for economic damages such as lost
wages. Therefore, a plaintiff may recover 100% of the economic loss from the nonprofit
organization even if the nonprofit organization was only 10% at fault.
PREEMPTION OF STATE VOLUNTEER LAWS
The Volunteer Protection Act generally preempts the volunteer laws of individual states to
the extent that such laws are inconsistent with the Act. 42 U.S.C. §14502(a); Armendarez v.
Glendale Youth Center, Inc., 265 F.Supp.2d 1136 (D. Ariz. 2003). This is based on the premise
that a decrease in volunteers is a national concern and cannot merely be left to the states to
address. Moreover, only about half of the states have passed some type of legislation protecting
volunteers. The Act, however, does not preempt four specific types of state volunteer laws:
(1) state laws requiring a nonprofit organization to adhere to risk management procedures,
including mandatory training for volunteers;
(2) state laws that make a nonprofit organization liable for acts/omissions of its volunteers
to the same extent as an employer is liable for the acts/omissions of its employees;
(3) state laws that make the limitation of liability inapplicable if the civil action was
brought by an officer of state or local government pursuant to state law; and
(4) state laws that make the limitation of liability applicable only if the nonprofit
organization provides a financially secure source of recovery for individuals who
suffer harm as a result of actions taken by the volunteer.
The Act, however, does allow states the opportunity to “opt out” of provisions within the
Act. As a result, a state can choose to bypass the Act and rely on its own legislation.
Furthermore, the Act does not preempt conflicting state volunteer laws that were in effect prior to
the Act.
One court has held that the Act not only preempts inconsistent state law, but it also applies
to and precludes federal claims, such as claims brought against volunteers under the Fair Labor
Standards Act. Armendarez v. Glendale Youth Center, Inc., 265 F.Supp.2d 1136 (D. Ariz. 2003).
It should be noted that the constitutionality of the Act has been called into question,
although not through the judicial system. Critics of the Act argue that the Act is unconstitutional
because Congress has legislated in an area of law that is traditionally left to the states.
Federal courts have rarely decided cases under the Act. However, the following case
examples arise under various state volunteer laws. It should be noted that the laws of each state
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are often different, and therefore nonprofit organizations should look to the statutes and case law
in their own state for guidance.
Courts have refused to impose liability upon the volunteer agency in the following situations:
•
A former Boy Scout suing the Boy Scout organization, alleging that while he was at
camp, an adult volunteer sexually molested him. Doe v. Goff, 716 N.E.2d 323 (Ill.
App. Ct. 1999). The court held that the sexual assault was not foreseeable, so the
organization did not owe the plaintiff a duty to prevent molestation. Second, the court
held that the organization did not voluntarily undertake to prevent such acts, which
would have given rise to a special duty to protect the boys.
•
Student seeking damages from the New York City Board of Education for a volunteer
art teacher sexually molesting him. Koran I. v. The New York Board of Education,
256 A.D.2d 189 (N.Y. Sup. Ct. 1998). The court held that the Board was not liable for
the molestation because the acts of molestation were outside the scope of the
volunteer’s duties. In particular, the court noted that the molestation occurred after
school hours and off school property. The court also held that the school principal’s
failure to conduct a background check on the volunteer did not lead to liability of the
Board because of the “absence of any evidence that the volunteer had a criminal
history” and because his criminal record would not have revealed the volunteer’s
propensity to molest students. But see T.W. v. City of New York, 286 A.D.2d 243
(N.Y. A.D. 2001) (holding that if the employer had conducted a background
investigation, it would have discovered that its employee had an extensive criminal
history, including crimes involving violence, such as assault and attempted robbery).
•
A motorcyclist’s suit against a church for injuries sustained when he was struck by a
volunteer church worker who was delivering church financial records to its treasurer.
Boissonnault v. Bristol Federation Church, 642 A.2d 328 (N.H. Sup. Ct. 1994). The
court held that the church was not liable to the plaintiff because the volunteer was not
acting as a “servant.” Although the church may have had control over tasks assigned
to the volunteer, it had no right to control the specific physical performance or details
of the accounting services she performed.
•
The negligence of a volunteer Boy Scout leader during an outing, resulting in two boys
being fatally electrocuted. Wilson v. Boy Scouts of America, 784 F.Supp. 1422 (E.D.
Mo. 1991). The court held that the organization was not liable for the negligence of its
volunteer in light of the absence of control over its volunteers. The court also held that
there was no duty to control, supervise, or train the Boy Scout volunteers.
•
Where a settlement was reached with the volunteer causing the injury and the
settlement satisfied the plaintiff’s entire amount of damages incurred. Nelson v.
Church of Jesus Christ of Latter-Day Saints, 935 P.2d 512 (Utah Sup. Ct. 1997). In
Nelson, a teen was seriously injured at a church youth activity when his volunteer
adult supervisor fell on him. The plaintiff filed suit for personal injuries against the
volunteer and the church. The volunteer entered into a settlement agreement with the
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plaintiff. In the settlement, the plaintiff signed a release of all claims against the
volunteer. The church argued that it too was released from all claims when the plaintiff
signed the agreement. The court held that normally, if the servant is released after
paying the full amount of the plaintiff’s damages, all liability is satisfied and there is
no cause of action against the master. However, Utah enacted the Joint Obligations
Act, which provides that a release of one party does not discharge a co-party. The
court held that even though the church was not released, the plaintiff cannot recover
more than the amount of his actual damages. Therefore, since the volunteer had
satisfied the full amount of the plaintiff’s damages, the plaintiff could not recover from
the church.
Generally, courts will find the volunteer agency liable if the volunteer was performing
duties that were within the scope of his or her duties when the incident occurred. In Matlock v.
Hankel, 707 So.2d 1016 (4th Cir. 1998), a pedestrian was struck by a volunteer firefighter’s
vehicle as the volunteer arrived at a fire scene. The pedestrian brought a personal injury claim
against the volunteer fire department and the “regular” fire department. In finding that both the
volunteer and regular fire departments were liable for the acts of the volunteer, the court held that
both fire departments had control over volunteer firefighters to, from, and at the scenes of fires.
Because the volunteer hit the pedestrian while on the way to a fire, the volunteer was clearly
acting within the scope of his duties. Moreover, the court also held that the volunteer fire
department was not immune from liability simply because the volunteer was personally immune
under the New York Good Samaritan Statute.
RECOMMENDATIONS FOR NOT-FOR-PROFIT ORGANIZATIONS
•
Have a clear written statement of the organization’s mission, purpose, and job descriptions
for each duty and volunteer position. This defines the scope of the official functions and
duties of the volunteer and makes clear the expectations of both the volunteer and the
organization.
•
Make policy and procedure manuals available to all volunteers. The manuals should be
easily understood and kept up-to-date at all times.
•
Investigate the volunteer’s temperament, education, skills, and in some circumstances,
criminal records. Nonprofit organizations can be held liable for the improper selection,
assignment and training of volunteers, as well as for improper supervision of the
volunteers.
•
Act quickly upon receipt of negative information and take the necessary steps to either
remedy the problem or sever the relationship with the volunteer.
•
Exercise care in the management of volunteers, particularly when the volunteer is in
contact with the public.
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THE SARBANES-OXLEY ACT OF 2002
The Sarbanes-Oxley Act (“the Act”) of 2002 was passed in order to address problems
recently associated with corporate abuse and misconduct. The Act was passed in July 2002 for
the purpose of protecting investors by improving the accuracy and reliability of corporate
disclosures made pursuant to U.S. securities laws. 15 U.S.C. 7201. The Act has far-reaching
effects on the corporate landscape and, as a result, also impacts employment-law-related issues.
PROTECTION OF WHISTLEBLOWERS
Section 806 of the Sarbanes-Oxley Act provides protections for any employee of a
publicly held corporation who discloses information concerning his or her company’s fraudulent
activity. The protections are afforded to employees who reasonably believe that the company is
violating or has violated a federal securities law, a Securities and Exchange Commission rule, or
any other federal law pertaining to corporate fraud against shareholders. The Act protects
employees in disclosing such violations to federal investigators, Congress, or individuals within
the corporation with the authority to investigate allegations of misconduct.
Any employee terminated or adversely treated in retaliation for making such disclosures
may file a complaint against his or her employer with the Department of Labor. If the
complainant can show that the disclosure of the information was a contributing factor to the
adverse employment action, the Department of Labor will conduct a hearing. At the hearing, the
employer has the burden of proving by clear and convincing evidence that the adverse
employment action did not result from the protected conduct.
REQUIREMENTS OF THE ACT
Employers are prohibited from terminating or taking any adverse employment action
against an employee on the basis of the employee reporting corporate misconduct.
Further, an employer is required to implement reporting procedures for employees to
follow in reporting corporate misconduct. Specifically, the Act requires the employer to furnish a
system allowing employees to submit anonymous and confidential disclosures concerning the
company’s accounting and/or auditing practices.
The Act also prohibits individuals from altering, destroying, mutilating, or concealing any
record, document, or other object, or attempting to do so, “with the intent to impair the object’s
integrity or availability for use in an official proceeding.” Any individual found to violate this rule
can face fines and/or imprisonment of up to 20 years. This prohibitory language is not restricted
to accounting or auditing records and, therefore, would also apply to records concerning Equal
Employment Opportunity Commission violations, employee lawsuits or any other employment
matters. Therefore, under the Act, employers have an affirmative obligation to preserve and
safeguard records concerning all employment matters.
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Additionally, public corporations are now prohibited from directly or indirectly extending,
maintaining, arranging, or renewing credit in the form of a personal loan to any director or
executive officer of the corporation. Thus, public corporations may not extend or offer loans as
benefits to executive officers and directors for any purpose whatsoever.
Finally, the Act imposes a heightened duty on public corporations to provide notice to
pension plan participants of “blackout” periods on sales of company stock. In situations where
one half of the company’s ERISA pension plan participants are prohibited from selling company
stock for more than three consecutive days, the company must provide notice of the blackout
period at least 30 days prior to the commencement of the blackout period. The company’s
directors and officers are also prohibited from selling or trading company stock during the
blackout periods.
ARBITRATION AGREEMENTS
Employers commonly subject employees to arbitration agreements, which require the
employees to settle any disputes with the employer in arbitration. One court has considered
whether the protections afforded to whistleblowers under the Sarbanes-Oxley Act can be required
to undergo arbitration. In Boss v. Salomon Smith Barney Inc., 263 F.Supp.2d 684 (S.D.N.Y.
2003), an employee brought a claim against his employer, an investment bank, for terminating his
research analyst position in retaliation for his refusal to share draft research reports with
investment bankers in violation of the Sarbanes-Oxley Act. The employer’s arbitration policy
provided that arbitration was the required and exclusive forum for resolution of all disputes and
claims against the employer. The employee claimed that pursuant to the language of the SarbanesOxley Act, all claims brought under the Act are to be brought in a federal court, and therefore the
employer could not mandate arbitration. The court disagreed and held that there was nothing in
the text of the Sarbanes-Oxley Act indicating an intent to preempt arbitration agreements.
Additionally, the court did not believe that the arbitration agreement was inconsistent with the
purpose of the Sarbanes-Oxley Act. Based on this holding, it is therefore permissible for an
employer to require its employees to submit claims under the Sarbanes-Oxley Act to arbitration.
FILING A CLAIM
The Department of Occupational Safety and Health Administration (“OSHA”) is
responsible for conducting investigations and finding violations of the Sarbanes-Oxley Act’s
whistleblower provisions, and has recently implemented regulations regarding allegations of such
violations. OSHA’s rules govern both the investigation and adjudication stages of such claims.
Additionally, OSHA has set forth procedures for administrative resolution of these claims.
Pursuant to OSHA rules and regulations, in order to file a claim under the Sarbanes-Oxley Act
whistleblower provisions, an individual must first file a complaint with OSHA. After receiving
the complaint, OSHA must provide the employer with written notice of the charge. After
receiving notice of the charge, the employer has 20 days to respond in writing to the allegations.
During this time period, OSHA will conduct an investigation to assess whether the employee’s
allegations have merit. At the conclusion of the investigation, OSHA will issue a preliminary
ruling. The employer may appeal the preliminary ruling to an administrative law judge within 30
days. If a preliminary ruling is not appealed within 30 days, the decision becomes final and is not
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subject to judicial review. In the event that the administrative law judge rules against the
employer, the judge will make a recommendation to the Assistant Secretary of Labor to make the
ruling final. If the Assistant Secretary of Labor makes the decision final, the employer has 60
days to appeal to a United States Court of Appeals in the circuit in which the violation allegedly
transpired.
A federal district court will have jurisdiction over a claim brought under the SarbanesOxley whistleblower provisions so long as:
(1) The employee first filed a complaint with the Secretary of Labor;
(2) The Secretary of Labor did not issue a final decision within 180 days after the filing of
the complaint;
(3) The employee filed the lawsuit in a federal district court after the 180-day period
expired; and
(4) The Secretary of Labor’s failure to issue a final decision was not due to the plaintiff’s
bad faith.
DAMAGES
An employee prevailing in an action under the Sarbanes-Oxley Act can recover
compensatory damages in the form of any of the following:
•
Reinstatement with the same seniority status the employee would have had if not for
the discriminatory act;
•
Back pay with interest;
•
Compensation for special damages, including litigation costs, expert witness fees, and
reasonable attorney fees; and
•
Pursuant to state law, punitive damages and damages for emotional distress.
The Act also imposes criminal penalties on individuals who retaliate against a protected
employee. The Act amended 18 U.S.C. §1513 to provide that “whoever knowingly, with the
intent to retaliate, takes any action harmful to any person, including interference with the lawful
employment or livelihood of any person for providing to a law enforcement officer any truthful
information relating to the commission or possible commission of any Federal offense, shall be
fined under this title or imprisoned not more than ten years, or both.”
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COMPLIANCE GUIDANCE
In order to ensure compliance with the Sarbanes-Oxley Act, employers who are covered
under the Act should consider the following suggestions:
•
Refrain from terminating, suspending, demoting, disciplining, or imposing any adverse
employment action against an employee on the basis of the employee reporting
corporate misconduct to an appropriate investigating agency.
•
Implement an internal reporting mechanism to allow employees to report alleged
corporate misconduct on an anonymous, confidential basis.
•
Conduct investigations of all internally reported allegations of corporate misconduct.
•
Avoid altering, destroying, mutilating, or concealing any records, documents, or emails with the intention of preventing their discovery in an official proceeding.
•
Maintain, preserve, and safeguard an accurate filing system for all records, documents,
or other objects pertaining to the company’s operations and activities, including
employment actions.
•
Avoid offering or providing employment benefits to directors or officers of the
company that extend, maintain, arrange, or renew credit in the form of a personal loan
to a director or officer of the company.
•
Provide notice of “blackout” periods (periods of time during which company stock
cannot be traded or sold for three days or longer) to all pension plan participants at
least 30 days prior to the blackout period.
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ARBITRATION AGREEMENTS
GENERAL PRINCIPLES
In recent years, arbitration has developed into a widely used and favored means of
resolving employment disputes. Arbitration is much less expensive and more expedient than
litigating in courts or administrative agencies. Employers maintain a certain degree of control
over the dispute resolution process when utilizing arbitration as opposed to other methods. For
example, employers can choose the arbitrator and structure the rules that govern the process.
Moreover, by using arbitration, employers are afforded a higher degree of confidentiality, and
they avoid the often-backlogged judicial system.
THE FEDERAL ARBITRATION ACT
In order to support a national policy favoring resolution of disputes through arbitration,
Congress enacted the Federal Arbitration Act (“FAA” or “the Act”) in 1925. The Act was passed
in response to courts’ traditional hostility toward enforcement of arbitration agreements. In
response to the Act, courts have now held that arbitration of a federally created statutory right is
appropriate because “by agreeing to arbitrate a statutory claim, a party does not forgo the
substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather
than a judicial forum.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).
Under the FAA, written agreements to arbitrate are generally valid and enforceable except
when contained in “contracts of employment of seamen, railroad employees, or any other class of
workers engaged in … interstate commerce.” 9 U.S.C. §1 et. seq. While employee advocates
have argued that this exclusion invalidates arbitration agreements of all employees engaged in
interstate commerce, proponents of employers have argued that the exception only applies to
transportation employees. The Supreme Court in Circuit City Stores, Inc. v. Adams, 532 U.S. 105
(2001), ruled that the FAA compels courts to enforce arbitration clauses in employment
agreements, and the exclusionary language in the FAA applies solely to transportation employees.
One court held that the exclusionary language of the FAA excluded all employment contracts
with seamen and railroad workers, even if such workers are not engaged in interstate commerce.
Brown v. Nabors Offshore Corporation, 339 F.3d 391 (5th Cir. 2003).
CONTRACTS UNDER THE FEDERAL ARBITRATION ACT
The FAA is applicable to all contracts that evidence a transaction involving commerce.
Courts have taken both narrow and broad approaches in defining what contracts “evidence a
transaction involving commerce.” The Supreme Court has recently clarified that state courts
should broadly define contracts evidencing a transaction involving commerce.
In Citizens Bank v. Alafbco, Inc., 539 U.S. 52 (2003), an arbitration agreement created as a
component of multiple debt restructuring contracts entered into by a lending institution and a
construction company was at issue. The Alabama Supreme Court ruled that the contract was not
covered by the FAA due to the fact that it was not established that the restructured debt that was
the subject of the contract involved interstate commerce, because the funds constituting the debt
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did not originate from outside of Alabama and the debt was not entangled with the company’s
other out-of-state projects. The United States Supreme Court reversed the Alabama Supreme
Court’s decision, and held that the court’s view of what “involves interstate commerce” was too
narrow. In doing so, the Court took the view that under the FAA, a portion of the agreement at
issue does not have to directly involve interstate commerce. Rather, the FAA is applicable where
the economic activity at issue is based upon a “general practice subject to federal control.”
Therefore, the proper inquiry is the company’s complete business activities and not the subject
matter of the contract at issue. Based on this line of analysis, the Court held that the contract fell
under the scope of the FAA because one of the parties to the agreement engaged in business
throughout the southeastern United States, the restructured debt was secured by inventory
consisting of out-of-state parts and materials, and due to the broad impact of commercial lending
on the national economy.
WHAT TYPES OF ARBITRATION AGREEMENTS ARE UNENFORCEABLE?
Although the FAA creates a substantive law as to what claims are subject to arbitration
within the Act, courts must consider state law principles in determining whether the parties have,
in fact, entered into a valid and enforceable arbitration agreement. Stawski Distributing Co., Inc.
v. Browary Zywiex S.A., 349 F.3d 1023 (2003). Therefore, courts have applied state contract laws
in determining the validity and enforceability of arbitration agreements.
A court will not enforce an arbitration agreement if it finds that the agreement is
procedurally or substantively unconscionable. Ferguson v. Countrywide Credit Industries, Inc.,
298 F.3d 778 (9th Cir. 2002). In Ferguson, the court concluded that state law should apply in
determining whether an arbitration agreement is unconscionable. Under California law, an
agreement is unconscionable if it is both procedurally and substantively unconscionable. Circuit
City Stores, Inc. v. Mantor, 335 F.3d 1101 (9th Cir. 2003).
Procedural unconscionability focuses on how the parties negotiated the contract and the
circumstances of the parties at the time. Generally, an agreement is procedurally unconscionable
when there is oppression or unfair surprise. An agreement is not procedurally unconscionable so
long as the employees have a meaningful opportunity to negotiate or reject the terms of the
contract. For instance, under California law, when one party to a contract has far superior
bargaining power to the other party, or where one party harasses or compels the other into
entering the contract, procedural unconscionability is present.
In Ferguson v. Countrywide Credit Industries, Inc., 298 F.3d 778 (9th Cir. 2002), the
court held that the agreement was procedurally unconscionable due to the employer’s unequal
bargaining position and the employee’s lack of opportunity to negotiate. Further, in Mantor, the
court held that although the employment arbitration agreement at issue contained an opt-out
clause for employees who chose not to be subjected to the arbitration agreement, the contract was
unconscionable because the employer pressured and threatened employees into signing the
agreement.
On the other hand, substantive unconscionability is concerned with the actual terms of the
agreement and asks whether the terms are “so one-sided as to shock the conscience.” The
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relevant timeframe for substantive unconscionability is the time at which the contract was entered
into. The court in Ferguson held that the arbitration agreement at issue was also substantively
unconscionable because it was entirely one-sided, as it required arbitration for any potential claim
brought by an employee against the employer but excluded any claims the employer may have
against the employee. Therefore, because the arbitration agreement was both procedurally and
substantively unconscionable, the court refused to force the employee’s claim to arbitration.
Likewise, in Mantor, the court held that the arbitration agreement was substantively
unconscionable because the agreement dictated the statute of limitations, class actions, cost
splitting, and the employer’s right to unilaterally terminate the agreement, and required
employees to pay the employer’s filing fee to commence arbitration.
The Supreme Court has held that an employer’s failure to disclose the costs and fees
imposed upon an employee in the event that a claim is arbitrated was not alone a sufficient
justification to hold that the arbitration agreement is unenforceable. Green Tree Financial Corp.
v. Randolph, 531 U.S. 79 (2000). The Court noted that a party seeking to invalidate an arbitration
agreement on the basis that the arbitration process would be excessively expensive bears the
burden of proving the probability of the parties incurring such expenses or that Congress intended
to prohibit arbitration of the particular type of claim at issue. The Court did not believe the
employee met this burden and affirmed the enforcement of the arbitration agreement.
Additionally, a court will not enforce an arbitration agreement it finds the agreement is
illusory. Dumais v. American Golf Corp., 299 F.3d 1216 (10th Cir. 2002). In Dumais, the
arbitration agreement at issue was ambiguous because it contained two conflicting provisions
concerning the employer’s right to unilaterally alter the agreement. The court determined that
because the agreement was ambiguous, it should be construed against the drafter/employer. The
court therefore held that the arbitration agreement was unenforceable because “an arbitration
agreement allowing one party the unfettered right to alter the arbitration agreement’s existence or
its scope is illusory.”
Courts will not enforce arbitration agreements that are embodied in collective bargaining
agreements that waive employees’ statutory right to a judicial forum unless the language of the
agreement is clear and unmistakable. Wright v. Universal Maritime Serv. Corp., 525 U.S. 70
(1998). One court held that the requisite degree of clarity may be achieved by two different
methods. First, the agreement can contain an unmistakable arbitration clause such as an
agreement that contains language stating, “all employees agree to submit to arbitration of all
federal causes of action arising out of their employment.” Second, if the arbitration clause is not
so clear and contains no broad or general arbitration clause, the agreement must be supported by
further provisions that make it clear that the certain claims at issue are subject to the arbitration
agreement. Singletary v. Enersys, Inc., 57 Fed. Appx. 161 (4th Cir. 2003). In Singletary, the court
held that the following language constituted clear and unmistakable language indicating a waiver
of a statutory right to a judicial forum of a claim: “any and all claims regarding equal employment
opportunity or provided for under this Article of the Agreement or under any federal or state
employment law shall be exclusively addressed by an individual employee or the Union under the
grievance and arbitrations provisions of this Agreement.”
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Similarly, another court held that language in an arbitration provision of an employee
handbook was sufficient to waive an employee’s right to sue under federal and state law by
stating that all claims arising under federal law fall within its purview and also include “any other
state, or local statute, regulation, or common-law doctrine, regarding employment discrimination,
conditions of employment, or termination of employment.” Leodori v. Cigna Corp., 814 A.2d
1098 (N.J. 2003). However, the Leodori court refused to enforce the arbitration agreement
because there was no evidence to reflect the employee’s affirmative assent to the arbitration
provision, such as an acknowledgement form.
ARBITRATOR’S DECISIONS
Upon the arbitrator’s rendering of a decision, a party may appeal the finding on the basis
of the arbitrator’s error. However, in order to favor arbitration of claims, courts will generally
give deference to an arbitrator’s decision regarding factual findings and interpretations of
contracts. A court cannot overturn an arbitrator’s decision because its interpretation of a contract
is different from that of the arbitrator. International Chemical Workers Union v. Columbian
Chemical Co., 331 F.3d 491 (5th Cir. 2003).
For example, the Supreme Court held that it would be premature for the Court to address
the issue of whether an arbitration agreement between physicians and a health care organization
could prohibit awards of punitive damages, because it is the role of the arbitrator to first interpret
the parties’ agreement. Pacificare Health Systems, Inc. v. Book, 538 U.S. 401 (2003). In
Pacificare, physicians sued the managed health care organization for violation of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”) for failing to reimburse them for their
performed health care services under the organization’s plan. The health care organization sought
to compel arbitration pursuant to the parties’ agreement; however, the court refused to compel
arbitration because the agreement prohibited punitive damages, and therefore an arbitrator would
be precluded from awarding treble damages as provided by RICO. The Supreme Court
acknowledged that RICO’s provision allowing treble damages is remedial and not punitive in
nature. Therefore, it is the role of an arbitrator, not a court, to determine if the parties, in agreeing
to prohibit punitive damages, intended to disallow treble damages under RICO and render the
agreement unenforceable.
Other courts, however, have held that arbitration agreements may not restrict the types of
permissible damages awarded to an employee under Title VII. Hadnot v. Bay, LTD., 344 F.3d
474 (5th Cir. 2003). In EEOC v. Waffle House, Inc, 534 U.S. 279 (2002), the court held that
mandatory arbitration agreements do not bar the EEOC from pursuing victim-specific judicial
relief such as back pay, reinstatement, and damages in an enforcement action.
It is also the role of the arbitrator to determine procedural questions that arise from the
dispute and affect the final disposition of the matter. Howsam v. Dean Witter Reynolds, Inc., 537
U.S. 79 (2003). In Howsam, the Supreme Court held that an interpretation of the National
Association of Securities Dealers rule imposing a time limit of six years for arbitration was a
matter for the arbitrator, not the court, to decide. The Court’s decision was based on its holding
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that decisions concerning allegations of waiver, delay, or similar defenses are presumptively for
an arbitrator to decide.
APPEALING AN ARBITRATOR’S DECISION
As stated above, a party unsatisfied with the decision of an arbitrator may appeal the
decision. However, pursuant to the FAA, a review of an arbitration decision is extremely narrow.
A court will not reverse an arbitration decision unless:
•
The award was procured by corruption, fraud, or undue means;
•
There is evidence of partiality or corruption among the arbitrators;
•
The arbitrators were guilty of misconduct which prejudiced the rights of the parties;
•
The arbitrators exceeded their powers; or
•
The arbitrator acted with manifest disregard of the law.
9 U.S.C. §10(a)
EFFECTS OF ARBITRATION AGREEMENTS ON CLASS ACTIONS
The Supreme Court has considered the effect of mandatory arbitration agreements
on class action lawsuits. In Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003), the Court
held that the issue of whether a mandatory arbitration agreement is applicable to class actions,
when the arbitration agreement does not address the issue, is the decision of the arbitrator rather
than a court. The Court’s decision was based on the arbitrators’ recognized authority of
interpreting arbitration agreements and arbitration procedures. The Court believed that the dispute
at issue was over what type of arbitration the agreement called for and, as such, the decision was
within the realm of arbitrators’ authority.
Nonetheless, the Court’s decision did not address the issue of whether arbitration
agreements may preclude the arbitration of class actions. Rather, the decision bestows arbitrators,
rather than courts, with great authority in determining whether class actions may be arbitrated
pursuant to employers’ arbitration agreements. As a result, employers that implement and utilize
arbitration agreements should decide whether they want the agreements to apply to class action
litigation and specifically provide for such a preference in the agreement in order to avoid an
arbitrator deciding this issue.
STATE STATUTES
In response to the increasing use of arbitration, many states have passed their own
legislation regarding arbitration agreements. Employers should therefore check applicable state
laws to determine whether their state imposes any further duties or obligations.
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For example, Illinois passed the Employee Arbitration Act, 820 ILCS 35/2 et. seq. The
Illinois Arbitration Act is applicable “when a controversy or difference not involving questions
which may be the subject of a civil action exists between an employer, whether an individual, copartnership or corporation, employing not less than twenty-five persons, and his employee in the
State of Illinois, the Department of Labor shall upon application visit the locality of the dispute
and make a careful inquiry into the case thereof, hear all persons interested who may come before
it, advise the respective parties what ought to be done or adjust the dispute if submitted by the
parties and issue a written decision.” 735 ILCS 35/2.
A recent Third Circuit ruling illustrates the growing importance of individual state
arbitration laws. In Palcko v. Airborne Express, Inc., 372 F.3d 588 (3d Cir. 2004), an undivided
panel of the Third Circuit Appellate Court ruled that the FAA only preempts state arbitration law
where there is an actual conflict. The court reasoned that there is no language in the FAA that
explicitly preempts enforcement of state arbitration statutes and that provisions of those statutes
should be enforced even though no similar provision could be found within the FAA.
Specifically, Section 1 of the FAA exempts arbitration agreements relating to the employment of
“seamen, railroad employees, or any other class of workers engaged in foreign or interstate
commerce” from the scope of the Act’s coverage.” The Palcko court found that the plaintiff’s
employment position was exempted under this provision of the FAA. However, it was not
exempted under an applicable Washington state arbitration statute. Consequently, the parties’
prior agreement to arbitrate was enforceable under Washington state law, even though it would
not have been under the FAA.
The Illinois Employee Arbitration Act also provides the procedure and notice
requirements for employment arbitrations. Under the Illinois Act, the parties are required to
submit an application that must be signed by the employer or a majority of its employees in the
department in which the controversy exists, or by both parties. The application must contain a
short and concise statement of the grievances complained of and a promise to continue on with
business without a strike until a decision is reached, if the decision will be made within three
weeks of the date the application is filed. Upon filing the complaint, the Department of Labor
shall give public notice of the time and date of the hearing; however, public notice is not required
where both parties join in the application and present a written request that no public notice be
given. In such a situation, the Department of Labor may give private notice to the parties as it
deems proper.
Further, the Department of Labor may issue subpoenas for witnesses or experts and
require documents to be produced. After the hearing, the Department of Labor shall render a
decision, which may be published in an annual report to the governor. The decision is binding
upon the parties who join in the application for six months or until either party gives the other
notice of his or her intention not to be bound by the decision at the expiration of 60 days after the
decision is rendered. Notice by the employer of its intention may be provided to employees by
postings in three conspicuous locations in the place of employment.
Upon a party’s failure to abide by the decision of the Department of Labor, a party may
file a petition seeking compliance with the circuit court of the county in which the offending party
resides or in the county of the employment. The circuit court may then rule against a party or
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require cause to be shown within 10 days. The court may then rule and secure compliance and/or
punish the offending party with contempt.
The Illinois Employee Arbitration Act is an example of state legislation which requires
employers’ compliance with specific rules and procedures in arbitrating claims with employees.
Employers who are not subject to Illinois statutes should check their state statutes regarding
arbitration with employees to ensure compliance with such state-specific regulations.
SUGGESTIONS FOR DRAFTING AND EXECUTING ARBITRATION AGREEMENTS
Consider:
•
Providing notice to the employee of the arbitration clause and having the employee
sign a form acknowledging the arbitration clause.
•
Ensuring that the employee realizes what is being agreed to and what the arbitration
agreement entails.
•
Allowing employees to negotiate terms of the agreement.
•
Allowing employees to reject terms of the agreement.
•
Requiring arbitration for all disputes and claims.
•
Making the terms of the arbitration agreement fair and reasonable for both the
employer and the employee.
•
Drafting the arbitration agreement in a clear and concise manner to avoid any
confusion or ambiguity.
•
Stating specifically in the arbitration agreement whether the agreement is applicable to
class action lawsuits.
•
Detailing in a specific and precise manner the procedures the employer will follow in
altering the agreement (i.e. notice to employees, bilateral agreement, vote, etc.).
•
Ensuring that the steps and procedures used in implementing the policy and in
arbitrating the claims are fair and reasonable for both parties.
•
Following the procedures set forth in the arbitration agreement in every dispute with
every employee.
•
Consulting counsel in drafting, implementing, or altering an arbitration agreement.
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Avoid:
•
Surprising employees with an arbitration agreement subsequent to commencement of
employment.
•
Including fixed terms and provisions which are non-negotiable.
•
Pressuring, forcing, or oppressing an employee into consenting to the arbitration
agreement.
•
Permitting employees’ lack of knowledge as to the existence or scope of the arbitration
agreement.
•
Requiring arbitration only for employees’ claims and disputes against the employer.
•
Drafting the terms and conditions of the agreement in a one-sided manner or in a way
that solely benefits the employer.
•
Drafting the arbitration agreement in a confusing or ambiguous manner.
•
Enforcing the terms and procedures of the arbitration agreement in a selective or
inconsistent manner.
•
Failing to address whether the agreement is applicable to class actions.
•
Restricting the types of damages available to employees in arbitrated claims.
•
Permitting the employer the right to unilaterally cancel or alter the arbitration
agreement.
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VARIOUS ILLINOIS STATUTES
There are a multitude of state statutes and laws that have an impact upon employment
issues. It is important to be aware of the existence of such state statutes. Therefore, this section
acts as a guide to cover Illinois statutes that have an impact on employment law issues and
practices. Although there are some common themes among all the states, each state’s legislation
may differ. As an employer, it is important to stay up-to-date regarding applicable state and local
laws regarding employment issues.
THE ILLINOIS RELIGIOUS FREEDOM AND CIVIL UNION ACT
As of June 1, 2011, same-sex couples have the right to enter into civil unions and obtain
many of the same rights as married couples in Illinois. The Illinois Religious Freedom and Civil
Union Act provides in pertinent part:
“Partners joined in a civil union shall have all the same
protections, benefits, and responsibilities under law, whether
they are derive from statute, administrative or court rule,
policy, common law or any other source of civil or criminal law,
as are granted to spouses in a marriage.”
Thus, for state law purposes, civilly united couples should be entitled to the same rights as
married couples. Some of the major protections that the new law provides to civilly united
couples include:
•
•
•
•
•
•
•
•
•
Rights against discrimination on the basis of marital status, as set forth in the
Illinois Human Rights Act; Emergency medical decision-making power and hospital visitation rights;
Adoption and parental rights;
Tax benefits at the state and local level;
Spousal benefits provided by the State of Illinois; The right to share a room in a nursing home; Domestic relations rights and procedure (including divorce and division of
property);
Spousal testimonial privilege; and
Inheritance rights and equal estate tax treatment.
In light of these recent developments, Illinois employers should reexamine their
employment policies, particularly with respect to equal employment opportunities and
prohibitions against discrimination set forth in the Illinois Human Rights Act. After the Supreme
Court’s decision in U.S. v. Windsor, Illinois employers be required to adjust their tax and healthinsurance forms. Same-sex spouses will need to file new IRS and W-4 forms as well. Also, if an
employer offers ERISA-covered health insurance to straight spouses, the same coverage must be
extended to gay spouses as well. Gay spouses will also be the primary beneficiaries on 401(k)
plans.
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•
Religious Organizations
With respect to religious organizations, the Illinois Religious Freedom and Civil Union
Act protects religious organizations from “interference or regulation” in “granting the status,
sacrament, and blessing of marriage under wholly separate religious rules and practices.”
However, the scope of the Act’s exemption for religious organizations is limited. Indeed,
religious adoption agencies have already been informed that if they refuse to allow same-sex
couples to adopt, they will no longer be eligible to receive state funding.
As for employment discrimination, religious employers should be aware that employment
discrimination is governed by the Illinois Human Rights Act and not the Illinois Religious
Freedom and Civil Union Act. The Illinois Religious Freedom and Civil Union Act merely
requires that civilly united couples be included in the Illinois Human Rights Acts’ prohibition
against discrimination on the basis of marital status. This distinction is significant because the
Illinois Human Rights Act excludes religious organizations that make hiring in accordance with
religion from its definition of “employer.” As such, it appears that under certain circumstances
religious employers may make discriminatory employment decisions, so long as those decisions
are in accordance with religious beliefs. This is consistent with the rights afforded to religious
organizations under the First Amendment of the U.S. Constitution.
Nevertheless, it is strongly recommended that such organizations obtain the advice of
counsel before proceeding with discriminatory employment decisions in accordance with
religious beliefs, as there are many nuances in this area of employment law. For example, while
it may be legal to discriminate in accordance with religious beliefs under certain circumstances, it
is never legal to harass in accordance with religious beliefs, and sometimes there is a fine line
between what constitutes discrimination and what constitutes harassment. Moreover,
discriminatory policies that are not enforced consistently may not be protected. For example,
courts have held that religious organizations cannot terminate female employees who become
pregnant out-of-wedlock, unless they do the same for male employees who impregnate others
outside of wedlock. By overlooking such nuances, religious employers can be held liable under
state and federal discrimination laws.
Religious employers should also be aware that if they purchase employee health insurance
plans from insurance companies, such companies will be required by changes in Illinois insurance
laws to provide the same benefits for the partners of civilly united employees as the spouses of
married employees. Self-insured religious employers, on the other hand, may not be subject to the
same changes in insurance laws. However, self-insured religious organizations are strongly
encouraged to obtain the advice of counsel before deciding to deny benefits to the partners of
civilly united employees.
THE ILLINOIS EMPLOYEE CREDIT PRIVACY ACT
As of January 1, 2011, Illinois employers are no longer permitted to inquire into the credit
history of job applicants and employees pursuant to the enactment of the Employee Credit
Privacy Act (“ECPA”). Public Act 096-1426. The rationale behind this law is to protect job
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applicants and employees from the vicious cycle of poor credit and unemployment in one of the
worst economies that this country has faced since the Great Depression.
Employers should be aware that there are exceptions to the ECPA, which permit
employers to make and consider credit checks when hiring for positions that involve: (1) bonding
or security under state or federal law; (2) custody of, or unsupervised access to $2,500.00 in cash
or marketable assets; (3) signatory power over business assets of $100 or more per transaction; (4)
management and control of the business; or (5) access to personal, financial or confidential
information, trade secrets, or state or national security information.
THE ILLINOIS HUMAN RIGHTS ACT
In 1995, the Illinois legislature enacted the Illinois Human Rights Act (“the Act”), 775
ILCS 5/1 et seq. Article 2 of the Act applies to employment and applies to all employers having
15 or more employees within Illinois during 20 or more calendar weeks before the alleged
violation. However, with regard to handicap discrimination and sexual harassment, the Act
applies to any person employing one or more employees. Pursuant to Section 5/2(b)(2), certain
religious corporations are not considered employers under the Act. If an employee files a charge
of discrimination under the Act, an employer should consult with counsel regarding whether the
employer falls under this particular exemption.
The Act prohibits employers from discriminating against applicants and employees on the
basis of race, color, religion, national origin, ancestry, age, sex, marital status, handicap, military
status, sexual orientation, citizenship status, or unfavorable discharge from military service. The
Act also prohibits sexual harassment in the workplace and retaliation for exercising one’s rights
under the Act.
In addition, in 2009, the Act was amended to protect an employee from discrimination
based on his or her “order of protection status.” The Act defines the term “order of protection
status” to mean “a person’s status as being a person protected under an order of protection issued
pursuant to the Illinois Domestic Violence Act of 1986 or an order of protection issued by a court
of another state.” This means that employers may not make adverse employment decisions based
on the fact that an employee has an order of protection.
Section 2-102 of the Act prohibits employers from imposing a restriction that has the
effect of prohibiting a particular language from being spoken by an employee in communications
that are unrelated to the employee’s duties.
Section 2-103 of the Act prohibits employers from inquiring into or using the fact of an
arrest or criminal history record information ordered expunged, sealed or impounded as a basis to
refuse to hire, as a basis to segregate or to act with respect to recruitment, hiring, promotion,
renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or
terms, privileges, or conditions of employment. Nevertheless, employers are entitled to request
and use sealed felony conviction information obtained from the Department of State Police under
state or federal laws that require criminal background checks in evaluating the qualifications and
character of an employee or prospective employee. Moreover, the prohibition against the use of
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the fact of an arrest does not prohibit employers from obtaining or using other information which
indicates that a person actually engaged in the conduct for which he or she was arrested.
Section 5 of the Act prohibits discrimination in higher education. It applies to any
publicly or privately operated university, college, community college, junior college, business or
vocational school, or other educational institution offering degrees and instruction beyond the
secondary school level. Specifically, this section prohibits any higher education representative
from committing or engaging in sexual harassment in higher education or for any institution of
higher education to fail to take remedial action, or to fail to take appropriate disciplinary action
against a higher education representative employed by such institution, when such institution
knows that such representative was committing or engaging in, or committed or engaged in sexual
harassment.
Individuals may file charges of discrimination with the Illinois Department of Human
Rights (“IDHR”) within 180 days of the violation of the Act. The IDHR will attempt to resolve
the matter through mediation. If mediation is unsuccessful, the IDHR will investigate the charge
and conduct a fact-finding conference.
The IDHR has 365 days to conclude its investigation, unless the parties agree in writing to
an extension. After the investigation, a written report is prepared, indicating whether or not the
investigator found “substantial evidence” of a violation of the Act.
If the IDHR files a dismissal order based on a determination that there is no substantial
evidence of a violation, the complainant has the right to either seek review of the dismissal order
by the Illinois Human Rights Commission (“the Commission”) or file a civil action in circuit
court, which will be conducted in accordance with the Illinois Code of Civil Procedure. The
deadlines are as follows:
•
•
If the complainant chooses to seek review with the Commission, he must file his
request within 30 days of receipt of the IDHR’s notice of dismissal.
If the complainant chooses to file a civil action, he must do so within 90 days after
receipt of the IDHR’s notice of dismissal. If the complainant files a request for review
with the Commission, he is barred from later commencing a civil action in the circuit
court.
If the IDHR determines that there is substantial evidence of a violation of the Act, the
complainant has the right to file a civil action in circuit court or request that the IDHR file a
complaint with the Commission on his behalf. The deadlines are as follows:
•
If the complainant opts to file a civil action, he must do so within 90 days after receipt
of the IDHR’s notice.
•
If the complainant chooses to have the IDHR file a complaint with the Commission, he
must request such in writing within 14 days after receipt of the IDHR’s notice.
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•
If the complainant fails to timely request that the IDHR file the complaint, the
complainant may only commence a civil action in circuit court.
If the IDHR does not issue its report determining whether there is substantial evidence of a
violation of the Act within 365 days after the charge is filed (or after any extension period agreed
to in writing by the parties), the complainant has 90 days to either file his own complaint with the
Commission or commence a civil action in circuit court. However, a complainant who files a
complaint with the Commission is barred from later commencing a civil action in circuit court. In
a civil action in circuit court, either the plaintiff or defendant may demand a trial by jury.
Although employees must still initially file their discrimination complaints under the Act
with the IDHR, the amended Act provides employees several opportunities during the course of
the administrative proceedings to take their claim directly to circuit court. The significance of this
amendment is that employees now have, for the first time, the opportunity to have a jury decide
their case.
Under the new law, claimants must file their suits in the circuit court for the county in
which the alleged job discrimination occurred. While they are still entitled to all of the same
remedies previously available before the Commission alone, they now also have the enhanced
procedural right to a jury’s decision of all contested fact issues, including discriminatory intent.
THE VICTIMS’ ECONOMIC SECURITY AND SAFETY ACT
The Victims’ Economic Security and Safety Act (“VESSA”), enacted in 2003, is designed
to promote the State’s interest in reducing domestic violence, dating violence, sexual assault, and
stalking, by enabling victims of domestic or sexual violence to maintain the financial
independence necessary to leave abusive situations, achieve safety, minimize physical and
emotional injuries from domestic or sexual violence, and reduce the devastating economic
consequences of domestic or sexual violence to employees. 820 ILCS 180/1 et. seq.
VESSA requires covered employers to provide leave and other accommodations to
employees and their family members who are victims of domestic abuse or sexual violence.
Under the 2009 amendments to VESSA, the definition of “family or household member” was
expanded to include any person related by blood, or by present or prior marriage, and any other
person who shares a relationship through a son or daughter.
VESSA requires employers with 50 or more employees to allow employees who are
victims of domestic or sexual violence to take up to 12 weeks of unpaid leave to seek medical
attention, psychological or other counseling, legal assistance, or relocation. Additionally, under
the 2009 amendments to VESSA, these protections are expanded to employees who work for
smaller businesses. Under the new law, employers with 15 to 49 employees must provide up to
eight weeks of unpaid leave to such victims, while employers with 50 or more employees must
still provide up to 12 weeks of unpaid leave to victims.
Unlike the FMLA, the 2009 amendments to VESSA provide that employers may not
require that employees substitute other forms of paid or unpaid leave, such as vacation, personal
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leave, or FMLA, instead of using VESSA leave. Consequently, employees could utilize their
maximum allocation of VESSA leave and then, in the same 12-month period, use any accrued
paid time off. Employees, however, may elect to use those other forms of paid or unpaid leave if
they so choose. Moreover, unlike the FMLA, substitution must be allowed even if the leave
would not ordinarily be available under the applicable policy. For example, an employee must be
permitted to substitute paid sick leave for VESSA leave even in situations where the employee is
taking VESSA leave for a reason for which sick leave is not normally available.
VESSA applies to all employees, regardless of their length of employment. Thus, VESSA
is viewed as an improvement to the leave provided under the FMLA. However, VESSA does not
provide additional time if the request for leave also qualifies under the FMLA. When an
employee takes leave for a reason that would qualify under both the FMLA and VESSA (for
instance, to recover from injuries sustained as a result of domestic violence), the employee’s
VESSA and FMLA leave may run concurrently. Further, FMLA leave time counts against an
employer’s unpaid leave time available under VESSA.
If feasible, prior to taking any leave, employees must provide their employers with 48
hours’ notice. However, employees need not provide notice where it is not “practicable” to do so.
Leave may be taken in increments of hours, days, or weeks, as needed. Employers may require
evidence that leave is being requested for one of the following VESSA reasons:
•
To seek medical attention for, or recovery from, physical or psychological injuries
caused by domestic or sexual violence to the employee or the employee’s family or
household member;
•
To obtain victim services for the employee or the employee’s family or household
member;
•
To obtain psychological or other counseling for the employee or the employee’s
family or household member;
•
To participate in safety planning, including temporary or permanent relocation or other
actions to increase the safety of the victim from future domestic or sexual violence; or
•
To seek legal assistance to ensure the health and safety of the victim, including
participating in court proceedings related to the violence.
Certification or evidence of the need for leave can be obtained via a sworn statement from
the employee as to the reason for needing leave, documentation from a victim services
organization, attorney, clergy member, or medical or other professional from whom the employee
or the employee’s family or household member has sought assistance, and/or a police record or
other reasonably corroborating evidence. This certification must be provided within “a
reasonable period” of time after the employer requests the certification.
Like the FMLA, VESSA requires employers to provide health benefits to an employee on
VESSA leave. Also, upon return from leave, employees are entitled to be restored to the position
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held when the leave commenced or to an equivalent position with equal pay, benefits, and other
conditions of employment. Further, when an unscheduled absence occurs, an employer may not
take any action against an employee if the employee, upon request of the employer, provides
certification under VESSA within a reasonable time after the absence.
Employers must maintain the confidentiality of all information pertaining to the use of
VESSA leave, the notice of an employee’s intention to take VESSA leave, and the leave
certification provided by the employee.
VESSA further provides that employers (defined as the State or any agency of the State,
any unit of local government or school district, or any person that employs at least 50 employees)
may not discharge or discriminate against an employee who is a victim of domestic violence or
who has a family or household member who is a victim of domestic violence, for taking up to a
total of 12 weeks of leave from work during any 12-month period to address domestic violence.
VESSA also prohibits employers from discriminating against employees who are or are
perceived to be victims of sexual or domestic abuse. This includes any retaliatory acts against
employees who attempt to exercise their right to leave under the Act. Discrimination is further
defined to include employers who refuse to make reasonable accommodations for employees who
qualify under VESSA. Examples of accommodation include modification of an employee’s job
requirements, changes to physical workplace conditions, and implementation of certain safety
precautions.
In addition, VESSA requires employers to provide “reasonable accommodations” to the
known limitations of employees who are victims of domestic or sexual violence. The amendments
specify that a reasonable accommodation must be timely and that “any exigent circumstances or
danger facing the employee or his or her family or household member shall be considered in
determining whether the accommodation is reasonable.” The 2009 amendments expand VESSA’s
reasonable accommodations to include an “adjustment to a job structure, workplace facility, or
work requirement, including a transfer, reassignment, or modified schedule, leave, a changed
telephone number or seating assignment, installation of a lock or implementation of a safety
procedure, or assistance in documenting domestic or sexual violence that occurs at the workplace
or in work-related settings, in response to actual or threatened domestic or sexual violence.”
VESSA requires employers to notify employees of VESSA’s existence. Therefore,
employers must post a notice in the workplace summarizing the requirements under VESSA. The
2009 amendments provide that employers who fail to post the Illinois Department of Labor’s
mandatory poster may not rely on an employee’s failure to provide the required notice to deny
leave.
Employees who are refused unpaid leave may file complaints with the Illinois Department
of Labor. If an employer is found to have violated VESSA, the Illinois Department of Labor may
require the employer to pay damages equal to the amount of wages, salary, employment benefits,
public assistance, or other compensation denied or lost, with interest, or to provide equitable
relief, including but not limited to reinstatement, promotion and reasonable accommodations. If
warranted, attorney fees and court costs may also be collected by an employee.
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An employee has up to three years after an alleged violation of the Act to file a complaint
with the Illinois Department of Labor.
ILLINOIS EQUAL PAY ACT
The Illinois Equal Pay Act (“IEPA”) applies to all employers in Illinois with four or more
employees. It prohibits employers from paying unequal wages to men and women doing the same
or substantially similar work, requiring equal skill, effort, responsibility, and under similar
working conditions. 820 ILCS 112/10(a).
An employer is also prohibited from reducing the wages of other employees in order to
comply with the IEPA. The IEPA prohibits an employer from acting in a manner that would
interfere with, restrain, or deny the exercise or the attempt to exercise any right under the IEPA.
Specifically, the IEPA provides that it is unlawful for an employer to discharge or otherwise
discriminate against an employee who has:
•
filed a charge or caused a proceeding to be instituted under the IEPA;
•
given or intends to give information in connection with any inquiry or proceeding
relating to any right provided under the IEPA; or
•
testified or intends to testify in any inquiry or proceeding relating to a right provided
under the IEPA. 820 ILCS 112/10(c)(1)-(3).
However, the statute allows discrimination to exist where the payment is made under: (1)
a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality
of production; or (3) a differential based on any other factor other than (i) sex or (ii) a factor that
would constitute unlawful discrimination under the Illinois Human Rights Act. 820 ILCS
112/10(a)(1)-(4).
Under the 2009 amendments to the IEPA, employees are now required to file a wage
complaint. Also significant, employees previously had only 180 days from the date the employee
learned of the violation to file an administrative complaint. Now, employees may file a complaint
within one year of the underpayment. Further, an employee now has four years (rather than three)
from the date of underpayment to file a lawsuit against the employer.
The amendments also change the method for determining when a wage violation has
occurred in light of the Lilly Ledbetter Fair Pay Act. Previously, the limitations period began
running on the date the employee learned of the underpayment, but it now starts on the date of the
underpayment, which occurs each time an employee is underpaid. Therefore, an employee may
sue an employer based upon a compensation decision made many years before, as long as that
decision has affected the employee’s paycheck within the past four years.
The recent amendments to the IEPA also impose greater recordkeeping requirements on
employers. Employers now must “make and preserve records that document the name, address,
and occupation of each employee, the wages paid to each employee, and any other information
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the Illinois Department of Labor Director may deem necessary and appropriate for enforcement”
for at least five years. Previously, employers had to maintain records for only three years.
The Illinois Department of Labor is responsible for enforcing the provisions of the IEPA
by conducting investigations, inspecting records, and determining whether violations of the IEPA
have occurred. 820 ILCS 112/15. If an employer is found in violation of the IEPA, the following
damages may be imposed:
•
The entire amount of any underpayment together with interest and the costs and
reasonable attorneys’ fees as may be allowed by the court and as necessary to make
the employee whole;
•
A civil penalty not to exceed $2,500 for each violation for each employee affected. In
considering the amount penalized, the size of the employer’s business and the gravity
of the violation will be considered;
•
After the expiration of 15 days from being ordered by the Director of Labor to pay
wages due to an employee, the employer is liable to pay 1% per calendar day in arrears
of the date ordered to pay the employee; and
•
In situations involving knowing discrimination for purposes of retaliation against an
employee exercising rights under the IEPA or participating in proceedings under the
IEPA, the employer may be subject to any equitable relief, and to pay damages for the
value of any lost benefits, back pay, and front pay that is necessary to effectuate the
purposes of the IEPA, so long as the employee has taken steps to mitigate the
damages. 820 ILCS 112/30 & 112/35.
PRIVACY IN THE WORKPLACE STATUTES
It has become increasingly common for state legislatures to enact statutes granting
employees a certain amount of privacy from their employers. For example, the Illinois Right to
Privacy in the Workplace Act (“the Act”) provides that employers are precluded from
implementing employment actions on the basis of an employee’s or applicant’s private activities.
820 ILCS 55/5. The Act provides that it is unlawful for an employer to refuse to hire or to
discharge any individual, or otherwise disadvantage any individual, with respect to compensation,
terms, conditions or privileges of employment because the employee uses lawful products (i.e.,
cigarettes or alcohol) off the employer’s premises during non-working hours. The Act does
provide an exception to nonprofit organizations whose primary purpose or objective is to
discourage use of the lawful product.
An employer is also in violation of the Act if the employer terminates or negatively
responds toward an employee exercising his or her rights under the Act or assists another in
bringing or proving a claim under the Act. 820 ILCS 55/15.
Additionally, an employer is prohibited from inquiring into whether a prospective employee
has ever filed a claim for benefits under a Worker’s Compensation Act or Worker’s Occupational
Diseases Act or received benefits under either of these Acts. 820 ILCS 55/10. Employers are also
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prohibited from requesting passwords to social networking sites from current employees and
applicants. Id. However, employers may promulgate and maintain policies that govern employee
Internet, social network, and e-mail use. Id. Employers may also monitor employee use of
electronic equipment so long as the employer does not obtain passwords to do so. Id.
The Illinois Director of Labor is responsible for enforcing and administering the
provisions of the Act. In doing so, the Director of Labor may issue rules and regulations
necessary to enforce the Act. An employee may file a complaint alleging a violation of the Act
with the Department of Labor. The Department of Labor is responsible for investigating the
complaint, and it may issue search warrants or subpoenas to inspect records. The Department of
Labor will attempt to resolve the dispute through conciliation. If the claim is not resolved and the
Department of Labor determines that the employer violated the Act, the Department of Labor may
commence a civil action in circuit court to enforce the provisions of the Act and compel
compliance. The circuit court in the county in which the employer resides or is employed shall
have jurisdiction over claims brought under the Act. If the Department of Labor does not bring a
civil lawsuit after the conciliation process, the employee may bring a lawsuit should he or she
choose to do so.
However, an employee may bring a claim under the Act in circuit court only when the
Department of Labor fails to resolve the claim and the Department does not file its own suit in
any circuit court. Hampton v. Village of Washburn, 317 Ill.App.3d 439 (4th Dist. 2000).
Therefore, if the Department of Labor resolves the conflict or if the Department fails to settle the
matter and brings the claim to a circuit court, the employee is not entitled to bring the claim to a
civil circuit court on his or her own.
A court may punish an employer who fails to comply with a court order by holding the
employer in contempt of court. An individual found to violate the Act is guilty of a petty criminal
offense. If an employee succeeds in his or her claim, the court may award:
•
Actual damages and costs; or
•
Reasonable attorneys’ fees, actual damages, or $200, plus costs, if there is a willful
and knowing violation of the Act.
However, an employee’s claim will be dismissed if it is shown that alleged violations of
the Act are based solely on an employer’s offering health, disability, or life insurance policies that
make a distinction between employees for the type of coverage or the price of coverage based
upon the employee’s use of lawful product. 820 ILCS 55/20.
PERSONNEL RECORD REVIEW ACT
It is also common for states to enact legislation that entitles an employee, under certain
circumstances, to review his/her personnel records possessed by the employer. An example of
such legislation is the Illinois Personnel Record Review Act (“the Act). 820 ILCS 40/1 et. seq.
This legislation only applies to employers with five or more employees exclusive of the
employer’s parent, spouse, or child or other members of the employer’s immediate family, and
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includes an agent of the employer. To be covered under the Act, an employee must be a person
currently employed, subject to recall after layoff or leave of absence, with a right to return to a
position with the employer, or a former employee who has terminated service within the
preceding year.
The Act took effect in 1984, and provides that every employer shall, upon an employee’s
request, permit the employee to inspect any personnel documents which are, have been, or are
intended to be used in determining the employee’s qualifications for employment, promotion,
transfer, additional compensation, discharge or other disciplinary action. The employer may
require the employee to provide a request in writing on a form furnished by the employer. This
right extends to any personnel records of the employee that the employer maintains or contracts
with others to maintain. The employee may inspect all or part of the file.
The employer shall grant an employee at least two inspections in one calendar year when
the requests are made at reasonable intervals, unless a collective bargaining agreement provides
otherwise. The employer shall allow the inspection within seven working days after the request is
made. However, if the employer is capable of showing that the request could not be satisfied
within seven working days, an additional seven working days will be permitted to comply with
the request.
The inspection shall occur at a location reasonably near the place of employment and
during normal working hours. The employer may allow an inspection to take place in a location
other than where the records are maintained or at a time other than during normal working hours
if it would be more convenient for the employee.
There are several exceptions to the application of the Act. An employee is not given a
right to inspect his or her personnel file regarding:
•
letters of reference for that employee;
•
documentation of external peer reviews for academic employees of institutes of higher
education;
•
materials concerning the employer’s staff planning, such as records of business
developments, expansion, closing or operational goals;
•
test documents or any portion of a test document;
•
information of a personal nature about a person other than the employee, if releasing
the information would constitute a clearly unwarranted invasion of privacy;
•
employers who do not maintain personnel records;
•
records relevant to a pending claim between the employer and the employee that may
be discovered through judicial process; and
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•
investigatory or security records which, if disclosed, may reasonably be expected to
harm the employer’s property, operations, or business.
820 ILCS 40/10.
After the review period, an employee may obtain a copy of the information in the
employee’s personnel record. The employer may charge the employee a fee for the copy services,
but the fee must be limited to the actual cost of duplicating the information in the record. 820
ILCS 40/3.
The Act also punishes employers for not including information or documents in the
employee’s record which are required by the Act to be in the employee’s file. If an employer fails
to include information in an employee’s personnel record, the employer will not be permitted to
use such information in any subsequent judicial or quasi-judicial proceeding. However, if it is
found that the information was not intentionally excluded from the personnel file, the information
may be used if the employee is allowed to inspect the documents or has been given a reasonable
time to perform an inspection. 820 ILCS 40/4.
If an employee disagrees with the contents of his or her personnel file, he or she may seek
to have the information removed upon a mutual agreement with the employer. If an agreement is
not reached, the employee may submit a written statement explaining the employee’s argument,
and the statement shall be included in the employee’s file. If either the employer or employee
places any information in an employee’s file that is false, either party shall have a remedy
available through legal action to have the false information expunged from the file.
The Act also prohibits an employer from releasing a disciplinary record or reprimand from
the employee’s file to an external third party, except a labor organization representing the
employee, unless the employer first provides written notice to the employee. The written notice
must be sent by first-class mail to the employee’s last known address and mailed on or before the
day the information is disclosed. However, this requirement does not apply if: (1) the employee
has waived notice as required under this Act in a signed employment application with another
employer; (2) disclosure is ordered to a party in a legal action or arbitration; or (3) the information
is requested by a government agency due to a claim or complaint by an employee, or as a result of
a criminal investigation by a government agency.
A court has held that the Act also prohibits the dissemination of information in an
employee’s personnel file via oral statements in addition to written records. Bogosian v. Board of
Educ. of Community Unit School Dist. 200, 134 F.Supp.2d 952 (N.D. Ill. 2001). The court also
held that an elementary school teacher did not waive his right to notice by discussing incidents of
his employment with the press and his parents prior to the school district holding its own press
conference where such information was disclosed. The court concluded that an employee can only
waive the right to notice under this section through a written job application.
When an employer is permissibly releasing information from an employee’s personnel file
to a third party, the employer is also required to delete any disciplinary reports, letters of
reprimand, or other records of disciplinary action that are over four years old. 820 ILCS 40/8.
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The Act also mandates the types of information an employer may keep in an employee’s
personnel file. For instance, an employer is not allowed to maintain records of an employee’s
associations, political activities, publications, communications or non-employment activities,
unless the employee submits such information in writing to the employer or authorizes the
employer in a written statement to gather such information. 820 ILCS 40/9.
The Illinois Department of Labor is responsible for enforcing the provisions of the Act;
thus, in raising a violation, an employee is required to file a complaint with the Department of
Labor. The Department of Labor will conduct an investigation of the employee’s allegations and
attempt to resolve the complaint by conference, conciliation, or persuasion. If the complaint is not
resolved, the Department may file an action in the circuit court in the county in which the
employee resides, is employed, or where the personnel record is maintained.
The employee may commence an action in the circuit court, including an action to compel
compliance, where efforts to resolve the conflict with the Department of Labor have failed and
the Department has not commenced an action to rectify the alleged violations. 820 ILCS 40/12.
Failure to comply with a court order may be punished by contempt of court. If an
employer is held in violation of the Act, a court may award an employee the following:
(1) Actual damages plus costs; and/or
(2) $200, plus costs, reasonable attorneys’ fees, and actual damages if it found that
the employer violated the Act willfully and/or knowingly.
Further, any individual who violates the Act is also guilty of a petty criminal offense.
WAGE PAYMENT AND COLLECTION ACT
The Illinois Wage Payment and Collection Act (“the Act”) establishes when, where, and
how often wages must be paid, and prohibits unilateral deductions from wages or final
compensation without the employee’s consent. 820 ILCS 115/1 et seq. Notably, the Act also
prohibits company policies requiring employees to accept direct deposit of paychecks. The Act
requires employers to pay each employee his or her wages in a form that may readily be
converted into cash (without the need for a personal bank account), unless the employee
volunteers to be paid by direct deposit in an account at a bank or financial institution of the
employee’s choice. 820 ILCS 115/4 (West 2006); 56 Ill. Adm. Code 300.600.
Also, it is important to note that Sections 13 and 14 of the Act state that officers of a
corporation or agents of an employer who knowingly permit an employer to violate the Act shall
be treated as the employer and may be subject to personal financial liability or may be convicted
of a Class A misdemeanor.
Further, Section 11 of the Act allows employees to file complaints alleging violations of
the Act with the Department of Labor. On August 16, 2007, Illinois amended its Wage Payment
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and Collection Act to allow employees to file a complaint with the Department of Labor alleging
violations of the Act by submitting a signed, completed wage claim application on the form
provided by the Department of Labor and by submitting copies of all supporting documentation.
Complaints must be filed within five years after the wages, final compensation, or wage
supplements are due to be paid. The amendment further provides that the Department of Labor
shall review applications to determine whether there is cause for investigation and shall limit its
investigation to reviewing the three years prior to the date the wages, final compensation, or wage
supplements were due. This amendment also amends the Illinois Code of Civil Procedure to
provide that actions brought under the Illinois Wage Payment and Collection Act shall be
commenced within 10 years after the cause of action accrues. It should be noted, however, that
the statute does not prevent employees from filing a lawsuit in lieu of a complaint with the
Department of Labor.
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Practical Employment Considerations
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PREVENTATIVE EMPLOYMENT MEASURES
This section is meant to provide suggestions for an employer’s course of conduct, as well
as preventative measures that employers should consider implementing in the following
employment practice areas: Job Postings, Pre-Employment Screening, Hiring, Performance
Reviews, Disciplinary Actions, Leave of Absence Policies, Advancements or Promotions,
Layoffs and Terminations, and References for Former Employees.
JOB POSTINGS
When posting job listings, an employer should be certain that it is clear that applications
are being sought from persons regardless of age, sex, race, national origin, disability, religion, or
any other prohibited basis. (See sections on ADA and Title VII). This can be accomplished by
stating directly in the job advertisement that the employer is an equal opportunity employer.
However, a less direct but effective message is sent when positions are posted in an advertising
medium that has widespread readership. The following are helpful suggestions to bear in mind
when posting job listings:
Consider:
•
Listing jobs with newspapers and/or other advertising media that are circulated to a
widespread readership with varied demographics.
•
Advertising jobs in gender-neutral language.
•
Stating in job postings that the employer is an equal opportunity employer.
•
Limiting job postings to advertising media that have limited circulation. For instance,
do not post a job advertisement only with a Christian newspaper. Instead, make sure
the job posting is received by a broad readership (See ADA and Title VII sections
regarding religious exemptions).
•
Making job descriptions specific to one gender (i.e. do not advertise a job opening for
a cleaning woman or a maintenance man).
•
Restricting job applicants to a certain age or using descriptive language which would
imply that only younger applicants will be considered.
Avoid:
PRE-EMPLOYMENT SCREENING
Employers often complete background checks on applicants and receive consumer reports
during employment. Some employers only want an applicant’s or employee’s credit payment
records; others want driving records and criminal histories. For sensitive positions, it is not
unusual for employers to order investigative consumer reports – reports that include interviews
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with an applicant’s or employee’s friends, neighbors, and associates. All of these are considered
consumer reports if they are obtained from a consumer reporting agency (“CRA”).
Investigating the background of a potential employee through pre-employment screening
can minimize the risk of negligent-hiring lawsuits. Companies can be held liable for the actions
of a new employee especially if the employer did not perform a background check. Employers
often use screening mechanisms when hiring new employees and when evaluating employees for
promotion, reassignment, and retention. Sections 604, 606 and 615 of the Fair Credit Reporting
Act (“FCRA”) spell out an employer’s responsibilities when using consumer reports for
employment purposes.
Under the FCRA, businesses are required to have employees sign a disclosure form
granting authorization to perform a background check. The FCRA is not restricted to credit
reports, but also includes all consumer reports obtained by a CRA.
Before an employer rejects an applicant based upon his or her credit report, the employer
must make a pre-adverse action disclosure that includes a copy of the report and a summary of
consumer rights under the FCRA. This notice must also inform the individual how to dispute the
rejection.
Laws vary from state to state as to how and what information can be used during the preemployment screening process. Certain state laws prohibit using certain aspects of a criminal
record during a background check for employment purposes. For instance, the Illinois Human
Rights Act prohibits the use of arrest records as a justification for an adverse employment
decision. This is due to the disparate impact on certain minority groups that could result.
In 2012, the EEOC approved new federal enforcement guidelines related to the use of
arrest and conviction records by employers. Essentially, the new guidelines state that most
employers cannot deny a job simply because a person has been arrested or even convicted.
Instead, employers should develop targeted screens taking into account the nature of the
conviction, the particular duties of the job, and the time that has passed since the conviction. It is
wise to consult with counsel familiar with your state and local laws before delving too deeply into
the criminal past of an employee or an applicant for employment.
Damages
There are legal consequences for employers who fail to obtain an applicant’s permission
before requesting a consumer report or who fail to provide pre-adverse action disclosures and
adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue
employers for damages in federal court. A successful plaintiff is entitled to recover court costs
and reasonable legal fees. The law also provides for punitive damages for deliberate violations. In
addition, the Federal Trade Commission, other federal agencies, and some states may sue
employers for non-compliance and obtain civil penalties.
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Consider:
•
Implementing pre-employment screening to verify employment references, personal
references and academic degrees.
•
Outsourcing the pre-employment screening to a consumer reporting agency. In hiring an
outsider, the employer will receive assistance with finding accurate, complete information
regarding job candidates. An outsourcing partner should be able to steer you through the
legal requirements as well as federal and state regulations regarding background
screening.
•
Centralizing the background checking process (or the results received from an outside
background checking agency) in one department, such as Human Resources.
Avoid:
•
Allowing widespread access to pre-employment screening results to individuals who are
not directly involved in the process for a business-related reason.
•
Implementing a system of pre-employment screening that is not administered
evenhandedly.
•
Using pre-employment screening to discover negative information on isolated employees
or groups of employees.
HIRING
The interview and hiring process can be intimidating not only for the potential employee,
but also for the employer – especially in light of the requirements imposed by federal statutes.
Therefore, familiarity with Title VII, the Americans with Disabilities Act, the Age Discrimination
in Employment Act, the Civil Rights Act of 1991, and the Equal Pay Act is essential for all those
involved in the interview and hiring process. An employer’s policy of nondiscrimination must
carry over from the job posting process to the hiring process. Even when intentions are good,
often the wrong impression may be conveyed by interview questions that are inappropriately
posed. The following suggestions may be of assistance in avoiding the use of inappropriate
interview questions and other pitfalls during the hiring process:
Consider:
•
Periodically educating supervisors and others making hiring decisions as to the
requirements of the ADA, Title VII, the ADEA, the Civil Rights Act of 1991, the Equal
Pay Act, and any relevant state or local statutes.
•
Soliciting and accepting applications from persons from all walks of life.
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•
Conducting interviews that focus on the individual’s abilities and qualifications in addition
to the requirements of the job.
•
Asking potential employees whether they feel they can perform the requirements of the
job.
•
Hiring individuals based on their qualifications and legitimate employer requirements.
•
Striving for a diverse workforce.
Avoid:
•
Leaving supervisors to fend for themselves when making hiring decisions.
•
Restricting interviews and hiring to a particular age, sex, race, religion, or national origin.
•
Excluding persons with disabilities from the hiring process.
•
Asking an individual’s age in an interview.
•
Asking questions that are specific to an applicant’s personal life. (i.e., “Are you married?”
or “Do you intend to have children?”). Instead, ask the individual to relay something about
him or herself.
•
Asking the individual if he or she has a disability or any work restrictions. Instead,
describe the essential functions of the position, and ask the individual if he or she can meet
the requirements.
•
Asking about an individual’s health. This may be construed as an ADA violation if the
individual has a disability or is perceived to have a disability.
•
Asking an individual to disclose his or her national origin during an interview. If the
individual volunteers the information, that is fine. If not, the information is not relevant to
the hiring process.
•
Asking an applicant about his or her religion, unless the employer falls within one of the
statutory exemptions discussed previously in this manual. Seek legal advice first.
PERFORMANCE REVIEWS
Performance reviews are essential for a number of reasons. Reviews provide employers
with an opportunity to evaluate the proficiency and productivity of their workforce. They also
provide employees with useful information regarding their performance. Written performance
reviews also provide critical documentation that can assist in an employer’s defense if and when
an employee alleges claims of discrimination. Therefore, it is in the employer’s best interest to
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ensure performance reviews are periodically given and documented in an employee’s personnel
file.
Consider:
•
Conducting reviews on a set schedule and sticking to it (i.e. every six months or yearly).
•
Having each employee reviewed by more than one source to ensure objectivity.
•
Having a pre-printed form for reviews indicating specific areas to be critiqued.
•
Ensuring that reviews are fair and accurate, highlighting both the good and the bad.
•
Having reviewers meet with employees to explain the evaluations.
•
Clearly conveying to employees the areas that need improvement and drafting a plan for
improvement.
•
Showing employees the written reviews.
•
Allowing employees to make written comments on the review form.
•
Having the employee sign the form, indicating that he or she was apprised of its contents.
•
Keeping review forms as part of employee personnel files.
Avoid:
•
Procrastinating or failing to provide timely reviews.
•
Leaving supervisors to fend for themselves regarding how and when to conduct reviews.
•
Prohibiting employees from examining written reviews.
•
Refusing to accept employee comments regarding reviews.
•
Reviewing certain employees but not others.
DISCIPLINARY ACTION
It is essential that employers have a uniform system of disciplinary action in place. Often,
it becomes necessary to terminate an employee who does not comply with the employer’s policies
or rules. However, if no documentation regarding disciplinary infractions or corrective action is
contained in an employee’s personnel file, it becomes more difficult to defend wrongful
termination suits. Therefore, a written system of progressive discipline should be in place,
distributed to employees and followed by the employer.
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Consider:
•
Having a written system of progressive discipline in place (i.e. oral warning, written
warning, suspension and termination).
•
Making sure that the established disciplinary action policy is followed.
•
Advising employees of the disciplinary action policy.
•
Keeping written records of any disciplinary action taken and the reasons for the action,
including a record of oral warnings.
•
Having pre-printed forms for each step of disciplinary action.
•
Counseling employees when any disciplinary action is taken and advising them as to how
they can improve.
•
Having the employee sign a form indicating that a meeting regarding the infraction was
held. The form should detail any corrective suggestions and actions taken by the
employer.
•
Enforcing the progressive discipline policy evenhandedly (i.e. no extra chances for
favorite employees).
•
Providing an exemplary list of actions for which discipline may result (i.e. tardiness,
absenteeism, poor performance).
•
Ensuring that supervisors are aware of and follow the disciplinary policy.
•
Informing the employee and documenting that the employee was advised that further
infractions may result in additional disciplinary action up to and including termination of
employment.
Avoid:
•
“Papering the file” after the fact.
•
Letting supervisors devise their own system of progressive discipline.
•
Overlooking offenses when committed by favorite employees.
•
Enforcing disciplinary policies selectively.
•
Refusing employees the opportunity to review their disciplinary records.
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LEAVE OF ABSENCE POLICIES
An employee may request a leave of absence for a variety of reasons, such as pregnancy,
illness, disability, illness of a family member, etc. It is important when formulating a policy
regarding leaves of absence to ensure that consideration is given to the ADA, the FMLA, and
Title VII, as well as any state or local ordinances. As a general rule, leave of absence policies
should be uniform, regardless of the reason for the leave. For example, the maternity leave policy
should not be less favorable than the policy for disability leave, in order to avoid pregnancy
discrimination claims.
Consider:
•
Drafting a leave of absence policy and advising employees of the policy in writing upon
hiring.
•
Making sure the policy complies with the ADA, the FMLA, and Title VII, provided the
company meets the threshold number of employees for each of these statutes.
•
Making sure leaves taken for one particular reason (i.e. maternity) are fair when compared
to leaves taken for other reasons, in order to avoid discrimination claims (i.e. pregnancy
discrimination).
•
Ensuring that the policy is enforced evenhandedly.
•
Educating supervisors with respect to the policy.
•
Maintaining accurate records when leaves are requested and taken.
Avoid:
•
Subscribing to the policy of “making it up as we go along.”
•
Bending the rules for favorite employees or tightening the rules for less-favored
employees.
•
Changing policies without notice to employees.
•
Applying different standards and policies based on the purpose for the requested leave of
absence.
ADVANCEMENTS OR PROMOTIONS
Federal employment statutes (as well as many state and local statutes) prohibit
discrimination with respect to advancement and promotion. Therefore, common sense dictates
that the best policy to follow when seeking to promote an employee or fill a vacant spot within
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the organization is to choose the most qualified individual without regard to race, sex, national
origin, age, religion, disability or any other prohibited basis. It is important that employment
decisions regarding promotions have a clear, legitimate basis. Thus, an employer should always
be able to clearly articulate a well-founded, nondiscriminatory reason for its choice to promote or
advance one candidate over another.
Consider:
•
Clearly stating the requirements for the job.
•
Advancing or promoting individuals who have the requisite qualifications, without regard
to sex, age, race, national origin, religion, disability or any other prohibited basis.
•
Choosing the most qualified candidate.
•
Documenting interviews and reasons for granting or denying advancement or promotion.
Avoid:
•
Restricting applications for advancement to a particular class (i.e. men or those under the
age of 40).
•
Circulating the word about open positions only to favorite or selected employees.
•
Considering only members of a certain class or race for advancement or promotion.
LAYOFFS AND TERMINATIONS
As with all other employment decisions, layoffs and terminations should be effected
without regard to age, sex, race, national origin, religion, disability or any other prohibited basis.
Therefore, it is imperative that employers have a clear policy regarding layoffs and terminations.
A policy that has both a nondiscriminatory intent and a nondiscriminatory impact should be
enacted (i.e. last hired, first laid off).
If applicable in the employer’s state, employee handbooks should clearly indicate that
employees are “at-will,” meaning that they may be terminated at any time, with or without notice,
and for any reason. Although this policy may seem harsh, it protects employers against lawsuits
alleging breach of contract for termination in violation of a handbook provision. Furthermore,
when employees are terminated for cause, a clear record should be maintained in the employee’s
personnel file showing progressive discipline leading up to the termination.
Consider:
•
Having a nondiscriminatory written policy regarding layoffs and terminations, and
following it.
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•
Having a legitimate reason for all termination decisions.
•
Making sure that if the termination decision relates to discipline or performance, the
employee’s personnel file has been properly documented before the fact.
•
Advising employees of all adverse termination decisions in person.
•
Advising the employee of the real reason for the adverse action. Keeping this information
from the employee may create an inference that the employer has “something to hide” and
can lead to a discrimination suit.
•
Providing supervisors with a pre-printed form for terminations with a space for the reason
for termination. Have the employee sign the form and keep it in the employee’s personnel
file.
Avoid:
•
Playing favorites when it comes to layoffs.
•
Letting factors such as race, age, sex, disability, national origin, religion or other
prohibited bases play a role in layoff or termination decisions.
•
Keeping the reason for the layoff or termination from the employee.
•
Failing to properly document the employee’s personnel file regarding the reason for the
termination.
•
“Papering the file” after the fact with documents regarding the reasons leading up to the
termination. Instead, make sure the file is properly documented ahead of time.
REFERENCES FOR FORMER EMPLOYEES
Many employers find it difficult to deal with providing references for former employees,
especially for those employees who left the employer under difficult circumstances. The most
trying circumstances are those involving terminations or situations where the employee left as
part of an agreed separation and/or in exchange for some form of compensation or consideration.
In situations where the employer is considering entering into a separation agreement with
an employee, the agreement should address how references will be handled. This can be
negotiated and agreed to at the time of the employee’s separation so that problems are unlikely to
arise later.
Consider:
•
Implementing a policy that designates a person or department, most likely Human
Resources, to handle references.
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•
Indicating within the policy that supervisors and other employees are prohibited from
responding to reference requests.
•
Limiting reference information to dates of employment; the position held; a basic
description of the duties associated with the position; and a confirmation of the
employee’s final salary.
Avoid:
•
Leaving supervisors to fend for themselves when giving references, especially for
employees who were terminated or separated under negative circumstances.
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EMPLOYEE HANDBOOKS
An “employee handbook” generally refers to a collection of personnel and benefits
policies written by an employer and disseminated to its employees. Employee handbooks are
often the source of an implied contract between the employer and employee, and may limit the
employer’s ability to discharge an otherwise at-will employee. Currently, over half of the 50
states have found employee handbook language to be contractually binding on the employer.
Careful wording of employee handbooks and manuals will decrease the risk of a finding
that an implied contract exists, thus protecting an employer from liability. Fortunately for
employers, there is a considerable amount of state case law which cites examples of language that
do not give rise to an implied contract.
AT-WILL EMPLOYMENT
“Employment-at-will” means that an employer may discharge an employee for a good
reason, no reason, or even a bad reason, as long as the reason is not unlawful (i.e. discriminatory).
If a state is an employment-at-will state, then as a general rule, courts will presume that an
employment relationship is an at-will relationship. If, on the other hand, the state does not follow
the employment-at-will doctrine, an employer’s ability to discharge an employee for no reason
may be limited.
In employment-at-will states, this presumption of an employment-at-will relationship may
be overcome if the employee can demonstrate that he or she and the employer had agreed
otherwise. Usually, this means the employer and employee entered into an agreement that the
employer may only discharge the employee “for cause” or pursuant to certain agreed-upon
conduct. Furthermore, the employer and employee may agree that the employee is entitled to
certain procedures before discipline and discharge can take place.
Such an agreement between the employer and employee often takes the form of a written
contract. However, even without a written contract, courts will, at times, find that an implied
contract arose out of the employer’s conduct (oral promises and representations), out of the course
of dealing between the parties, or from employee handbooks and manuals. Such implied contracts
may limit the employer’s ability to discharge an otherwise at-will employee.
If the employer and employee have contracted (either expressly or by implication), then
employment is not at-will, and a discharged employee may have a cause of action against the
employer. Therefore, if the employer does not follow the terms of the contract, the employee may
have a breach of contract claim against the employer. Nonetheless, employers must keep in mind
that regardless of the relationship between the employer and the employee, employees can always
choose to pursue a cause of action against an employer for statutorily prohibited conduct (i.e.
discrimination, retaliation, harassment, etc.).
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HANDBOOKS & IMPLIED CONTRACTS
If a court determines that an employer’s handbook gives rise to an implied contract
between the parties, an employer cannot then discharge or discipline an employee without
following the terms of the handbook. For example, if the handbook contains a systematic
discipline procedure, the employer may be liable for breach of contract if it disciplines the
employee in a manner that is inconsistent with the expressed procedure. Likewise, if the
handbook states that an employee can only be discharged for specific, articulated conduct, the
employer may be found in breach of contract if it discharges the employee for conduct which is
not one of the reasons articulated as leading to discharge in the handbook.
In determining whether certain terms in an employee handbook contractually bind the
employer, the most common thread among court decisions is the existence of a definite promise
by the employer to not discharge the employee except “for cause” or for the reasons articulated in
the handbook.
Whether or not a court finds the existence of an implied contract is heavily dependent on
the specific language contained in the employee handbook. Therefore, it is important that
employers carefully draft their handbooks to ensure that no promises are made. Use of terms such
as “may” and “could” as opposed to “shall” and “will” help avoid the appearance that a promise
has been made.
Courts have taken many different approaches toward determining when an employment
handbook constitutes an implied contract. In Duldulao v. St. Mary of Nazareth Hospital, 505
N.E.2d 314 (Ill. 1987), the Illinois Supreme Court found that an employee could defeat the
presumption of employment-at-will by establishing three factors relative to a handbook:
(1) The handbook language contains a promise clear enough that an employee would
reasonably believe an offer was made;
(2) The handbook is disseminated to the employee in such a manner that the employee
is aware of its contents and reasonably believes it to be an offer; and
(3) The employee accepts the offer by commencing or continuing to work after
learning of the policy statement.
According to the Duldulao court, “when these conditions are present, then the employee's
work constitutes consideration for the promises contained in the statement, and under traditional
principles a valid contract is formed.” In sum, the court found that “an employee handbook or
other policy statement creates enforceable contractual rights if the traditional requirements for
contract formation are present.”
These three factors were restated in the matter of Ross v. May Company d/b/a Marshall
Fields and Co., 880 N.E.2d 210 (2007). If the employee is capable of establishing the above
elements, the employee must also show a breach of the promises contained in the handbook and
damages as a result of the breach.
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Another approach was followed in Lewis v. Equitable Life Assurance Society of the U.S.,
389 N.W.2d 876 (Minn. Sup. Ct. 1986), where the court held that to create an employment
contract, a promise of employment on particular terms must be presented in the form of an offer
and must be accepted by the employee. The offer must be definite in form and must be
communicated to the employee. Acceptance by the employee is satisfied by the employee’s
continued employment.
Before a court in an employment-at-will state will find that an employee handbook gives
rise to an implied contract, there must be a promise clear enough that an employee would
reasonably believe an offer has been made. In Helland v. Kurtis A. Froedtert Memorial Lutheran
Hospital, 601 N.W.2d 318 (Wis. Ct. App. 1999), the court held that the “at-will” employment
relationship is only altered when a handbook contains express provisions from which it can be
reasonably inferred that the parties intended to bind each other to a different employment
relationship.
Generally, if the language contained in the handbook makes specific promises to the
employee, it is likely that a court will find the existence of an implied contract. Therefore, if the
employer uses language such as “promise(s)”, “the employer will…”, “the employer shall…”, or
“the employee has the right(s),” a court may find that the employer made specific promises to the
employee.
Courts have construed the following instances to constitute an employment contract:
•
An employer’s handbook containing language that was sufficiently clear to lead an
employee to believe that reasonable cause must exist before discharge. Wood v.
Wabash County, 722 N.E.2d 1176 (Ill. App. Ct. 1999). The handbook contained
detailed steps the employer would take prior to discharge and the actions that would be
taken in each step. The handbook also stated that dismissals would be for “reasonable
cause” and, if such reasonable cause for dismissal existed, a written notice of such
cause would be issued and a hearing scheduled. The court found that the employer
only reserved discretion not to use all the steps of the disciplinary procedure and not
the use of the procedure in general.
•
A letter stating: “tenure is achieved after the successful completion of 6 (six) months of
service with our agency” and a handbook stating: “[p]ermanent employment status is
attained upon successful completion of the tenure probation period with the Agency.”
Robinson v. Ada S. McKinley Community Services, 19 F.3d 359 (7th Cir. 1994). The
handbook also described disciplinary procedures in mandatory language using the
terms “shall”, “must”, and “requires” when describing actions that would be taken
by the employer. This language gave rise to a reasonable belief that employees could
not be terminated without certain protections.
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•
An employment manual that employees were required to read and be “thoroughly
familiar with the personnel policies contained” therein within 10 days and sign a
signature page because it was “extremely important.” Vajda v. Arthur Andersen &
Co., 624 N.E.2d 1343 (Ill. App. Ct. 1993). The manual also stated that employment
decisions were to be based on qualifications and merit alone, and the manual contained
a clearly established three-warning policy that prescribed specific disciplinary
procedures to be used prior to discharging an employee.
•
An employment handbook containing the following provision: “Except for misconduct
serious enough to warrant immediate dismissal, no employee will be discharged
without previous warning and a period in which to bring performance up to a
satisfactory level.” The court held that this language was definite enough because it
limited the right to freely dismiss employees.
Because a court in an employment-at-will state must find that there is a clear promise by
the employer for there to be a contract, if the employer uses vague and non-promissory language,
the at-will relationship will not be altered. Therefore, if the employer uses language such as
“may”, “possibly”, or “including, but not limited to…”, a court is much less likely to find that
the employer made specific promises to the employees and the at-will employment relationship is
not likely to be inadvertently altered. Furthermore, if the handbook clearly states that the
employer retains the right to discharge the employee at any time and without notice, a court is not
likely to find reasonable reliance by the employee that he or she would only be discharged for
cause.
Courts have construed the following suggestive or discretionary language to not give rise
to an employment contract:
•
An employee handbook describing conduct that “may be” subject to employee
discipline and describing certain types of disciplinary action that might be taken.
Frank v. South Suburban Hospital Foundation, 628 N.E.2d 953 (Ill. App. Ct. 1993).
The employee manual contained no promise to follow that course of progressive
discipline in every situation, and the policies expressly provided that the type of
discipline depends entirely upon the severity of the offense, as determined by the
employee’s supervisor. The court found that because the language was not mandatory,
but discretionary, no contract for employment was formed.
•
An employee handbook stating: “[V]iolations of the rules and regulations may result
in disciplinary action for the offender. . . Violations will be grounds for progressive
disciplinary action, which may include a correction interview, written warning,
probation, suspension without pay, or termination.” Rudd v. Danville Metal Stamping
Co., 550 N.E.2d 674 (Ill. App. Ct. 1990). Since there was no specific description of
disciplinary procedures and the handbook did not promise that specific disciplinary
procedures would ever be used, no employment contract was formed.
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Courts have construed the following to not constitute employment contracts, based on lack
of specificity in the description of disciplinary procedures:
•
A handbook containing the following provisions: “in most cases disciplinary action
will begin with…” and “dismissal may occur immediately.” Orr v. Westminster
Village North, 689 N.E.2d 712 (Ind. App. Ct. 1997). Furthermore, the handbook stated
that the articulated list of dischargeable violations was “not intended to be all
inclusive.” The court held that these statements were vague, general, and gave the
employer broad discretion so as to keep the handbook from becoming an implied
contract.
•
A handbook advising employees that “[t]o continue working at [the company], each
employee must meet [the company’s] performance expectations. For the few
employees who do not make that commitment, progressive discipline and/or discharge
may result.” St. Peters v. Shell Oil Co., 77 F.3d 184 (7th Cir. 1996). Since the
provision did not require the employer to follow prescribed procedures of progressive
discipline, the court held that the plaintiff had no enforceable contract right to
progressive discipline.
•
A handbook which stated that employees would only be discharged for “just cause”
and listed specific grounds for an employee’s discipline or dismissal, stating,
“violation of policies. . . may result in dismissal. . .[and] [i]f an employee’s work is
unsatisfactory, he will be informed of this. . . and encouraged to improve.” Tolbert v.
St. Francis Extended Care, 545 N.E.2d 384 (Ill. App. Ct. 1989). The court found that
the lack of articulated procedures for dismissal prevented the handbook from
becoming an employment contract.
Courts have construed the following to not constitute employment contracts based on their
non-exclusive list of reasons for termination:
•
A handbook stating: “dismissal of an employee may result because of . . .” and setting
forth five reasons. Toombs v. Champaign, 615 N.E.2d 50 (Ill. App. Ct. 1993). The
court held that the employer was not limited to firing an employee only for the reasons
listed in its handbook because the list was not exhaustive and other reasons for
dismissal were permissible.
•
An employee handbook asserting six examples of discharge “for cause.” Johnston v.
Panhandle Cooperative Association, 408 N.W.2d 261 (Neb. App. Ct. 1987). The
court reasoned that because the handbook did not limit the reasons for discharge to the
six examples or state that there were any restrictions on the employer’s right to
discharge, the employment-at-will status had not been altered.
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•
A handbook stating, “in the event of a serious offense, an employee will be terminated
immediately.” Hunt v. IBM Mid America Employees, 384 N.W.2d 853 (Minn. Sup. Ct.
1986). The court held that because the handbook neither defined “serious offense” nor
gave examples, such vagueness fell short of the specificity necessary for a contractual
offer.
“ACCEPTANCE” OF THE HANDBOOK
Because an implied contract is based on general contract law, courts will require that there
be acceptance by the employee of the promises made by the employer. In states that recognize
employee handbooks as contracts, court decisions clearly indicate that for there to be acceptance
by the employee, the employee must, at a minimum, be aware of the existence of the employee
handbook which has been disseminated by the employer. For example, in Hohmeier v. Leyden
Community High School Dist. 212, 954 F.2d 461 (7th Cir. 1992), the court held that because the
plaintiff did not receive a copy of the policy manual provision regarding termination until her
discharge, and she had no idea that such a provision existed until after her discharge, no contract
existed. The court held that the plaintiff could not have reasonably believed that a document
given to her at the time of termination constituted an offer of employment. Thus, she could not
have based her employment on the language in the policy.
Similarly, in Harrison v. Sears, Roebuck & Co., 546 N.E.2d 248 (Ill. App. Ct. 1989), the
court found that since the plaintiff did not know the manual existed prior to her termination and
the manual was not disseminated to employees, the plaintiff did not rely on the manual.
Therefore, no contract for employment existed.
DISCLAIMERS
If a state has adopted the employment-at-will doctrine, one of the most effective tools to
ensure that an employee handbook does not give rise to an implied contract is a written disclaimer
in the handbook that states that the handbook does not alter the employment-at-will relationship.
However, the mere existence of a disclaimer statement does not automatically lead to the
preservation of the at-will employment relationship.
Whether a particular disclaimer is effective in preserving the at-will relationship is heavily
dependent on the applicable state’s court decisions. However, a disclaimer is generally considered
effective if it is printed in a manner that is prominent. For the disclaimer to be sufficiently
prominent, the text should be set off from other handbook language by use of larger type,
contrasting print, and/or capitalized letters. The disclaimer should also be placed so that a
reasonable person should notice it. For example, the disclaimer should be on a separate page and
in the front of the handbook. Furthermore, the language of the disclaimer should be clear and
unambiguous so that a reasonable person would understand that the handbook is not a contract
and that the employment relationship remains at-will.
Court decisions reveal that the most effective disclaimers are those that are acknowledged
and signed by the employee. As long as there is no language in the handbook that contradicts the
disclaimer, courts will generally give effect to the disclaimer. Courts generally require that for a
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disclaimer to be effective, it must be conspicuous, unambiguous, and contain language
disclaiming the formation of a contract. Hardy v. S.F. Phosphates Limited, 185 F.3d 1076 (10th
Cir. 1999). In Hardy, the court held that the following bold-print disclaimer which the employee
signed was sufficiently conspicuous and unambiguous: “… I understand that employment and
compensation can be terminated at will, with or without cause, and with or without notice, at any
time, either at the option of the employee or the company…” (emphasis altered).
Similarly, in Chesnik v. Saint Mary of Nazareth Hospital, 570 N.E.2d 545 (Ill. App. Ct.
1991), upon receiving a handbook, an employee signed a disclaimer stating: “I understand that
the employment relationship between myself and the Hospital is not contractual in nature.” The
handbook also provided that personnel policies were “subject to change without my prior
notification and I am subject to policy changes as they are made.” The court found that even if
the disclaimer was ambiguous when viewed in isolation, the second provision cited made it
reasonably clear that the employee handbook was not intended to promise anything.
However, the opposite result was reached in Hicks v. Methodist Medical Center, 593
N.E.2d 119 (Ill. App. Ct. 1992), where the court found that the employer’s disclaimer did not
prevent its handbook from becoming the basis of a contract. The disclaimer was under a section
entitled “Revisions,” rather than a section entitled “Disclaimer.” The provision was on page 38 of
the handbook, not highlighted, not printed in capital letters, and not in any way prominently
displayed. As a result, the court found that it was not conspicuous enough to negate the promises
made, and the handbook did form a contract.
It is a wise policy to clearly disclaim somewhere near the beginning of a handbook that
the handbook is not intended to create contractual obligations. Also, remember that disclaimers
should be designed to “catch the attention of the reader” – altering font size and type is
recommended, as is underlining, highlighting and bolding the text. Sample language is provided
below: DISCLAIMER The provisions of this handbook do not create any legal rights. Employment relationships that are not subject to a specific, signed contract between the individual employee and _________________ are considered “employment at will,” meaning the relationship is voluntarily entered into and has no specified term or length. The employee is free to resign at will at any time, with or without cause. Similarly, ________________ may terminate the employment relationship at will at any time, with or without advance notice or cause. The nature of employment for some employees of _________________ is contract-‐based. The terms and conditions of such employment are defined solely by each employee’s individual contract, and are not added to or subtracted from by any other document or policy. Employment is governed ©2014 Kopon Airdo, LLC
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exclusively by the terms and conditions set forth in applicable contractual provisions. Nothing in this handbook can be read to alter the terms or conditions of an employee’s contract. This handbook only serves to highlight ___________________’s policies, practices, and benefits for your personal education and cannot be construed as a legal document. Additionally, no procedure outlined in this handbook can be read to constitute the precise methodology which will be followed in every situation. These policies merely outline the procedures and actions the company will strive to follow in order to resolve those grievances which may arise from time to time. MODIFICATION OF AN EXISTING EMPLOYEE HANDBOOK
Whether an employer can modify a handbook is determined by each individual state.
Illinois courts hold that for an employer’s modification to be valid, the modification must either
result in a detriment to the employer or give some benefit to employees. Doyle v. Holy Cross
Hospital, 708 N.E.2d 1140 (Ill. 1999). The court in Doyle held that the employer’s unilateral
modification of its employee handbook was not binding on its existing employees. The mutual
agreement of the parties that was needed to form a contract was lacking because the employer
made unilateral modifications that were detrimental to existing employees. The court held that
for there to be sufficient evidence of a mutual agreement to change the handbook so that the
modification is binding, the employer must also suffer a detriment or give employees something
in return. However, if the modification is of benefit to the employees, the employer must suffer
no such detriment and the modification is binding. The court noted that the modified handbook
was binding on employees who began employment after the date of the modification.
Similarly, in a recent Illinois case, Ross v. May Company d/b/a Marshall Field’s and Co.,
377 Ill.App.3d 387 (2007), the Illinois Appellate Court reversed a lower court decision to dismiss
the plaintiff’s breach of contract claim against his employer. The plaintiff claimed that he was
unfairly terminated when his employer failed to follow the terms set forth in a 1968 employee
handbook, which the plaintiff claimed created an implied-in-fact employment contract. The
lower court dismissed the case, finding that disclaimers contained in revised editions of the
employee handbook served to invalidate the employee’s previously existing employment contract.
The Illinois Appellate Court, however, ruled that the defendant acted unilaterally, not in a
bargained-for exchange, when it revised the handbook and that no consideration flowed from the
defendant to the plaintiff to compensate him for relinquishing the protections he enjoyed under
the 1968 handbook. Under these circumstances, the court found that there was no consideration
for the unilateral modification of the handbook.
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Other courts look to whether the employer reserved the right to unilaterally modify the
employment handbook. For example, in Helland v. Kurtis A. Froedtert Memorial Lutheran
Hospital, 601 N.W.2d 318 (Wis. Ct. App. 1999), the court held that because the employer
reserved the right to unilaterally modify policies and procedures, the employee could not assert
that a contractual relationship existed. In addition, the court held that the employee could not have
reasonably relied on the employer’s handbook because the handbook declared that it was a
“working guide,” provided that it was not a replacement for the employer’s policies, used
language such as “may result,” stated that the standards of conduct were not all-encompassing,
and stated that the employer “reserve[d] the right to take necessary and reasonable action,
including discharge.”
Another requirement some courts consider in order for handbook modifications to be valid
is that the employer provides the employees with notice of any modifications to the employee
handbook. Fleming v. Borden, 450 S.E.2d 589 (S.C. 1994). In Fleming, the court held that an
employer has the right to unilaterally modify an existing employee handbook to return
employees’ status to employment “at-will” only if the employer gives actual notice of the
modification to the employees.
Finally, some courts require that an employer’s modifications satisfy the requirements of a
valid contact in order to be valid. In Chambers v. Valley National Bank, 721 F.Supp. 1128 (D.
Ariz. 1988), the court held that any modification or termination of an existing employee
handbook will only be effective if all the requirements for a contract are met. Therefore, a
subsequent modification is characterized as an offer for modification, which the employee must
accept by continuing employment.
DRAFTING AN EMPLOYEE HANDBOOK
Employee handbooks can be an excellent way to communicate the company’s policies and
expectations to employees. However, awkwardly drafted employee handbooks can lead to
lawsuits alleging breach of contract. Therefore, when drafting employee handbooks, some general
guidelines should be followed, and employers should have a draft of the handbook reviewed by
an attorney familiar with the employment laws of their state before distributing the final draft of
the handbook to employees.
Consider:
•
Including a disclaimer in a prominent position (page 1) in the handbook which states
that the handbook does not create any type of contractual relationship between the
employer and employee, and that the employee is an “at-will” employee who may be
terminated at any time, with or without notice, and for any reason. The disclaimer
should also state that the employer “reserves the right to modify, change or eliminate
any policy contained in the handbook with or without notice.”
•
Having the printed language of the disclaimer in a larger
underlined, highlighted, and/or in CAPITAL LETTERS.
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font, bolded, italicized,
•
Having the employee sign a written acknowledgment that includes disclaimer
language verifying receipt of the handbook, which will be retained by the employer.
•
Drafting procedural policies (such as discipline and termination policies) using
discretionary terms such as “the employer may” or “might” or “could”, rather than
affirmative terms like “will” or “shall.” The reason for the use of permissive language
is so that the employer is not a victim of its own policy statement in situations where
policies are not followed to the letter.
•
Providing a grievance procedure. However, use permissive language such as “the
employer may investigate grievances in the following manner...” Additionally, state at
the beginning of the grievance procedure that “this procedure does not change the ‘atwill’ nature of the employment relationship.”
•
Including a statement or provision stating that the employee agrees to all of the terms
and/or conditions, which the employer shall decide to implement through a unilateral
modification of the handbook.
•
Following the procedures as specified in the manual.
•
Keeping detailed records for all procedural matters (i.e. hiring, leaves, promotion,
discipline, reviews, termination, etc.)
•
Including a policy statement indicating that you are an equal opportunity employer and
that you do not discriminate on the basis of race, color, religion, national origin, sex,
disability, or other prohibited basis. However, if you are a religious entity, after
consultation with your attorney, you may decide to omit “religion” as a part of the
nondiscriminatory practices.
•
Including a policy prohibiting sexual harassment, in addition to all other forms of
harassment, which clearly indicates that employees are encouraged to report claims of
harassment, and that such claims will be promptly and thoroughly investigated, and
instances of harassment will be punished with disciplinary measures including
termination.
•
Including language in your harassment and discrimination policies stating that
retaliation for reporting harassment and discrimination is prohibited, but indicating
that individuals who intentionally make false report of harassment or discrimination
may be disciplined, up to and including termination of employment.
•
Broadly disseminating policies that are meant for management use only.
•
Using exclusive language like “will,” “shall” or “must” when drafting procedures to
be followed.
Avoid:
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•
Using exclusive lists when articulating reasons an employee can be discharged and
state that the list of reasons is “non-inclusive.”
•
Failing to include a clear and prominent disclaimer.
•
Failing to include a provision allowing for the employer’s unilateral modification of
the policies and provisions of the handbook.
•
Allowing supervisors or other personnel to override policies set forth in the handbook.
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EMPLOYMENT LIABILITY INVESTIGATIONS
Conducting a proper investigation into employee complaints regarding workplace conduct
is a critical issue for employers, especially with respect to allegations of sexual harassment.
Supreme Court precedent imposes an affirmative duty on employers to provide an effective
mechanism for reporting and resolving complaints of sexual harassment. Employers also have an
affirmative duty to train their employees regarding what is and what is not appropriate behavior in
the workplace, and to inform employees how they can avail themselves of their employer’s
preventative or remedial apparatus. What this means is that an employer must have a written notolerance policy in place with regard to sexual harassment and also must set forth a complaint and
resolution mechanism. Employers must disseminate this policy to their employees and should
have their employees sign a statement indicating that they have received and read this policy.
The basic tenets of an effective investigation into complaints of sexual harassment can
also be applied to investigations into other improper conduct, such as discrimination on the basis
of race, sex, national origin, age, disability, or other prohibited basis.
Internal investigations are appropriate whenever an employer becomes aware of actual or
potential discrimination through a complaint or through the observations of supervisors or other
persons. A prompt, well-conducted investigation can serve to:
•
avoid or limit the time and expense of responding to subsequent, more formal charges
of harassment or discrimination;
•
limit the employer’s liability for damages that accrue with the passage of time;
•
promote the settlement of disputes on terms more favorable to the employer at a time
when parties are more inclined to do so;
•
help the employer prepare a more effective defense for more formal proceedings,
should they become necessary;
•
place supervisors and employees on notice that the employer will not tolerate unlawful
harassment, discrimination or bias; and
•
encourage employees to bring potentially illegal practices and circumstances to the
employer’s attention.
An investigation is considered to be effective if it:
•
begins promptly after a harassment complaint is brought to the employer’s attention;
•
is conducted by a knowledgeable and objective person;
•
follows specific guidelines;
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•
concludes with a finding as to whether the alleged harassment occurred; and
•
results in an appropriate remedy if one is necessary.
Promptness in commencing an investigation is imperative. Employers should have
procedures in place designed to trigger an investigation as soon as reasonably possible after
information regarding a potential or actual claim is received. Promptness is also helpful in
preserving witnesses’ memories of the events.
Thoroughness is another key element of an effective investigation. A thorough
investigation is one that:
•
protects the complaining employee from retaliation for filing the complaint;
•
includes interviews with all parties and all other persons having information about the
alleged harassment;
•
adheres to a predictable schedule;
•
keeps information as confidential as possible;
•
ends with a finding of whether or not the harassment occurred, with an explanation;
and
•
recommends further corrective action to end or deter harassment.
An investigation should be as lengthy as necessary to determine whether the complainedof conduct actually occurred. This length of time may vary from case to case.
EMPLOYER’S DUTY TO INVESTIGATE
An employer has a duty to investigate workplace harassment claims whenever it learns
that harassment may have occurred. The importance of this duty cannot be overstated.
An employer should not wait for a formal complaint to be filed if it has witnessed
behavior it suspects is inappropriate and warrants further investigation. Enforcement agencies
such as the EEOC assume that once an employer knows that harassment may have occurred, it
has legal notice of possible illegal conduct and is therefore under a duty to investigate. If an
employer fails to conduct an investigation after being made aware of the possible harassment, the
EEOC and/or courts may conclude that the employer tacitly approved of or tolerated the conduct.
Launching an investigation is the most significant immediate measure an employer can take in
response to a complaint. An investigation can also be a powerful factor in deterring future
harassment, as it puts all employees on notice that the employer takes such allegations seriously
and will not tolerate harassment in the workplace.
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Even if an employee requests that the employer not investigate, the employer should
assume it has a duty to investigate for several reasons:
(1) an employer is liable for harassment when it knew or should have known of the
harassment;
(2) the burden is on the employer, not the employee, to remedy the situation; and
(3) it is the employer’s duty to create a harassment-free work environment for the benefit
of all employees.
Depending on the allegations, an effective investigation may help an employer avoid
liability for workplace harassment. An effective investigation is a valid defense against a charge
of hostile work environment harassment when the employer takes corrective action based on the
results of its investigation. On the other hand, the adequacy of an investigation will have no effect
on liability for quid pro quo harassment by a supervisor, since in that situation, an employer is
considered responsible for the harassment whether or not it had actual knowledge of it.
Harassment is the only type of discrimination carried out by a supervisor for which an
employer can avoid liability. However, the employer will be shielded from liability for
harassment by a supervisor only if it proves that it exercised reasonable care in preventing or
correcting the harassment and that the employee unreasonably failed to avoid all the harm. This
means that the employer has disseminated its no-tolerance sexual harassment policy to all
employees, but the complaining employee failed to avail him or herself of the complaint
mechanism. However, if both parties exercise reasonable care, the defense will fail. In some
cases, the employer will be unable to avoid liability completely, but may be able to establish the
affirmative defense as a means of limiting damages.
HOW SHOULD AN EMPLOYER PLAN AN INVESTIGATION?
Before launching an investigation, the employer must appoint an investigator and plan an
effective investigation.
Designating an Investigator
Designating an investigator may be the most important part of the investigation process.
This person must be able to approach the case objectively and must not have a stake in the
outcome of the investigation.
Persons who would be considered appropriate investigators include:
•
Members of the employer’s Human Resources department;
•
In-house attorneys;
•
Line managers;
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•
Members of the internal audit, ethics or security department;
•
Private investigators or outside consultants; or
•
Regular or special outside counsel.
Characteristics of an appropriate investigator include:
•
Competent and able to understand the purpose of the investigation;
•
Knowledgeable of company policies, procedures, practices, and rules;
•
Skilled in conducting interviews;
•
Able to develop a rapport with the persons being interviewed;
•
Credible and objective;
•
Able to take notes well;
•
Able to maintain some degree of confidentiality;
•
Able to instill confidence in and work with participants of the investigation; and
•
Able to keep an open mind and not draw conclusions based on incomplete facts.
When selecting an attorney to conduct an investigation, the employer must carefully
weigh this decision. On one hand, an attorney knowledgeable in this area of the law and in
investigatory techniques provides the benefit of professional expertise. However, under the Code
of Professional Responsibility, the attorney who conducts the internal investigation, and possibly
his or her entire firm, may be disqualified from representing that employer in a lawsuit
concerning that investigation, especially where it is obvious that the attorney will become a
witness on a substantive issue material in subsequent litigation. In addition, the attorney-client
and work-product privileges may be waived by counsel’s participation in or supervision of the
investigation.
Planning a Reasonable and Effective Investigation
To be most effective, an investigator should prepare a written investigative plan that
identifies the issues and sources of evidence and information needed to resolve them. The plan
should include an outline of key questions regarding:
•
•
The facts necessary to establish unlawful discrimination;
The identity of witnesses with knowledge of the facts, the sources of information that
bear on the facts, and the credibility of other witnesses; and
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•
The existence of documentary or other physical evidence that bears on the facts.
The plan should also be designed to take into account:
•
The need to exhaust readily available sources of documentary and testimonial
evidence before interviewing third parties;
•
The need to minimize the influencing of crucial testimony by witnesses who have
already testified; and
•
The need to accommodate the work schedules of witnesses who may have out-of-town
assignments, vacations or plans to resign or retire.
Confidentiality
During the investigative process, employers should assure employees that the
investigation will be kept as confidential as possible; however, employers should not promise
complete confidentiality, as this is often impossible. Nonetheless, the assurance that the employer
will maintain some degree of confidentiality enables the employer to obtain the cooperation of the
participants more easily and increases their confidence in the fairness of the investigation.
However, this does not equate to complete secrecy because at a minimum, the accuser and the
accused will have to be told what each other said.
Keeping the contents and/or results of the investigation confidential is also an additional
protection against a claim of libel or defamation in connection with the investigation. An accused
harasser who has been exonerated of harassment could have a cause of action for libel or
defamation if the investigation results are improperly publicized beyond those persons with a
legitimate need to know.
Avoid any e-mail regarding the investigation or its results and make sure that only other
employees with a “need to know” are informed of the investigation and/or decision. Employers
can also insulate themselves against potential defamation claims by ensuring that sexual
harassment policies contain a statement or caveat that the employer will take steps to repair the
reputation of any employee falsely accused of harassment.
CONDUCTING AN INVESTIGATION
Fact-Finding
Facts to be sought during an investigation include:
•
When and where the incidents occurred;
•
How the incident came to the employer’s attention;
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•
The identity of the alleged harasser;
•
The work history of the complaining employee, the accused harasser, and key
witnesses;
•
The reporting, work, and personal relationships of the parties and witnesses;
•
The context of each incident and what was said and done;
•
What occurred to suggest that the conduct was welcome or unwelcome;
•
Identity of witnesses to each incident and whether the witnesses have relevant
information;
•
The chronology of the alleged misconduct or other key events such as discipline or
change in supervision;
•
Whether the incident was isolated or part of a pattern of misconduct;
•
The effect of the incident on the complaining employee;
•
Whether the employee complained previously about the conduct;
•
Whether there is any documentation of the incident, such as calendars, diaries, notes or
tape recordings;
•
Whether the complaining employee knows of other persons who were subjected to
inappropriate conduct; and
•
Whether other employees have complained about the accused harasser.
Documents to Procure
The investigator should obtain documentary evidence from the appropriate departments or
offices of the employer, which should include:
•
Employee personnel files;
•
Employee performance appraisals; and
•
Employee handbooks/policy manuals.
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Interviewing Parties and Witnesses
Interviews are the second most important part of the investigation process. Interviews
should include one-on-one sessions with the complaining employee, the alleged harasser, and
other persons who may have information relevant to the claim. Prior to interviewing parties and
witnesses, the investigator should review applicable laws, policies, and guidelines and should
understand what facts need to be gleaned in order to reach a suitable conclusion. The investigator
should have a detailed outline of key questions to ask during the interview and be prepared to
improvise as necessary. The investigator also should explain to every party and witness
interviewed:
•
The purpose of the interview and underlying investigation;
•
The investigator’s relationship to the employer and the witness;
•
The confidentiality of the matters discussed;
•
The seriousness of the investigation;
•
The consequences for those who do not cooperate;
•
The importance of accurate information;
•
The obligation of the person being interviewed to provide truthful and complete
information;
•
The necessity for the information to remain confidential; and
•
That no adverse action will be taken against those who cooperate with the
investigation.
Interviewing Techniques
An investigator should employ the following techniques in conducting interviews to
ascertain facts:
•
Thank the participants for their time and cooperation.
•
Use neutral terms such as “possible misconduct,” “workplace problems,” and
“possible rule violations,” rather than judgmental terms such as “harassment” or
“victim.”
•
Questions should be designed to elicit specific facts regarding the alleged incident
without suggesting particular responses, identifying sources or leads or disclosing
investigative strategies.
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•
Convey that the employer wants its investigation to be effective, without promising
specific results.
•
Take contemporaneous notes not only about the content of the witnesses’ accounts, but
also their demeanor.
•
Consider recording the interviews, with the consent of the person being interviewed;
however, be aware that this could have a chilling effect on the employee’s responses.
•
Note observable facts about the witnesses’ demeanor and behavior.
•
If the interview is being memorialized via written notes, ask the witness to review the
notes and sign them to indicate that the notes accurately depict the witness’s
recollection.
•
Request clarification when needed.
•
Anticipate questions about the next steps in the investigation.
•
Explain that no conclusions will be drawn until the investigation is completed.
The complaining employee should be the first person interviewed. When interviewing the
complaining employee, the investigator should assure the employee that:
•
The employer will not retaliate against him or her for making a good-faith complaint
of harassment under the company’s procedure or in a government agency or court.
•
Information obtained during the interview and investigation will remain confidential
and only be shared with the complaining employee, the alleged harasser and others
with a need to know.
The investigator should obtain the following information from the complaining employee:
•
Complete list of acts and statements the employee claims to constitute harassment.
•
His/her response to each act or statement.
•
The date he/she learned of the harassment policy or complaint procedure.
•
To whom he/she first reported the offensive incident or statement.
•
Whether he/she did anything to let the alleged harasser know that the conduct was
unwelcome.
•
Whether this was an isolated incident or part of a pattern or history.
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•
Whether he/she is aware of the accused harasser targeting other employees.
•
Whether the employee has spoken with anyone else about the alleged conduct.
•
How the alleged conduct affected him/her, including work habits, physical problems,
depression, anxiety, etc.
•
The demeanor of the employee and his/her emotional state.
•
Whether there are any witnesses to any of the incidents.
The alleged harasser should be interviewed after the complaining employee. When
interviewing the alleged harasser:
•
First, confront the alleged harasser with the general allegations and observe and note
his/her response to the allegations, such as his/her demeanor and whether he/she
knows the identity of the accuser without being told.
•
Identify each allegedly improper act or statement and give the alleged harasser an
opportunity to respond.
•
Determine the extent and nature of his/her interactions with the complaining
employee.
•
Ask for any facts suggesting that other persons had a motive to fabricate the
accusations.
•
Provide the alleged harasser an opportunity to provide any alibis or mitigating
circumstances.
•
Ask the alleged harasser to identify all persons who should be interviewed as part of
the investigation and what relevant information each person is likely to have; no
character witnesses should be included, only other witnesses who have firsthand
knowledge of facts relating to the alleged conduct.
•
Ask the alleged harasser to provide all relevant documents and other evidence.
•
Ask the alleged harasser what steps should be taken to ensure a thorough investigation.
•
If alleged harasser makes a blanket denial:
o explore ill-motives: “Why would he/she make this up?”
o uncover new issues; for example, if the alleged harasser was recently given a
poor performance evaluation
o make a mental note of credibility
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•
If the alleged harasser refuses to cooperate:
o explain your obligation to investigate and that it is in his/her best interest to
cooperate
o explain that the investigation will proceed anyway and that unwillingness to
cooperate will be a factor in your decision
•
In the event that the accused wants to confront his/her accuser:
o tell him/her that if they have questions, he/she should provide them to you and
you will present them to the accused
After the complaining employee and the alleged harasser have been interviewed, the next
interviews should be with anyone who may have relevant information, such as any individuals
identified by the complaining employee and the accused harasser.
Credibility
One of the most critical aspects of interviewing parties and witnesses is assessing their
credibility. The EEOC has set out five factors to be considered in making credibility
determinations:
•
Inherent plausibility: Is the testimony believable on its face and does it make sense?
•
Demeanor: Did the person seem to be telling the truth or lying?
•
Motive to falsify: Did the person have a reason to lie?
•
Corroboration: Is there witness testimony available that corroborates the parties’
testimony?
•
Past record: Did the alleged harasser have a history of similar behavior in the past?
CONCLUDING AN INVESTIGATION: THE INVESTIGATIVE FILE AND REPORT
Documentation
An employer will have an easier time defending the results of the investigation if it
adequately documents the entire process. This means keeping contemporaneous notes of witness
interviews and reviewing notes for accuracy after each interview. By doing so, a written record
will be in place establishing why the employer drew its factual conclusions. Having a written
record also preserves witnesses’ recollections before their memories fade.
Investigation of a workplace harassment complaint should conclude with a report to top
management containing the investigator’s findings, some factual background on the incident that
gave rise to the complaint, and the relevant documentation that was gathered during the
investigation.
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Contents of the report should be reviewed with human resources and management
representatives before being put into final form. Most importantly, the report should state
whether there was a finding of harassment and explain why or why not. If the investigator was
unable to make a determination of the truth or falsity of the allegations, the report should also
indicate this.
This investigative report is the employer’s first line of defense against allegations that it
conducted an ineffective investigation or that the findings did not justify the proposed remedy.
The report should thoroughly document the history of the case and all relevant findings,
including:
•
The complaint or event that prompted the investigation;
•
The issues that were investigated;
•
The factual findings regarding each issue;
•
The dates of each of the interviews and all other investigatory steps taken;
•
Critical information obtained from each interview;
•
Relevant policies and other evidence;
•
Injuries suffered by the complaining employee;
•
Any actions taken in response to the complaint; and
•
Recommendations to prevent a recurrence of the alleged misconduct.
When drawing conclusions from the investigations, certain facts should be considered,
including:
•
Evaluation of the credibility of each witness;
•
What factual conclusions can be drawn and why;
•
What factual issues remain unresolved and why;
•
Whether a judgment can be made about whether a violation of a company policy
occurred;
•
What has the company done in the past to remedy similar violations; and
•
The extent to which the investigator’s qualifications to make a legal decision are
limited by education or experience.
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For example, an investigative report may provide a legally acceptable basis for
discharging the alleged harasser; however, the investigator’s summary conclusions alone are not a
valid basis for discharging an alleged harasser when the credibility of a witness is in doubt.
Instead, the actual decision-maker reading the report should read the actual interview notes,
declarations or other statements and documents before deciding whom to believe.
Should the investigation conclude that the harassment did not occur and that the
complaining employee filed a false report, the decision-maker should also consider the following:
•
The distinction between an honest difference in interpretation, which may be protected
by federal and/or state law, and a deliberately dishonest allegation;
•
The nature of the conduct, the context in which the alleged conduct occurred, the
frequency of the conduct, the severity and pervasiveness of the conduct, whether it
was physically threatening or humiliating, whether it was unwelcome, and whether it
unreasonably interfered with the employee’s work performance; and
•
The appropriate level of discipline to be applied for types of dishonest conduct similar
to that of the complaining employee.
Ultimately, whatever decision is made, the decision-maker should ensure that the parties
are notified of the decision-maker’s conclusions, reiterate to the parties the company’s
commitment to being an equal opportunity employer, ensure that the persons adversely affected
by the company’s actions based on the investigation have an opportunity to respond, and advise
the parties that retaliation against the complaining employee will not be tolerated.
Corrective Action
Once an employer has concluded the investigation and prepared a report, it must take
action that is reasonably calculated to end any harassment found in the report, prevent
harassment from recurring, and restore job opportunities or benefits that were denied to
the victim(s) of the harassment.
Employers should be aware that corrective action may even be appropriate before the
investigation is concluded. Supervisors should immediately warn the alleged offender that his/her
conduct may be sexual harassment and, if possible, separate the alleged harasser from the
complaining employee so their contact is minimized. This may mean that the accused wrongdoer
is placed on either a paid or unpaid suspension pending the investigation. It should be kept in
mind, however, that the degree of separation imposed must be commensurate with the severity of
the alleged harassment and weight of evidence provided in support of the complaint. The
employer has broad discretion in choosing how to minimize contact between the two employees,
so long as the accuser is not moved to an objectively less-desirable position. If the complaining
employee is being transferred, the transfer should be to a position of equivalent pay, seniority or
other benefits, so as to not be seen as retaliation for filing a complaint. Also, the position should
not be a less-desirable one, such as one with a longer commute.
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If harassment is found to have occurred, disciplinary remedies may include termination of
the harasser, unless there are mitigating circumstances, or issuing a strong written warning to the
harasser, emphasizing that he/she used poor judgment and may be discharged if the conduct
occurs again.
Factors to be considered in applying discipline include:
•
The severity and frequency of the misconduct;
•
Whether the harasser had prior notice of the employer’s harassment policy or was
issued warnings after prior behavior;
•
The effectiveness of prior corrective action;
•
Whether the harasser is apologetic or defiant;
•
The harasser’s past employment records;
•
Collective bargaining agreement requirements;
•
The employer’s past practice in imposing discipline for similar violations; and
•
Whether the discipline complies with policies concerning progressive discipline or
written employment agreements.
If the harassment has not occurred or if the employer reasonably concludes that a
disciplinary action less severe than discharge is appropriate, the employer may:
•
Issue a written memorandum to the participants in the investigation explaining that it
was unable to determine whether any unlawful action occurred, but restating its policy
against workplace harassment, or
•
Transfer one or both of the persons involved to a different job or facility, so long as
the complaining employee is not being transferred in retaliation for the complaint.
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Appendix
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EMPLOYMENT POLICIES AND FORMS
Because an employer has an affirmative duty to advise all employees of its sexual
harassment policy, it is recommended that the policy be given to each employee and a separate
acknowledgement form be signed by the employee and maintained in the employee’s personnel
file. The policy should be distributed annually, with an acknowledgement form signed and kept
in each individual employee’s personnel file.
SEXUAL HARASSMENT POLICY FOR
EDUCATIONAL ORGANIZATIONS
PURPOSE OF THE POLICY
Sexual harassment in the educational environment or the workplace is demeaning to the
person against whom it is directed; it blurs boundaries between professional and personal roles
and destroys the harmonious working and learning environment essential to the continued success
of the employer. Sexual harassment is a breach of the trusting relationship that should exist
between, for example, a professor and student, an employer and employee, or fellow students and
fellow workers. Sexual harassment is also a violation of state and federal law.
STATEMENT OF THE POLICY
It is the policy of the employer that sexual harassment against any student, employee or
applicant for employment will not be tolerated. Violation of this policy may subject the alleged
harasser to disciplinary action by the employer, which may include, but is not limited to,
dismissal. In addition, the alleged harasser may be subjected to lawsuits and/or complaints filed
with state or federal authorities, which may have serious legal and financial consequences.
DEFINITION OF SEXUAL HARASSMENT
Sexual harassment is defined as unwelcome sexual advances, requests for sexual favors or
other harassing conduct when:
•
Submission to the conduct is made either explicitly or implicitly a term or
condition of an individual’s employment or academic advancement;
•
Submission to or rejection of the conduct by an individual is used as the basis for
employment or institutional decisions affecting such individual; or
•
The conduct has the purpose or effect of unreasonably interfering with the
individual’s work or student performance, or creating an intimidating, hostile or
offensive work or learning environment.
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Examples of “other harassing conduct” as used above include the following:
•
Verbal abuse of a sexual nature;
•
Sexually graphic verbal commentaries about an individual’s body;
•
Sexually degrading words used to describe an individual; or
•
The display in work or academic settings of sexually suggestive objects or pictures
which lack literary or artistic value.
PROCEDURAL REMEDY
If you believe that you have been sexually harassed, or if you believe that you have
witnessed behavior prohibited by this policy, you should immediately report the incident to a
company supervisor (unless he/she is the alleged harasser, in which case your report should go to
the Director of Human Resources). Any supervisor, who receives a report of sexual harassment,
whether oral or written, must report it immediately to the Director of Human Resources. Your
complaint will trigger a prompt response in accordance with the procedures outlined below. The
employer will not tolerate retaliation of any sort against an employee for making a good faith
complaint.
FILING A COMPLAINT
After you report an incident of sexual harassment to your supervisor, you may be asked,
but are not required, to complete and sign a written report of the incident.
The Director of Human Resources or his/her delegate will promptly inform the alleged
harasser that a complaint has been filed against him/her.
INFORMAL RESOLUTION
At this point, if you so choose, and if the alleged harasser agrees, the Director of Human
Resources or his/her delegate, in consultation with your supervisor, if appropriate, will attempt
informally to resolve the complaint in a manner acceptable to all parties. If you do not wish to
pursue an informal resolution of your complaint, or if an acceptable resolution cannot be found,
the Director of Human Resources or his/her delegate will begin a formal investigation of the
allegations.
INVESTIGATION AND HEARING
The investigation will, at a minimum, include interviews with all complaining parties,
alleged harassers and witnesses, if any, and will be completed as quickly as practical. The person
officially conducting the investigation will attempt to preserve the confidentiality of all parties
involved, so far as is consistent with a thorough investigation, and will keep you and the alleged
harasser informed of the progress of the investigation.
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Upon the conclusion of the investigation, the Director of Human Resources, in
consultation with the appropriate supervisor, will recommend a course of action. The alleged
harasser will be entitled to the procedural protection afforded by the appropriate Handbook, and
may appeal any disciplinary or punitive action in accord with that Handbook.
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ANTI-HARASSMENT POLICY
All employees have a right to work in an environment free of discrimination, which
includes freedom from any form of harassment based on sex, religion, race, color, age, disability,
national origin, sexual orientation or any other form of discrimination or harassment prohibited by
law.
GENERAL PROHIBITIONS
[Insert company name]
•
•
prohibits:
All verbal or physical conduct of a sexual or otherwise offensive nature in that:
-
Submission to such conduct is made either explicitly or implicitly a
term or condition of employment;
-
Submission to or rejection of such conduct by an individual is used
as the basis for employment decisions affecting the individual; and
-
Such conduct has the purpose or effect of unreasonably creating an
intimidating, hostile or offensive working environment.
Harassment based on sex, religion, race, color, age, disability, national origin or
sexual orientation.
SPECIFIC SEXUAL HARASSMENT PROHIBITIONS
Specifically, no manager or supervisor shall threaten or insinuate, either explicitly or
implicitly, that any employee’s submission to or rejection of sexual advances will in any way
influence any personnel decision regarding that employee’s employment, performance evaluation,
wages, advancement, assigned duties, work hours or any other conditions of employment or
career development.
Other sexually harassing conduct in the workplace, whether physical or verbal, committed
by managers, non-supervisory personnel, vendors or customers is also prohibited. This includes
repeated offensive sexual flirtation, advances, propositions, graphic verbal commentary about the
individual’s body, sexually degrading words to describe an individual, offensive comments, jokes,
innuendos, sexually oriented statements and the display of sexually suggestive objects or pictures
in the workplace.
EMPLOYEES’ RIGHTS AND RESPONSIBILITIES
Employees who have complaints of harassment should promptly report such conduct
directly to Human Resources. The employee also has the option of raising the issue with any
level of management first, and if the employee is dissatisfied with the response, then the issue
should promptly be raised with Human Resources.
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Employees may contact Human Resources by calling the Employee Help Line at: [insert
phone number]
COMPLAINT INVESTIGATIONS
[Insert company name]
will make every effort to strike a balance between the
employee’s desire for confidentiality and the company’s need to conduct a fair and effective
investigation. At the completion of the investigation,
[insert company name] will inform
the complainant of its findings and conclusions. There will be no retaliation against employees
for reporting harassment or assisting [insert company name] in the investigation of a complaint.
MANAGERS’ RESPONSIBILITIES
Managers must notify Humans Resources:
•
When the complainant or any other individual reports or complains about the
harasser’s conduct;
•
When the manager observes or is in a position to observe the conduct; and/or
•
When the manager is alerted to the conduct (for example, if the conduct was
discussed in the presence of the manager).
When managers become aware of a potential violation of this policy, they must contact
Human Resources immediately, and promptly take all steps as directed by Human Resources.
VIOLATIONS OF POLICY
Conduct that violates
[insert company name’s]
Anti-Harassment Policy will
result in corrective action, up to and including termination of employment.
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ANTI-HARASSMENT POLICY AND COMPLAINT PROCEDURE
ACKNOWLEDGEMENT FORM
The undersigned hereby acknowledges receipt of the Sexual Harassment Policy and
Complaint Procedure of [insert company name] and agrees to abide by it as a condition of
employment during his/her employment with [insert company name].
Signed:__________________________________
Print name: ______________________________
Date:____________________________________
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CHARGE NUMBER
COMPLAINANT
RESPONDENT
QUESTIONNAIRE
NOTE THAT LISTS OR SUMMARIES OF DATA REQUESTED MUST BE SUPPORTED BY COPIES
OF UNDERLYING DOCUMENTS WITHOUT EXCEPTION
Where the word “Basis” appears on the attached pages, it refers to the protected group or category of
discrimination. For example, if the charge alleges race discrimination, the “basis” of discrimination is
“race”, and the question asks for the race of the person listed.
1.
State the full legal name and address of Respondent named herein, and describe briefly the type of
work carried on by Respondent at this address.
2.
State the full legal name, title and telephone number of the individual from whom further
information concerning the charge may be obtained.
3.
If Respondent employs 100 or more persons, please attach a copy of the most recent EEO report
for the location in question. If not, state the total number of employees at the location and the
number of employees within Complainant’s position title/job classification. In addition, state the
number of employees within Complainant’s protected group(s), holding that position title/job
classification as of the date of the alleged violation.
4.
In addition to the information requested herein, please provide a written position statement on each
of the allegations of the charge. For each person having direct knowledge of the allegation(s),
provide name, title, and a phone number where the person may be reached for questions. You may
also include any documentary evidence, affidavits, and other written statements, where
appropriate, including any additional information and explanation you deem relevant to the charge.
5.
If Complainant was employed at Respondent, provide the following personnel data on
Complainant:
a.
b.
c.
Date of hire, and name of person who made hiring decision.
Position(s) in which Complainant was employed (If more than one, list each, and the
relevant dates.)
Copies of all other personnel records relevant to the charge, including, but not limited to:
-
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Work quality evaluations.
Work samples.
Attendance records.
Disciplinary records.
Any medical records describing Complainant’s condition, if applicable.
281
CHARGE NUMBER
Page 2
On the Issue of Promotion:
G6.
Supply a detailed explanation of Respondent’s promotion, advancement, and transfer procedures
including, but not limited to:
a.
b.
c.
d.
e.
G7.
Method of posting or announcing available openings.
Procedures whereby an incumbent employee may bid or apply for each opening.
Who is eligible to bid or apply or be considered.
Who selects the employee to be promoted or transferred.
Applicable provisions of any collective bargaining agreements and/or company rules.
(Please attach.)
For the twelve month period preceding the date of the alleged violation, list the vacancies
occurring for the job Complainant sought. For each vacancy, provide:
a.
b.
c.
d.
e.
f.
Name.
Title.
*Basis.
Date on which each initially applied.
Whether selected.
Reason(s) for each selection and non-selection.
G8.
Provide a written job description for the position to which Complainant sought (or was considered
for) promotion. If unavailable, state the basic requirements for the position. Indicate in which
manner Complainant was deficient in meeting such requirements.
G9.
If Complainant has requested, been considered for, or been granted a promotion in the last five
years, for each incident list:
a.
b.
G10.
Dates.
Provide all relevant documents and supportive information.
For each employee Respondent promoted or advanced during the twelve months preceding the
date of the alleged violation, provide:
a.
b.
c.
d.
e.
f.
Name.
*Basis.
Position held/salary.
Position promoted to/salary.
Date of promotion.
Copies of relevant documents and supportive information.
* For an explanation of “Basis”, see page one.
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APPLICATION FOR EMPLOYEES AND VOLUNTEERS
Name: __________________________
Social Security No: __ __ __ - __ __ - __ __ __
Street Address: Apt/Unit No. _______
City: ___________________________
State: _________ Zip Code: _____________
Phone: Home (______) _____________
Phone: Work (_______)_____________ Please list your addresses for the past ten years:
Dates of residence:
_____________________________________________________________
______________________________________________________________________________
Dates of residence:
_____________________________________________________________
______________________________________________________________________________
Dates of residence:
_____________________________________________________________
______________________________________________________________________________
For what position are you applying? ______________________________________________
______________________________________________________________________________
What interests you about the position for which you are currently applying?_____________
______________________________________________________________________________
What has prepared you for the position for which you are currently applying?___________
______________________________________________________________________________
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Employment History
Dates of Employment
(start with most recent)
Company Name
And Address
(City, State, Zip)
Immediate Supervisor
Name and Phone Number
School Name
And Address
(City, State, Zip)
Type of School
Position
Held
Reason for
Leaving Position
Started: ____________
Ended: _____________
Started: ____________
Ended: _____________
Started: ____________
Ended: _____________
Started: ____________
Ended: _____________
Educational History
Dates
(start with most recent)
Started: ____________
Ended: _____________
Started: ____________
Ended: _____________
Started: ____________
Ended: _____________
Started: ____________
Ended: _____________
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Name
of
Program or
Degree
Program
Completed?
Volunteer Experience
Please list your volunteer experiences with other organizations (use back if needed).
Organization
Duties
Dates
Contact
Phone
References
Reference Name
Address
(city, State, Zip)
Daytime
Phone
How long have you
known this person
and
in
what
capacity?
Has this person agreed
to provide a reference?
Professional:
Professional:
Personal:
(Non-Family Member)
Personal History (*WARNING – THIS SECTION IS GOVERNED BY STATE
LAW. Please check your local laws before including in your applications*)
Y
N
Have you ever been convicted of s criminal offense (felony or misdemeanor)? Answer “YES”if you have
entered a plea agreement including a deferred sentence or deferred judgment arrangement in connection
with a criminal case.
Y
N
Have you ever been charged with a sexual offense?
Y
N
Have you ever been charged with a sexual offense relating to children?
Y
N
Have you ever been a defendant in a civil lawsuit alleging sexual misconduct?
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Y
N
Have you ever been reported to any organization or registry for abuse or misconduct involvi8ng children or
adults?
Y
N
Do you have any disciplinary action or investigation pending by an employer, other organization,
professional association, or licensing body for sexual misconduct, or any misconduct involving children?
Y
N
Have you ever been disciplined or dismissed from any volunteer position or employment position following
an allegation of sexual misconduct or other inappropriate behavior?
Y
N
Have you ever been reprimanded or asked to leave or end your membership in a volunteer, civic, or nonprofit organization?
Y
N
Have you ever been the subject of a complaint or disciplinary proceeding brought against any professional
license or professional affiliation held by you?
For any “YES” answers, please explain in detail. Attach a separate sheet of paper if necessary.
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_______________________________________________________________
We appreciate your willingness to share your faith, gifts and skills with the community we serve.
Providing safe and secure programs for our members is of utmost importance to us. The information
gathered in this application is designed to help us provide the highest quality programs for the people of
our community. Please initial each of the statements below.
____
I declare that all statements contained in this application are true and that any misrepresentation or
omission is cause for rejection of my application, or dismissal from my work with
______________________________.
____
I hereby authorize ____________________ to conduct a personal and professional background
check for the purposes of my application at ____________________________________.
____________________________________ may contact any references, past and current
employers, church, youth, organizations, agencies where volunteer service has been completed.
And any individual or organization which might be relevant to my desired position. I hereby
release all of the above stated persons from any and all liability for damages that might occur
during contact with the individuals for purposes of employment or volunteer services.
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____
I also hereby give permission for _____________________ to conduct a criminal background
check, arrest records check, abuse registry check, and driving record check for the purposes of my
employment or volunteer services.
____
I waive any right that I may have to inspect any information provided about me by the persons
previously mentioned. I have also read and understood the above stated information within this
release and am signing below of my own free will.
____
I understand that a criminal background check will be conducted prior to and during my service. I
authorize investigations of all statements contained in this application.
____
I agree to observe all of the guidelines and policies for the program in which I am applying.
____
I understand that ___________________ has a ZERO TOLERANCE FOR ABUSE and takes all
allegations of abuse seriously. I further understand that _________________ cooperates fully with
the authorities to investigate all cases of alleged abuse. Abuse of minors is grounds for immediate
dismissal and possible criminal charges.
____
I declare that I have not perpetrated physical abuse, sexual abuse, emotional abuse, or neglect
against a minor and that I have never been accused of these acts.
____
I understand that I can withdraw from the application process at any time.
____
I understand and agree that false statements and/or omissions regarding past conduct and/or present
situation may be grounds for denial of the application to provide employment and/or volunteer
services and that refusal to inform _____________________________________ of the contents of
a sealed criminal record will result in the automatic denial of the application.
____
My signature indicates that I have read and understand all of the above statements.
Do not sign until you have read and initialed the above statements.
Applicant’s Signature: ______________________________
Date: ___/___/___
I have reviewed this application and have noted any missing information.
Screening Committee Member Signature: ____________________
Date: ___/___/___
SAMPLE
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COMPUTER-USAGE AND SOCIAL MEDIA POLICY
Maintaining the security and confidentiality of information and protecting (INSERT COMPANY
NAME) (also referred to herein as the “COMPANY”) technology is a paramount concern of the
COMPANY. The COMPANY’s concern in this regard is heightened by the various technology
resources provided to its employees to facilitate the creation and communication of businessrelated information in the most effective and efficient manner possible. In light of these concerns,
this Policy has been developed, which establishes the parameters for technology resources usage
and serves to enhance employee awareness of our obligation to hold client information
confidential, and to protect the integrity of the COMPANY’s property and our clients’ interests.
This Policy supplements all existing federal, state, local, laws, regulations, agreements, and
contracts, and any other COMPANY policy, which currently apply to information confidentiality
and technology resources. Users who do not comply with this Policy are subject to discipline,
including, without limitation, revocation of technology usage and, up to and including,
termination.
Scope Of The Policy
This Policy applies to all (INSERT COMPANY NAME) employees and other persons who are
authorized to use the COMPANY’s technology resources, including certain consultants,
contractors, vendors, students, and interns ("users"). This Policy applies to the following forms of
technology resources and the information created by their use, including but not limited to (1)
computers (including desktop, laptops, portable, servers, mainframes, local area networks, wide
area networks, printers, software and removable storage media (e.g., floppy disks, CD-ROMs,
hard disks and tape)); (2) electronic mail ("e-mail"), including attachments; (3) the Internet, (4)
the phone systems, and (5) anything connected to or apart of the COMPANY’s server. The term
“the Company’s Technology Resources” is meant to include any of the aforementioned,
specifically, and any other computer-related or technology-related device that is or may be
owned, rented, or leased by the COMPANY.
THE POLICY
1.
The Company’s Technology Resources May Be Used Only For Legitimate,
Business-Related Reasons.
The COMPANY’s technology resources may be used only for legitimate business-related
reasons.
The COMPANY’s technology resources may not be used to conduct personal business of any
kind, without expressed permission from a supervisor or manager at the Company.
All information that is entered, created, received, stored or transmitted via the COMPANY’s
technology resources, including all e-mail messages, are and will remain the COMPANY’s
property. Such information may neither be used for any purpose unrelated to the COMPANY’s
business nor sold, transmitted, conveyed or communicated in any way to anyone outside of the
COMPANY other than for business-related reasons.
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2.
No Expectation Of Privacy
Users should have no expectation of privacy in connection with the entry, creation, transmission,
receipt, or storage of information via the Company’s technology resources. Users waive any right
to privacy in information entered, created, received, stored or transmitted via the Company’s
technology resources, and consent to access and disclosure of such information by authorized
personnel.
As with all other property, the COMPANY technology resources and all information entered,
created, transmitted, received or stored via our technology resources is subject to inspection,
search and disclosure without advance notice by persons designated or acting at the direction of
the COMPANY or as may be required by law or as necessary to ensure the efficient and proper
administration and operation of our technology resources. For example, authorized persons may
inspect, search and disclose such information to investigate theft, disclosure of confidential
business or proprietary information, personal abuse of the system, or to simply monitor work flow
or productivity. This monitoring and/or search includes, without limitations, the individual hard
drives of any computer owned, leased, rented, or maintained by the COMPANY, any information
stored on any hard drives owned, leased, rented, or maintained by the COMPANY, which may
include emails to or from any COMPANY issued email account, or any personal account that
may be accessed from a the COMPANY computer, any documents drafted on the COMPANY’s
computer, any internet sites accessed, and/or any phone calls made or received from any phone
systems owned, leased, rented, or maintained by the COMPANY, and any messages left on any
phone owned, leased, rented, or maintained by the COMPANY.
Because the COMPANY is sensitive to employee concerns, it will make every effort to ensure
that all such inspections are conducted professionally and ethically. Users, however, must
recognize that authorized persons have the ability to track and monitor all information sent
internally and externally to the COMPANY via technology resources at any time for any reason.
Users should have no expectation of privacy in any of the work that is performed on any
COMPANY computer, with any emails transmitted or received (or accessed) on a COMPANY
computer, any internet site accessed on a COMPANY computer, or with respect to any phone call
received or made to/from any COMPANY phone system, or any messages left on any
COMPANY phone system.
All passwords and security used in connection with the COMPANY technology resources are the
COMPANY’s property and must be available to the COMPANY, upon request, for any reason.
Users should understand that their use of passwords does not preclude authorized persons to
access the COMPANY’s technology resources.
3.
The Creation Or Transmission Of Any Information That May Be Construed To
Violate the COMPANY's Harassment-Free Workplace Policy Or Equal Employment
Opportunity Policy Is Strictly Prohibited
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Users are strictly prohibited from using the COMPANY’s technology resources in any way that
may be offensive to others. This prohibition includes, for example, the transmission of sexually
explicit or obscene messages or cartoons, ethnic or racial slurs, or anything that may be
constructed unlawful harassment or disparagement based on race, color, religion, sex, national
origin, age, disability, ancestry, sexual orientation, marital status, parental status, source of
income, military discharge, or any other status protected by law. Relatedly, users may not use
technology resources to transmit critical or derogatory statements regarding individual employees,
clients, consultants, contractors, vendors, students, volunteers or residents. Users violating these
prohibitions may be subject to disciplinary action, up to and including termination.
4.
Use Of the COMPANY’S Technology Resources Is Subject To the COMPANY's NoSolicitation/No-Distribution Policy
The COMPANY’s policy strictly forbids employees from soliciting, during their working time or
the working time of the employee being solicited, any other employee to support any individual
or organization. It also forbids employees from distributing any literature on behalf of any
individual or organization on COMPANY property. This includes the distribution of chain letters
of all kinds.
5.
Intellectual Property (Copyright And Patent) Laws And Computer Standards
Users may not violate any copyright, patent or other intellectual property law, including restricted
software laws. Accordingly, unless permission has been expressly and officially provided, users
may not post or download any information protected by copyright or patent law. If copyright,
patent or other ownership status is unknown, users may not post, upload, download or otherwise
use any information, content, software or other property and should consult the network
administrator with any inquiries.
6.
Viruses
All COMPANY technology resources must be protected from accidental destruction or deliberate
attempts at sabotage by computer viruses. Users thus may not introduce virus-infected files or
media into the COMPANY’s technology resources. Users must make all reasonable efforts to
ensure that all files accessed or collected are virus-free and should minimize downloading workrelated information unfamiliar from the Internet and via e-mail. Users should use discretion when
receiving e-mail from unknown sources, especially where the e-mail contains attachments. Prior
to placing any file on the COMPANY’s network, users must scan for viruses using up-to-date,
approved virus scanning software.
7.
Confidentiality Information
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Users must take every measure to ensure that confidential COMPANY information, and
information otherwise protected is entered, created, received, stored or transmitted via technology
resources remains confidential and private.
Likewise, users must continue to respect the
confidentiality of any report containing confidential information while handling, storing, and
disposing of these reports in an appropriate manner.
Users are prohibited from searching for using, sending, posting or otherwise disclosing
confidential information or information protected by the attorney-client privilege to any
individual for any non-work or business related reason, without partner permission.
8.
Encryption
To ensure continuous access to technology resources" users shall not use personal hardware or
software to encrypt information entered, created, received, stored or transmitted via technology
resources.
9.
Internet Use
Like all other technology resources, the COMPANY provides Internet access only for legitimate
business-related, education, research, outreach, and administrative purposes. The Internet shall
not be used for any personal use.
10.
Social Media
Social Media includes any website or medium (including video) that allows for the
electronic and digital communications in cyberspace, which includes, but is not limited to,
email, internet, text messaging, Facebook, Twitter, LinkedIn, YouTube, MySpace, Hudl,
Formspring, and blogs. A policy has been developed to protect you and the COMPANY’S
exposure and liability, while also providing you an opportunity to share educational forums
and ideas with others.
The use or accessing of social media at work is not permitted without expressed written
authorization from a supervisor or manager at the COMPANY.
When using social media within a written authorization through the COMPANY, or using
social media outside of working hours on your own time, any use must be consistent with
our mission, purpose, and values. All employees must use social media within the
guidelines set forth in the employee handbook and/or rules of conduct. Violations of the
the policy, no matter how small, can and will be subject to discipline as outlined fully in
the employee handbook.
You are personally responsibility for what you post. Remember that what you post can
often be viewed by both personal and professional contacts. Post responsibly. If you
publish content related to the COMPANY on any non-COMPANY operated or sponsored
site, you must state that “the views on this post are my own and not necessarily those of
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(INSERT COMPANY NAME).
must abide by the following:
11.
Additionally, with all posts on any social media site you
•
Do not publish any confidential or proprietary information on a social site;
•
Do not discuss the COMPANY, the COMPANY employees, vendors, clients, or
other partners of the COMPANY, without written authorization;
•
Do you use insults, obscenity, racial slurs, ethnic slurs, or any other negative
comments that can be construed in any way as discriminatory or harassing;
•
Do not post photographs taken any COMPANY-sponsored events; and
•
Respect all copyright, fair use, and financial disclosure laws;
Violations
Violations of this Policy are subject to discipline as outlined in the employee handbook.
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I, ____________________________________________________________, hereby certify and
declare that I have read (insert COMPANY NAME’S) COMPUTER-USAGE AND
SOCIAL MEDIA POLICY. By executing this document, I am certifying that I understand
the Policy, and all of the terms contained therein, and agree to abide by the terms and
provisions contained within the Policy.
By:
_______________________________________________
Date: _______________________________________________
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