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Art Gutman

Art Gutman

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The case is Karlo v. Pittsburgh Glass Works, a class action ADEA ruling handed down on 1/10/17 [849 F.3d 61]. Pittsburgh Glass Works (the Company) terminated 100 employees across 40 locations in a RIF.  There was no layoff plan.  In the words of Circuit Court Judge Smith, who wrote the ruling:

PGW did not train those directors in how to implement the RIF. Nor did PGW employ any written guidelines or policies, conduct any disparate-impact analysis, review prospective RIF terminees with counsel, or document why any particular employee was selected for inclusion in the RIF.

Though clearly not a good plan for doing a RIF, there is nothing per se illegal about haphazard downsizing.  However, haphazard downsizing becomes difficult to defend when there is adverse impact based on age because it is difficult to prove the statutory defense (Reasonable Factor Other Than Age (or RFOA) when decisions are made in such fashion.  In the present case, the alleged adverse impact was on employees aged 50 and older.  In other words, there was no evidence of adverse impact on employees under 50 and over 40, which is the lower age limit in the ADEA.  The plain fact is, if I was a devious employer, and it was legal to discriminate against employees over 50, I could hide this fact with favorable statistics in the 40 to 49 subgroup that mask the effect on the over 50 subgroup.  However, three circuit courts had previously ruled that such subgroup comparisons are not permitted in the ADEA (more on those cases later).

Indeed, this masking effect was noted by Circuit Court Judge Smith, who wrote:

Disparate-impact claims in ADEA cases ordinarily evaluate the effect of a facially neutral policy on all employees who are at least forty years old—that is, all employees covered by the ADEA. In this case, plaintiffs claim to have identified a policy that disproportionately impacted a subgroup of that population: employees older than fifty. But because the policy favored younger members of the protected class, adding those individuals to the comparison group washes out the statistical evidence of a disparity.

Enough teasing.  In the words of Judge Smith:

The question in this case is whether a disparate-impact claim is cognizable where a “subgroup” of employees at the upper end of that range—in this case, employees aged fifty and older—were alleged to have been disfavored relative to younger employees.

In other words, the subgroup comparison would involve comparing those that are 50 and over to those that are 39 and under regardless of how the 40 to 49 age subgroup is treated.  Judge Smith’s answer to the question was that the “ADEA prohibits disparate impact based on age, not forty-and-older identity.”

The bottom line is that Judge Smith ruled that subgroup adverse impact claims are cognizable under the ADEA, thus overturning the district court ruling, which favored the company.  Judge Smith’s ruling was based on two prior Supreme Court precedents: O’Connor v. Consolidated Coin Caterers (1996) [517 U.S. 308], an ADEA disparate treatment case, and Connecticut v. Teal (1982) [457 U.S. 440], a Title VII race-based adverse impact claim.  Both proved decisive in this case, particularly as compared to the three prior rulings in other circuits that found that such subgroup adverse impact claims are not cognizable under the ADEA.

In O’Connor, the lower courts denied a discriminatory discharge claim by a 56-year-old who was replaced by a 40-year-old because the latter was also within the protected class. Speaking for a unanimous Supreme Court, Justice Scalia ruled that the key to the presumption of age discrimination is whether “a replacement is substantially younger than the plaintiff.”  In other words, it would be more probative of age discrimination if a 50-year-old was replaced by a 40-year-old, both of whom are protected by the ADEA, than if a 42-year-old was replaced by a 38-year-old, only one of whom is protected by the ADEA.

In Teal, a written test was the first hurdle in a multiple hurdle selection procedure.  There was adverse impact based on the test alone, but when the process was completed, a higher percentage of blacks than whites were promoted (at the bottom line).  A 5-4 majority of the Supreme Court ruled that Title VII protects individuals, not the class as a whole.  Therefore, regardless of how the class as a whole fares on the bottom line, the individuals impacted by the first hurdle are protected as individuals.

Judge Smith applied the same reasoning to the present case, ruling:

The Supreme Court rejected this so-called “bottom-line” defense and held that the purpose of Title VII “is the protection of the individual employee, rather than the protection of the minority group as a whole.” …… “[F]avorable treatment of . . . members of these respondents’ racial group” did not justify discrimination against other members of the protected class. …..  (“Title VII operates not primarily to the benefit of racial or minority groups, but to ensure that individual applicants receive the consideration they are due . . . .”).

Now, considering the three prior cases, Judge Smith rejected two of them on grounds that they occurred before the O’Connor ruling in 1996 (Lowe v. Commack, (1989 CA2) [886 F.2d 1364] & Smith v. Tennessee Valley Authority (1991 CA6) [924 F.2d 1059].  Thus, these rulings were made before Justice Scalia’s proclamation that the key factor in age discrimination is age itself rather than the line drawn between under and over 40 years of age.  Or in Judge Smith’s words:

The forty-and-older line established 29 U.S.C.S. § 631(a) does not convert age into a binary trait. By its own terms, it imposes a limitation on the individuals covered by the prohibitions in this chapter, 29 U.S.C.S. § 631(a). It simply establishes the age at which ADEA protection begins. The appropriate disparate-impact statistics should be guided by the trait protected by the statute, not the population of employees inside or outside the statute’s general scope.

Lastly, the third case did occur after O’Connor (EEOC v. McDonnel Douglas (1999 CA80 [191 F.3d 948]) but, to use Judge Smith’s words, “The Eighth Circuit’s analysis is also unpersuasive because it contradicts Teal and ignores important limitations on the scope of disparate-impact claims”.  Basically, the 8th Circuit ruled that:

[A] plaintiff could bring a disparate-impact claim despite the fact that the statistical evidence indicated that an employer’s RIF criteria had a very favorable impact upon the entire protected group of employees aged 40 and older, compared to those employees outside the protected group. We do not believe that Congress could have intended such a result.

In what I think is a brilliant extension of Teal, Judge Smith likened the entire over 40 group to the bottom line comparison in Teal and the 50 and over subgroup comparison to the first hurdle in Teal.  Or in Judge Smith’s words:

This is no more than an endorsement of the bottom-line defense that the Supreme Court rejected in Teal. The State of Connecticut tried a similar argument by suggesting that black employees were favored for promotions as an overall class. But that bottom-line outcome concealed individual rights violations. Far from being a result “Congress could [not] have intended,” the Supreme Court’s ruling in Teal vindicated Title VII’s plain text and purpose. The same applies to the ADEA.

In summary, I think the Judge Smith’s ruling is elegant in combining a landmark ADEA disparate treatment case with a landmark Title VII adverse impact case to establish what is an entirely new precedent in ADEA case law — that subgroup comparisons are ripe for ADEA adverse impact claims.  It doesn’t affect subgroup comparisons in Title VII adverse impact cases because the protected classes are of the binary (or at least discrete) whereas age is continuous (and don’t I know it!).

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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The case is Evans v. Georgia Regional Hospital decided on 3/10/17 [2017 U.S. App. LEXIS 4301].  Three things make this case special.  First, it’s a 2-1 opinion that is likely to lead to an en banc ruling by all available 11th Circuit judges.  Second, the majority ruling specifies that Title VII does not cover discrimination based on sexual orientation.  However, the majority in this case left the door open for the plaintiff (Jameka Evans) to state a claim based on “failing to comport with her employer’s stereotyped view of women.”  Third, and perhaps most important, since no federal circuit court as yet has ruled that Title VII prohibits sex discrimination based on sexual orientation, is that, given the split decision in this case and ruling in other circuit courts, the Evans case might set the stage for a Supreme Court review on the relationship between sexual orientation and stereotype views of men and women.

The facts of the case are that Evans, who was a hospital security officer a little over a year, left the job claiming unequal pay for equal work, harassment, and physical assault and battery.  She claimed sex discrimination for “failing to carry herself in a traditional womanly manner.”  The district court granted summary judgement favoring the hospital but the majority opinion of the 11th Circuit was sort of yes and no.  The majority opinion, authored by Judge Martinez, was essentially that gender “non-conformity” is actionable under Title VII, but that discrimination based on sexual orientation does automatically imply discrimination based on gender non-conformity.  Or in Judge Martinez’s words:

Even though we hold, infra, that discrimination based on gender non-conformity is actionable, Evans’s pro se complaint nevertheless failed to plead facts sufficient to create a plausible inference that she suffered discrimination. ….. In other words, Evans did not provide enough factual matter to plausibly suggest that her decision to present herself in a masculine manner led to the alleged adverse employment actions. Therefore, while a dismissal of Evan’s gender non-conformity claim would have been appropriate on this basis, these circumstances entitle Evans an opportunity to amend her complaint one time unless doing so would be futile.

Thus, the majority opinion left open the opportunity for Evans to provide evidence that she was discriminated against because of gender non-conformity.

From a case law prospective, the interesting issue in Martinez’s ruling was that it is based on a 1970 case in which the 5th Circuit ruled that sexual orientation is not protected under Title VII (Blum v. Gulf Oil Corp. [431 F.2d 409].  The more recent push by the EEOC into this arena is based primarily on the Supreme Court’s ruling in Price Waterhouse v. Hopkins (1989) [490 US 228], which is much more recent precedent than Blum, and which clearly supports the issue that gender stereotyping is prohibited under Title VII.

The dissenting judge (Rosenbaum) argued that Blum is not an appropriate precedent in view of the Hopkins ruling.  He also cited a more recent 11th Circuit ruling in which a lower court ruling was overturned based on the employer’s mistreatment of a transgender woman appearing in women’s clothing (Glenn v. Sewell R. Bumby (2011) [663 F.3d 1312].  Judge Rosenbaum opined that it is “utter fiction” that Evans was not discriminated against for “failing to comport with her employer’s stereotyped view of women.”  In other words, his view is that discrimination based on sexual orientation is tantamount to discrimination against non-conformity to traditional views of males and females.

There’s a lot to this case and I recommend it as a great read.  For our purposes, it moves the issue closer in time to a potential Supreme Court ruling.  Other circuit courts are now deciding similar cases.  All it takes is for two of them to clash.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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22 March 2017

The case is McKeny v. Middleton, decided on 3/16/17 in the Southern District of Ohio [2017 U.S. Dist. LEXIS 37912].  Timothy McKeny, an assistant professor in the Department of Teacher Education at Ohio University, was denied tenure by Dean Middleton on April 1, 2012 and the decision was ultimately upheld by the (University) President McDavis on November 26, 2013.  McKeny filed a lawsuit with the EEOC claiming discrimination based on sexual orientation.  Did he have a case?  We’ll never know.

Here’s what happened. McKeny filed two claims, one under Title VII, which has a 300-day statute of limitations in deferral states such as Ohio, and one under Section 1983, which has a two-year statute of limitations in Ohio.  McKeny filed the Title VII claim with the EEOC on August 14, 2014, a year and half after Dean Middleton’s decision, and the Section 1983 claim on December 18, 2014, more than two years after Dean Middleton’s decision. Here is the sequence of events.

McKeny was denied tenure by Dean Middleton on April 1, 2012 despite a favorable recommendation from his department. Middleton criticized McKeny’s scholarship primarily for lacking publications in peer-reviewed journals. McKeny’s mistake was that he could have filed both claims at this point and still initiated a series of internal appeals.  Instead, he filed both charges after the respective limitation dates, assuming that the clock started after his appeals were denied, rather than when Dean Middleton’s April 1, 2012 decision was announced.  As a result, the university was granted summary judgment on both the Title VII and Section 1983 claims.

McKeny’s first appeal was directly to Dean Middleton, who denied the appeal on June 8, 2012 (68 days have passed since April 1, 2012).  He then appealed to the provost (Benoit) arguing that Dean Middleton failed to give his application adequate consideration and due process.  Provost Benoit denied the appeal on October 2, 2012 on the same grounds cited by Dean Middleton (184 days have passed).

McKeny continued his battle appealing to the Standing Committee on Promotion and Tenure of the Faculty Senate. The Committee supported McKeny citing “a ‘bewildering disconnect’ between the recommendation of the departmental committee and Dean Middleton’s decision in terms of their respective expectations for scholarship”.  The Committee’s decision was made on December 2, 2012 (246 days have passed).  The ball was then back in Dean Middleton’s court and she again denied the appeal on January 28, 2013 (304 days have passed).  At this point, McKeny is beyond the 300-day limitation for Title VII.  McKeny did not stop. He next appealed to the university president (McDavis), who denied the appeal on November 26, 2014.  At this point, McKeny’s time has run out on the Section 1983 claim.

The reasons for starting the clock at April 1, 2012 are based on the faculty handbook, which states that the decision to deny tenure begins at the point of the dean’s decision.  That said, any claims against the dean or provost would be time barred.  However, there would be a fresh clock if there was proof that President McDavis knew of McKeny’s sexual orientation and acted with discriminatory animus. The court ruled, however, there was no evidence that McDavis knew of McKeny’s sexual orientation and, therefore, could not have acted with discriminatory animus.

There is no indication in the court ruling as to whether McKeny’s claim had any merit.  We know from the court ruling that President McDavis could not have acted with discriminatory animus because he had no knowledge of his sexual orientation.  Therefore, McKeny’s only route to victory would have been with proof that either (or both) the dean and the provost knew of his sexual orientation and that such knowledge could be connected to denial of tenure and promotion.  McKeny never raised the issue of animus against any of the principals.

I have one further observation. I would have thought the actual deadline date for Title VII was day 240.  In the landmark Supreme Court ruling in Mohasco v. Silver (1980) [447 US 807], Silver filed charges with the EEOC 291 days after receiving a termination notice (he claimed discrimination based on religion). Since Silver worked in a deferral state, the EEOC deferred to the state agency and re-claimed the case on day 357. The Supreme Court ruled that the 300-day statute of limitations expired before the claim was officially filed with the EEOC and Mohasco lost his right to sue.  By my calculation, under Mohasco, McKeny lost his right to sue after the faculty senate’s ruling on December 2, 2012 at which point 246 days had passed.  Of course, this issue is moot because McKeny’s EEOC filing was itself beyond day 300.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology



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In researching Judge Gorsuch’s record, I found 13 relevant employment discrimination cases[1].  By my count, 9 were favorable to employers and four were fully or partially favorable to employees.  Sizing up a potential justice is, of course, more than a matter of wins and losses by employers and employees.  The key ingredient in any case are its facts.  I will briefly review the facts in each case and reach a conclusion (hang loose).

Cases Favorable to Defendants

1. Hwang v. Kansas State University (2014) [753 F.3d 1159]

This is a Rehabilitation Act case in which an associate professor claimed disability discrimination because the university refused to extend her sick leave beyond six months after she was diagnosed with cancer.  The university contended that Hwang was unable to perform the essential functions of her job and it was unreasonable to hold the job open for more than six months.  Hwang’s disparate treatment argument was that similarly situated non-disabled faculty were better treated than she was, to which Gorsuch opined that she was not similarly situated to those on sabbatical because of factors such as tenure or seniority.

2. Myers v. Knight Protective Service (2014) [774 F.3d 1246]

This was primarily an ADA case which also included a failed Title VII race claim.  On the ADA claim, Myers had previously filed for Social Security Disability (SSDI) and the question in this case was whether that filing and the ADA claim were contradictory.  The Supreme Court addressed the relationship between SSDI and ADA claims in Cleveland v. Policy Management Systems (1999) [526 U.S. 795] and ruled that the SSDI claim does not automatically preclude the ADA claim because the ADA has a reasonable accommodation requirement and SSDI does not.  However, there is a burden on the employee to explain why the SSDI claim does not negate the ADA claim.  Stated differently, a person claiming total disability has to at least facially show that there are accommodations that would permit performance of essential job functions.  In this case, Gorsuch ruled that Myers failed to provide a sufficient explanation for the apparent contradiction on his written employment application and his SSDI claim regarding his physical condition.  Myers had undergone a number of back and neck surgeries and on his application offered that he was not in pain and was feeling ok.  This was in direct contraction to observations by his supervisors that he was in pain and was not suitable to be an armed guard, and he could not go back to work without passing a physical exam.

3. Roberts v. IBM (2013) [733 F.3d 1306]

This is an age discrimination (ADEA) case involving termination. Roberts presented evidence from instant messages between two human resources managers mentioning his “shelf life.”  Roberts presented it as direct “smoking gun” evidence of age discrimination, but IBM countered the phrase was nothing more than reference to his queue of billable work. Gorsuch ruled that Roberts failed to prove that the explanation offered was a pretext for discrimination.

4. Elwell v. Oklahoma Board of Regents (2012) [693 F.3d 1303]

The plaintiff in this case claimed failure to reasonably accommodate her disability and wrongful termination.  The problem was she used Title II of the ADA, not Title I.  Title I applies to employment, whereas Title II applies to services, programs, or activities of a public entity.  The ruling here (as in all other courts in such cases) is failure to state a claim because the wrong statue was used.  Thus, the plaintiff’s claim was decided on a technicality (albeit and important one), not on merits.

5. Almond v. Unified School District (2011) [665 F.3d 1174]

This case also involved some technicalities.  Two employees that learned their jobs were being eliminated were offered demotions with pay reductions.  They argued that age discrimination and not budget cuts was the cause of the demotions.  This one lost on a technicality because the ADEA claim was made past the 300-day statute of limitations.  The lesson here is that they should have filed the ADEA claim when notified, not later on when demoted.  The plaintiffs also had an Equal Pay Act (EPA) Claim, and although this one was not time barred, Gorsuch ruled that they had never claimed unequal pay for equal work.  He further noted that the plaintiffs may have been discriminated against in the transfer decision but they were not discriminated against in compensation. Thus, one claim failed on technical grounds and the other because the EPA is only concerned with unequal pay for equal work.

6. Johnson v. Weld County, Colorado (2010) [594 F.3d 1202]

This case is a combination Title VII and ADA case that has implications for both statutes.  A female passed over for the position of fiscal officer in favor of a male claimed she was denied the job because of her sex and because she had multiple sclerosis.  The sex discrimination claim failed because the male candidate had stronger credentials (education, experience, etc.).  The ADA claim failed because the plaintiff claimed to be highly competent, and she failed to prove her muscular sclerosis substantially limited her ability to work.  In other words, she was deemed not disabled within the meaning of the ADA.

7. Hinds v. Sprint United Management (2008) [523 F.3d 1187]

This case involved a claim of age discrimination and retaliation after the plaintiff was terminated in a layoff.  Hinds claimed that the managers responsible for the layoff used subjective decision making and a spreadsheet in which the ages of the employees were in hidden cells.  Gorsuch ruled that even if the decision makers knew the ages of the various employees, the facts failed to support a theory of age discrimination.  Gorsuch also ruled that Hinds failed to establish a prima facie case of retaliation.

8. Montes et al v. Vail Clinic (2007) [497 F.3d 1160]

The claim in this case was Title VII hostile work environment and national origin discrimination by eight former employees.  The work itself was housekeeping.  Five of the plaintiffs could not establish the timeliness of their claims (beyond 300-day statute of limitations).  For the remaining plaintiffs, the complaint was that additional work requirement and Speak-English-Only rules established a hostile working environment.  The work requirement was rejected by Gorsuch on grounds that the employer was short staffed and needed additional work time from all of its employees, not just those who are Hispanic.  The Speak-English-Only rule was supported on grounds that it was narrow (not at all times) and job related.

9. Young v. Dillon Companies (2006) [468 F.3d 1243]

The most important claim in this case was that Young, a retail investigator, suffered racial discrimination in termination.  This ruling was pretty simple.  Young stole time by leaving work early without reducing his time.  The reason given for termination was accepted by Gorsuch; that Young committed a termination worthy offense.  Young could not mount a pretext argument and lost.  Other charges (inconsistency with the parties’ implied contract terms and of the doctrine of promissory estoppel) were dismissed.

Cases Favorable to Plaintiffs

1. Walton v. Powell (2016) [821 F.3d 1204]

This case involved a 1st Amendment retaliation claim against a newly elected public official who claimed  qualified immunity for dismissing an employee from the prior administration.  The facts are that Powell, a democrat, won an election and Walton a Republican, was terminated.  Prior to the election, the outgoing Republican appointed Walton to a senior level civil service job which, by state law, should have protected her from termination for political reasons. The lower court denied summary judgement for the defense and Gorsuch affirmed.  Walton presented evidence that political affiliation was the reason she was dismissed, and according to Gorsuch, supported that her conduct was a matter of public concern and that political affiliation was a substantial or motivating factor in her dismissal.  Because Walton established her 1st Amendment rights, the claim of qualified immunity was defeated.  Stated differently, although public officials have qualified immunity for discretionary acts, they come to court as ordinary citizens when the claim is employment discrimination (see Hafer v. Melo (1991) [502 U.S. 21]

2. Barrett v. Salt Lake County (2014) [754 F.3d 864]

Although Gorsuch did not cite it, this case is like the Supreme Court ruling in Crawford v. Metro (2009) [555 U.S. 271] in which the termination of an employee for helping a co-worker who testified on behalf of another employee on a harassment charge was unlawfully terminated.  The circumstances in this case were analogous to those in Crawford in that Barrett also helped a coworker pursue her sexual harassment claim.  Gorsuch ruled it is a “rational” inference that unlawful retaliation took place.  I find it interesting that Crawford was not cited.  Nevertheless, the opinion is clearly consistent with that ruling.

3. Orr v. City of Albuquerque (2008) [531 F.3d 1210]

This is a classic example of pretext.  Female police officers that took maternity leave were negatively affected in terms of eligibility for early retirement.  The City argued it was pursuing a uniform policy applicable to all employees.  The plaintiffs claimed they were forced to use sick leave whereas other (non-pregnant) employees were permitted to use vacation for leave under the Family Medical Leave Act (FMLA) and compensatory time.  This rendered the “uniform policy” defense a pretext.

4. Williams v. W.D. Sports (2007) [497 F.3d 1079]

In this case, female employees of a hockey team claimed sex discrimination and harassment.  There were 30 rulings in this case, but only one of them, an important one, favored the plaintiffs.  The claim was retaliation against an employee who applied for unemployment benefits.  The ruling favoring the employee was based on threats by the employer to oppose her claim for the benefits.  Although she had no support for her contention that benefits were withheld, Gorsuch ruled that the threat itself was sufficient to dissuade a reasonable employee from filing a Title VII claim.


There are probably other cases that may be worth reviewing.  But, NLRA cases aside, these were the only ones involving traditional employment discrimination claims.  What do the facts in these cases say for what to expect from Gorsuch when he ascents to the Supreme Court (I highly doubt he won’t be confirmed)?  To me it looks like he’s a stickler for the letter of the law.  In other words, he impresses me as being much like Scalia was, and how Alito and Thomas continue to be.

[1] I also found some National Labor Relation (NLRA) cases but for purposes of exposition, I will focus on the more standard employment cases (e.g., Title VII, ADA, ADEA, retaliation, etc.).

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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Mandatory agreement to binding arbitration of employment disputes as a condition of employment was upheld under the Federal Arbitration Act of 1925 (FAA) in Gilmer v. Interstate/Johnson Lane Corporation (1991) [500 U.S. 20] in a case in which two stockbrokers claimed age discrimination.  Individual arbitration is not at issue here.  What is at issue is whether the same mandatory agreements can legally preclude class action lawsuits by employees.  In a recent case (American Expressway Company v. Italian Colors Restaurant (2013) [133 S. Ct. 2304], the Supreme Court ruled the FAA applies to merchants held to mandatory prohibition of class actions against credit card companies in spite of the Sherman Antitrust Act (1890).  The latter ruling, though, does not necessarily apply to more traditional workplace class actions by employees.  This issue represents a battle between the FAA on one hand and the National Labor Relations Board’s (NLRB) interpretation of the National Labor Relations Act (1935) (NLRA) on the other.  The NLRB position is that mandatory arbitration agreements precluding class action lawsuits by employees illegally interfere with “employee rights to engage in concerted activity for their mutual aid or protection.”

The NLRB asked the Supreme Court to consider the issue in light of the 5th Circuit’s ruling in NLRB v. Murphy Oil USA, Inc. (2015) [ 808 F.3d 1013] that rejected the NLRB’s position. Similar rejections have also made by the 2nd and 8th Circuits, while rulings favoring the NLRB position have been made by the 7th Circuit (Epic Systems Corp. v. Lewis (2016) [823 F.3d 1147]) and 9th Circuit (Ernst & Young, LLP v. Morris (2016) [834 F.3d 975]).

The Supreme Court has agreed to combine the Murphy Oil, Epic Systems, and Ernst & Young cases for review, and the outcome will, I believe, have major implications relating to collective actions by employees regardless of whether they have signed away their individual right to seek redress in federal district court. I don’t often do this, but I think the NLRB position will win because it’s connection to labor is more critical and direct than the FAA which, originally, was written to apply maritime transactions.  Prior attempts to defeat FAA mandatory agreements have not faced stiff opposition from the NLRB.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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This case, decided on 12/28/16 by the 1st Circuit Court, was (at least to me) at first blush, uninspiring. After reading the case, I believe it has the likelihood of setting a very important precedent regarding the third phase (or prong) in adverse impact case law.

Let us first talk about the facts of the case. From 1999 to 2006 the police department (hereafter ‘Department’) used hair analysis to assess whether police officers (or applicants) were using drugs such as cocaine, marijuana, opiates, PCP, or amphetamines. The results were negative for 99% of white individuals and 98% black individuals. As a result, nine of the black individuals lost a job or job offer, and one was placed on unpaid suspension and potential reinstatement for agreeing to participate in a drug rehabilitation program in which there was random urinalysis testing. Make note of this point — it is a key to the case.

The district court granted summary judgment based on the 99 vs. 98 percent difference using the 4/5th rule from the Uniform Guidelines on Employee Selection Procedures (UGESP). The 1st Circuit rejected this logic and found there was a statistically significant difference between the two groups (not a first — see for example Bew v. City of Chicago, 2001 [252 F.3d. 891]. Obviously there continues to be an interesting practical versus statistical significance debate here, but that is another conversation for another day.

Upon initial remand, the district court again ruled for summary judgment upon remand to determine if the hair test was job related and consistent with a business necessity and, if so, there were equally valid alternatives with less adverse impact. The 1st Circuit upheld the second phase job relatedness ruling, but remanded again on the issue of alternatives. The reasoning was relatively simple — the extremely high percentages of true positives for both groups. However, the 1st circuit reversed on the issue of alternatives, and here is where it gets interesting.

The 1st Circuit laid out three questions for a successful phase 3 (alternatives) argument as follows:

  •  First, does the record contain evidence that would allow a jury to find that there was an “alternative” method of meeting the Department’s legitimate needs?
  • Second, does the record also allow a jury to find that adopting that alternative method would have had less of a disparate impact?
  • And finally, could a jury find that the Department “refuses to adopt” that alternative method? We consider each question in turn.

It is how the 1st Circuit analyzed the “refusal to adopt” question (from the UGESP) that is most interesting.

The alternative proposed was a follow-up urinalysis for those testing positive. The logic behind this alternative is that the hair analysis cannot distinguish between drugs that are ingested versus drugs that are present because of exposure. The claim is that for exposure, drugs are more likely to adhere to hairs of black as opposed to white individual. That answered the first of the three questions.

The ruling on the second question followed from the ruling on the first question. If, indeed, there was a greater chance of exposure for black individuals, then, by definition, the hair test would be a false positive and would reduce and, if so, would reduce adverse impact.

This leaves the third and most interesting question relating to “refusal to adopt.” The 1st Circuit, correctly I think, examined the expert opinions for admissions of drug use (rehabilitation and random testing) and reasoned that since it involves random urinalysis testing, then the Department obviously knew about it. There are other issues in this case. But for now, the ultimate ruling (drum roll please) is up to a jury to decide whether there was intent to not use urinalysis.

To sum it all up, the 1st Circuit answered the first and second question in the affirmative (for the plaintiffs). However, it punted ruling on “refusal to adopt” to the district court. That court can make, in my opinion, one of two rulings on this issue. First, that it is simply sufficient for the defendant to know about the alternative and not use it. The second more difficult ruling would be to have to prove motive (active refusal to use). This, I think, would require proof of an attempt to request the employer to use the alternative coupled with a refusal before litigating the issue. The latter would make it more difficult to make the alternatives argument, but not impossible. Guess we’ll have to wait for the remand ruling.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology



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This is the first of two Alerts.  Part I below discusses EEOC v. Scott Medical Health Center [2016 U.S. Dist. LEXIS 153744], decided on November 4, 2016 by Judge Cathy Bisoon of the Western District of Pennsylvania.  The Scott ruling is summarized here.  Part II puts the Scott ruling into the broader historical context of cases involving sexual orientation claims in Title VII.

The allegations in Scott are that Dale Baxley, an openly gay male, was sexually harassed and constructively discharged by his supervisor, Robert McClendon.  The defendant filed a motion to dismiss, claiming (in addition to procedural issues) that Title VII does not protect discrimination based on sexual orientation.  This motion was denied, and the reasons offered by Judge Bisoon represent, I think, a major victory for the EEOC’s most recent push into why it considers discrimination based on sexual orientation a violation of Title VII.

There are three key reference cases.  The first is Justice Scalia’s ruling in Oncale v. Sundowner (1998) [53 U.S. 75] that same-sex harassment violates Title VII only if the harassment is “because of sex.”  The EEOC made a three-part argument to support its belief that discrimination based on sexual orientation is discrimination because of sex. First, the EEOC argued that Baxley was targeted because he is a male; had he been intimately involved with a woman, he would not have been targeted.  Second, the EEOC argued that Baxley was targeted because of his intimate relations with individuals of the same sex, which necessarily brings Baxley’s sex into account.  Third, the EEOC argued that Baxley was targeted because he did not conform to stereotypical beliefs regarding how men should behave.

Judge Bisoon treated these as a single argument, ruling:

The Court views this as the same argument articulated in three different ways, with the singular question being whether, but for Mr. Baxley’s sex, would he have been subjected to this discrimination or harassment. The answer, based on these allegations, is no.

The second important reference case is Price Waterhouse v. Hopkins (1988) [490 U.S. 228], a sex discrimination in promotion case in which Ann Hopkins, who was denied promotion to partner at Price Waterhouse, presented evidence that she was the subject of derogatory sexual stereotypes based on how the decision-making partners believe women in the workplace should act. The partners were on record for having made numerous derogatory remarks (e.g., she is macho, is overcompensating for being a woman, she should go to charm school, she needs to work more femininely, and many more).  Using this case as a reference, Judge Bisoon ruled:

There is no more obvious form of sex stereotyping than making a determination that a person should conform to heterosexuality. As the EEOC states, “[d]iscriminating against a person because of the sex of that person’s romantic partner necessarily involves stereotypes about ‘proper’ roles in sexual relationships — that men are and should only be sexually attracted to women, not men.” This discriminatory evil is more than reasonably comparable to the evil identified by the Supreme Court in Price Waterhouse. Indeed, the Court finds discrimination on the basis of sexual orientation is, at its very core, sex stereotyping plain and simple; there is no line separating the two.

In other words, conforming to heterosexual norms is as stereotypical as the views that were espoused by the partners at Price Waterhouse.

The third important reference case is Bibby v. Philadelphia Coca-Cola Bottling Co. [260 F.2d 237 (CA3 2001] in which Bibby, an openly gay male, was subjected to name calling and physical assault.  The 3rd Circuit (the relevant one for the Scott case) ruled there was no sexual component to the assault and that Bibby “did not make any argument that sexual orientation discrimination is sex stereotyping.” At the time, the EEOC put forth the same three reasons as in Scott, to no avail.

However, Judge Bisoon used the very reasoning the 3rd Circuit used against Bibby in favor of Baxley; that a charge of sexual stereotyping was made by the EEOC in Scott case, but not Bibby, and that this is a critical difference between the two cases.  Judge Bisoon added two additional considerations.  The first is that Bibby relied on the then proposed Employment Non-Discrimination Act (ENDA) which had been poorly received in Congress.  Judge Bisoon ruled that reliance on “Congressional inaction” is inappropriate and did not relate to arguments about sex stereotyping.  Second, and perhaps more interesting, Judge Bisoon cited the Supreme Court’s recent ruling on gay marriage (Obergefell v. Hodges [135 S.Ct. 2071 (2015)], echoing the Supreme Court’s ruling regarding “new insights and societal understandings …. within our most fundamental institutions.”  Ultimately, Judge Bisoon ruled:

That someone can be subjected to a barrage of insults, humiliation, hostility and/or changes to the terms and conditions of their employment, based upon nothing more than the aggressor’s view of what it means to be a man or a woman, is exactly the evil Title VII was designed to eradicate. Because this Court concludes that discrimination on the basis of sexual orientation is a subset of sexual stereotyping and thus covered by Title VII’s prohibitions on discrimination “because of sex,” Defendant’s Motion to Dismiss on the ground that the EEOC’s Complaint fails to state a claim for which relief can be granted will be denied.

End of Part I —- stay tuned for Part II.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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The case is Villarreal v. R.J. Reynolds [2016 U.S. App. LEXIS 18074] decided on October 5, 2016 in an 8 to 3 en banc ruling by the 11th Circuit.  At issue was an advertisement by the defendant for recent college graduates.  Richard Villarreal, the plaintiff, was 49 years old when he filed his first claim against R.J. Reynolds, and he has filed several subsequent claims, each on other occasions in which he applied for a job and was not hired.  The district court granted summary judgment to the defendant and Villarreal won an initial appeal to a 3-judge panel of the 11th Circuit.  However, the 3-judge panel ruling was overturned 8-3 in a subsequent en banc ruling.  The en banc ruling means (1) applicants and employees may use disparate treatment theory in ADEA claims; (2) employees may use adverse impact in ADEA claims; but (3) applicants are prohibited from using adverse impact theory in ADEA claims.

This ruling is based on a literal reading of ADEA statutory language.  Specifically, Section 4(a)(2), 29 U.S.C. § 623(a)(2) of the statute makes it unlawful for an employer:

to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.”

The key terms here are “adversely affect”, which implies adverse impact but not disparate treatment and “employee”, the literal meaning of which excludes applicants.

Paying deference to the EEOC, the 3-judge panel ruled that despite the omission of applicant in the targeted statutory language, the EEOC had “reasonably and consistently” interpreted the statute to permit adverse impact claims by applicants, and that doing so was in keeping with the objectives of the statute.

However, eight members of the en banc panel disagreed with the 3-judge panel and reinstated the district court ruling that the plain language in the statute does not cover applicants for employment.  The majority emphasized that deference to EEOC interpretations are improper and in direct contradiction to plain statutory language, and that is “our job is to follow the text even if doing so will supposedly undercut a basic objective of the statute.”

We will have to stay tuned to see how other circuit courts weigh in on these issues.  I think the issues merit Supreme Court review, but more than one circuit court ruling is generally needed to get one.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology


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In Camp v. Bi-Lo, decided October 21, 2016 [2016 U.S. App. LEXIS 19053] by the 6th Circuit, Kenneth Camp worked for Bi-Lo as a grocery stocker for 38 years even though he had a bad back (due to scoliosis) the entire time.  He worked the night shift with two other stockers, and there was an informal arrangement with his co-workers that they help him with extremely heavy packages.  One night, the stocking work was not completed because of the help required by Camp and he was ordered by Bi-Lo to have a medical exam.  He was placed on light duty pending the outcome of the exam.  The doctor concluded that Camp can lift 10 pounds all the time, 35 pounds frequently, but never more than 35 pounds.  Bi-Lo altered the existing job description to include lifting 60 pounds as an essential job function.  Thus, the major question in this case is whether lifting 60 pounds is essential to the job of stocker and, if so, how to prove it.

A second question deals with age discrimination.  Based upon the doctor’s report, Camp was told to use up his sick leave days as doing so would allow him to receive his salary until he turned 62 and was eligible for Social Security payments.  This prompted Camp to also file an age discrimination (ADEA) charge.

The district court granted summary judgement to Bi-Lo on both charges, and a 2-1 majority of the 6th Circuit overturned both rulings.  The age question is of interest, to be sure.  It is questionable whether an employer can legally use age as a basis for deciding the time frame with respect to light duty assignment and use of sick leave time.  That said, my major concern is with the ADA ruling because, if left to stand, it would permit an employer to define itself out of the ADA by claiming marginal functions are essential functions as a pretext for disability discrimination.

A key to this case was the testimony of Bi-Lo’s human resources specialist Ray Kessler.  Kesller admitted he relied chiefly on the written job description (with the 60 pound requirement) and never discussed the issue with Camp or any of his co-workers.  For their part, two co-workers testified that they had never seen the at-issue job description.  They (and others) also testified that lifting more than 35 pounds was not an essential requirement for the job.  Therefore, the majority Judges (Merritt and Kethledge) ruled:

“There is no evidence in the record of what the job description was for “stock clerk” in 1974 when Camp was first hired. Camp and his two coworkers on the third shift testified that they had never seen a job description for stock clerk before this litigation. It appears that Bi-Lo looked only to the job description to render its opinion that heavy lifting was an “essential function” of the stock clerk position.”

The majority also ruled that even if lifting 60 pounds was essential to the job, Bi-Lo failed to consider reasonable accommodations both generally, and in the form in which Camp’s co-workers had help him over the years.

The dissenting judge (Rogers) opined that allowing co-workers to informally cover for Camp does not justify “forcing an employer to continue such an accommodation” once the disability “is found to interfere with operations.”

To me, the moral of the story is that whether a requirement is essential is question of fact open to assessment via job analysis.  Employers need to be careful to ensure that they are not treating marginal job duties as being essential.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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In a recent Alert, I discussed the OFCCP’s filing of a law suit with the Office of ALJs against Palo Alto company Palantir, a technology company.  The claim is that Palantir discriminated systematically against Asian job applicants in hiring in comparison to Non-Asian applicants for three positions.  The gist of that alert is that we had seen this before in relation to OFCCP v. Jeanswear Limited.  Alerts on that case were written by myself (8/7/13) and Jana Garman and David Cohen (9/4/13).  The ALJ in that case (Kevin A. Krantz) ruled against the OFCCP on grounds that it is not Kosher to compare a single group to the aggregate of several other groups to form an adverse impact claim.  We stand strongly behind that view.

However, at the same time, I feel it is necessary to understand that one of the ingredients in the Jeanswear case, namely word-of-mouth referral (and walk-in hiring) deserves additional attention.  Recall that in Jeanswear, the claim was that non-Asians fared worse than Asians because of word-of-mouth referral.  Specifically, the claim was as follows:

a. Applicants referred by employees were given priority in selection for interviews;

b. Asian employees were much more likely to use the referral system;

c. Asian employees made the most referrals; and

d. Asian employees were highly likely to refer Asian applicants when making referrals.

In other words, in this case, it was Asians who were deemed advantaged and non-Asians deemed disadvantaged (the opposite of Palantir).

The word-of-mouth issue was not directly addressed in either of the cases.  I am not suggesting that such a case would work in either Jeanswear or Palantir, but rather, it is an issue that can easily entrap small to medium sized companies that rely on word-of-mouth recruitment.  It’s been awhile since an enforcement agency actually filed a word-of-mouth claim (see EEOC v. ACM), but the EEOC has a long history of opposing word-of-mouth recruitment when it occurs in a company with a homogeneous population.  For example, in its questions and answers on race discrimination the EEOC says the following about word-of-mouth referrals:

  • Word-of-mouth employee referrals- Word-of-mouth recruitment is the practice of using current employees to spread information concerning job vacancies to their family, friends, and acquaintances. Unless the workforce is racially and ethnically diverse, exclusive reliance on word-of-mouth should be avoided because it is likely to create a barrier to equal employment opportunity for racial or ethnic groups that are not already represented in the employer’s workforce.

The EEOC also states that “Employers should attempt to recruit from racially diverse sources in order to obtain a racially diverse applicant pool.”

There may or may not be merit to the word-of-mouth claim in either Jeanswear or Palantir, but there were critical cases on word-of-mouth recruitment in the late 1980s and mid 1990s[1].  For example, in 1991, World’s Finest Chocolate entered into a 2-million-dollar settlement with the EEOC six days after President Bush signed the Civil Rights Act of 1991 into law.  The company was predominantly white male, and it stayed that way because of the combination of word-of-mouth recruitment and walk-in hiring.

There are other cases, but they fit the same mold.  The point is there are two ways to get in trouble here.  First, to rely entirely on word-of-mouth recruitment absent any attempts to ensure racial and gender diversity in applications is problematic if a small or medium sized company has a homogeneous workforce.  Second, if there is both word-of-mouth and other standard means of referral, as suggested in the allegations in Jeanswear, a viable adverse impact claim could arise if word-of-mouth referred applicants are favored over the other applicants.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

[1] In fact, word-of-mouth recruitment and walk-in hiring were two of the four alleged sources of discrimination in Wards Cove v. Atonio (1989), the landmark Supreme Court case that fueled the Civil Rights Act of 1991 (the other two being nepotism and subjective decision making).

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Really, I Come Here for the Food: Sex as a BFOQ for Restaurant Servers

Michael Aamodt, Principal Consultant at DCI Consulting Group, wrote an article featured in SIOP’s TIP publication, January 2017.

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