Sunday, January 7, 2018

EEOC v. Maryland Insurance Administration: Does the application of the Equal Pay Act to states violate constitutional principles of federalism?

EEOC v. Maryland Insurance Administration, No. 16-2408 (4th Cir. Jan. 5, 2018), which looks at whether a state agency violated the Equal Pay Act, would be unremarkable were it not for the dissent of Judge J. Harvie Wilkinson. His major beef has less to do with the particulars of this case than with whether the application of the Equal Pay Act to states violates constitutional principals of federalism -- the sharing of power between the states and the federal government: "Ours is a federal system of government. It was carefully designed to strike a balance between the need for enumerated federal authority and respect for the residual sovereignty of the states."

Pursuant to the Tenth Amendment, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people." In National League of Cities v. Usery, 426 U.S. 833 (1976), a slim 5-4 majority of the Supreme Court relied on the Tenth Amendment to rule that application of the Fair Labor Standards Act to regulate traditional state functions, such as fire prevention, police protection, sanitation, public health, and parks and recreation, was unconstitutional. Only nine years later, however, in Garcia v. San Antonio Transit Authority, 469 U.S. 528 (1985), an equally slim 5-4 majority overruled Usery, concluding that its government functions test was "impracticable and doctrinally barren."

As noted by Wilkinson in his dissent in Maryland Insurance Administration, although Garcia rejected Usery's bright-line test, the Supreme Court has continued to rely on federalism principles, in part, to reject particular examples of "federal overreach," such as the regulation of purely intrastate violence. Wilkinson stops short of suggesting that the federal government has no business correcting sex-based pay discrimination in state employment, but he urges that an EPA claim against a state require clear and convincing evidence of a violation, rather than a mere preponderance of the evidence: "This clear and convincing standard is a workable approach that would serve to screen out deprivations of state sovereignty for trivial purposes, while leaving serious problems open to the corrective of federal law. Steering this middle course would restore for state governments in this narrow and discrete area of paramount state interest some of the constitutional protection of which they have been inexcusably deprived."

In discussing the parties' respective burdens of proof, Wilkinson appears, however, to make a significant error. Under the Equal Pay Act, a claimant alleging a violation is merely required to show that she is being paid less than a man in the same job. An employer can then avoid liability if it can establish an affirmative defense, namely that the pay discrepancy was based on some factor other than sex. Wilkinson explains: "[W]hile the burden to establish an affirmative defense rests with the one raising it, the ultimate burden of proof almost always rests with 'the party seeking relief.'" Here, Wilkinson appears to mischaracterize the nature of the affirmative defense under the Equal Pay Act. Unlike Title VII of the Civil Rights Act, under which a claimant has the burden to show that she was subjected to intentional discrimination based on sex, the Equal Pay Act places the burden on the employer to show that a pay discrepancy was not based on sex discrimination. Contrary to Wilkinson's suggestion, requiring a claimant to prove her case by clear and convincing evidence would not merely subject her to a higher standard of proof, it would also shift the burden of proof to her to show that the employer's reason for the pay discrepancy was sex-based, rather than merely that she was paid less than a man in the same job. Although such a heightened standard might be justifiable, it is a much more significant change than Wilkinson lets on.

Wilkinson's call for courts to take up the mantle of state sovereignty can also be faulted as inconsistent with principles of judicial restraint. In Garcia, the Supreme Court trusted in the democratic process to ensure a proper balance between federal and state authority: "[T]he principal and basic limit on the federal commerce power is that inherent in all congressional action -- the built-in restraints that our system provides through state participation in federal governmental action. The political process ensures that laws that unduly burden the States will not be promulgated." By contrast, when it comes to individual rights, Wilkinson has been all too willing to leave matters to the will of the majority. For instance, prior to the Supreme Court's recognition of the constitutional right to same-sex marriage, Wilkinson argued that the matter should be left to the normal democratic process. Of course, on the opposite side of the political spectrum, liberal judges can also be charged with inconsistency -- faulting courts for overriding federal legislation that impinges on state sovereignty while invalidating legislation that impinges on individual rights. 

Still, nobody's perfect. And according to F. Scott Fitzgerald, "The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function." 

If so, I prefer the second-rate intelligence of Justice Anthony Kennedy, who has joined conservative Justices in protecting states against federal overreach and joined liberal Justices in protecting individuals against the tyranny of the majority. Sadly, Justice Kennedy is likely to retire soon.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.

Tuesday, January 2, 2018

Transgender Employees and Customer Preference: Oral Sex, Korean Body Scrubs, and Sex-Segregated Bathrooms

Professor Eugene Volokh has a post on the Volokh Conspiracy that raises a "thought experiment" about transgender employees. First, he asks whether a gay man who visits a brothel for oral sex (in a jurisdiction where prostitution is lawful) can insist that the prostitute have a penis. And if so, in what other situations should an employer be permitted to determine a transgender individual's sex from the customer's perspective?

Volokh concludes, and I agree, that if a customer is hiring a prostitute, then the brothel should be free to accommodate the customer's view of whether the prostitute is male or female. Even if the prostitute views himself as male, that's not good enough when the customer is paying for someone to provide him with sexual gratification, which obviously turns on the customer's viewpoint.

By extension, I think the same applies to situations in which a customer's bodily privacy is at issue. For instance, if you visit a Korean spa, you may decide to get a body scrub, which is provided while you are completely naked. A man can certainly scrub a naked woman's body, and a woman can scrub a naked man's body. However, social norms about bodily privacy dictate that male employees provide services to naked male customers, and female employees to naked female customers. As with the prostitution example, it is the customer's interests that dictate the appropriate sex of the worker, so if a customer's viewpoint controls the determination of whether an employee is male or female in the prostitution example, it also should control the determination of whether an employee is male or female in the body scrub example.

Still, although bodily privacy interests may be implicated even when no one is nude, such cases might be distinguishable. In particular, given the evolution in mainstream thought about sexual modesty, sex-segregated bathrooms may continue to exist not because of any significant bodily privacy interests but only because of custom. If so, there may be little basis for allowing bathroom users' interests in bodily privacy to outweigh the interests of transgender individuals in using the bathrooms they are most comfortable with. 

Of course, even if a transgender woman with male genitalia should not be barred from the women's room, barring her anyway is not necessarily a form of sex discrimination (see this prior post).

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.

Thursday, December 28, 2017

EEOC v. Jetstream Ground Services: When is a plaintiff entitled to a presumption regarding an employer's destruction of evidence even though it was not in bad faith?

In EEOC v. Jetstream Ground Services, No. 17-1003 (10th Cir. Dec. 28, 2017), the issue presented was whether the jury, which had ruled for the defendant, should have been instructed that records improperly destroyed by the defendant in violation of an EEOC recordkeeping regulation would have bolstered the EEOC's case. In rejecting the EEOC's appeal, the court concluded that, although circuit precedent strongly suggested that a violation of the EEOC regulation, even if not in bad faith, creates a presumption that the factfinder should be informed about, this case was distinguishable for two reasons. First, the EEOC's proposed instruction would have established an irrebuttable presumption. And second, the defendant had presented evidence rebutting the presumption. Relying on the Federal Rules of Evidence, the court reasoned that the burden of proof as to the presumption remains with the plaintiff, so the defendant can rebut the presumption by merely producing evidence contradicting the presumption and need not prove the opposite of the presumed fact. Since the defendant had produced such evidence, there was no longer any basis for the presumption, and it would have been improper for the jury instruction to have mentioned it.

I don't know enough about this area of the law to have an opinion as to whether the court's decision is correct. Still, I wouldn't expect the EEOC to be too happy. The court significantly diminishes the potential benefit that a plaintiff can get from any presumption created by an employer's recordkeeping violation, assuming it was not in bad faith. If the EEOC seeks rehearing, I would expect it to be on this issue.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.

Villalobos v. TWC Administration LLC: Is firing someone for having a disability a defense to an allegation of age discrimination?

In Villalobos v. TWC Administration LLC, No. 16-55288 (Dec. 26, 2017), the Ninth Circuit held that the defendant could not rebut Ralph Villalobos's prima facie case of age discrimination under the California Fair Employment and Housing Act based on evidence that it fired him because of "his repeated, prolonged leaves of absence." In the court's view, because the absences were the result of
Villalobos's disability, an adverse action based on the absences was also based on disability. Because the employer's asserted reason for terminating Villalobos was "neither legitimate nor non-discriminatory," it was insufficient to rebut his prima facie case of age discrimination.

As I see it, the court's analysis reflects a fundamental misunderstanding of how discrimination is established under the McDonnell Douglas framework, which is the indirect method of proof that Villalobos relied upon to try to establish his age discrimination claim. Under the McDonnell Douglas framework: 1) the plaintiff establishes a prima facie case, which is essentially a weak inference that an adverse employment decision was based on a prohibited characteristic, such as age as in the case at hand; 2) the defendant produces evidence that the adverse employment decision was based on a nondiscriminatory reason, such as job performance; and 3) the plaintiff proves that the employer's asserted reason in prong 2 was a pretext for discrimination based on the prohibited characteristic identified in prong 1. Here, the court concluded that the defendant failed to rebut the plaintiff's prima facie case of age discrimination by asserting that it had engaged in disability discrimination. Although the court recognized that the employer's reason did not reflect discrimination based on age, it explained that "an otherwise unlawful proffered reason cannot satisfy the employer's burden at step two even if it is not facially discriminatory toward the particular protected class on which the claim is based."

The Ninth Circuit's analysis is contrary to the Supreme Court's decision in Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993). In Hazen Paper, the Supreme Court looked at whether an employer would be in violation of the federal Age Discrimination in Employment Act if it were to fire an employee in order to prevent his pension benefits from vesting. The Court concluded that, while such a practice would be actionable under the Employee Retirement Income Security Act, it would not by itself violate the ADEA:
That law requires the employer to ignore an employee's age (absent a statutory exemption or defense); it does not specify further characteristics that an employer must also ignore. Although some language in our prior decisions might be read to mean that an employer violates the ADEA whenever its reason for firing an employee is improper in any respect, see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973) (creating proof framework applicable to ADEA) (employer must have "legitimate, nondiscriminatory reason" for action against employee), this reading is obviously incorrect. For example, it cannot be true that an employer who fires an older black worker because the worker is black thereby violates the ADEA. The employee's race is an improper reason, but it is improper under Title VII, not the ADEA.
Similarly, if an employee alleges age discrimination, then evidence that the employer has engaged in disability discrimination may be relevant to a claim of disability discrimination, but it is not sufficient by itself to establish that the employer also engaged in age discrimination. Logically speaking, it's obvious that if evidence of disability discrimination is per se evidence of age discrimination, then it's also per se evidence of sex discrimination, race discrimination, and so on ad infinitum. This would be patently absurd. The only kind of reason that fails to rebut a claim of age discrimination is an age-based reason, such as asserting that a worker was fired because older workers tend to be less reliable.

The error of the Ninth Circuit's ways is even starker if we look at its decision in Santillan v. USA Waste of California, Inc., 853 F.3d 1035 (9th Cir. 2017). In that decision, the court held that the defendant could not rebut Gilberto Santillan's prima facie case of age discrimination under the California Fair Employment and Housing Act by asserting that it failed to reinstate him because he lacked proper work authorization under the federal Immigration Reform and Control Act. Because the court concluded that IRCA exempted Santillan from this requirement, the employer's reliance on IRCA was not a legitimate reason for failing to reinstate Santillan and therefore not a defense to his assertion of age discrimination. 

Little reflection is needed to see that this analysis makes no sense. If an employer's assertion that it failed to reinstate an employee because he lacked work authorization rebuts a claim of age discrimination when the employer is correct, then why does it fail to do so when it is an honest mistake? In either case, the employer has not engaged in age discrimination. As noted in Hazen Paper, an employer may violate ERISA by firing an employee to prevent his pension benefits from vesting, but that does not mean it has violated the ADEA. Likewise, an employer may violate IRCA by requiring certain documents, but how does that establish that it engaged in age discrimination? Under the analysis followed by the Ninth Circuit in Santillan and Villalobos, a violation of one statute is also essentially a violation of any other statute. And if the need for a "legitimate" reason requires more than merely a lawful reason, then employers may be subject to courts second-guessing their business decisions even when they are not specifically prohibited by statute. 

You may wonder, however, what's the harm? If disability discrimination is unlawful, then how can it be a defense to a claim of age discrimination. In Villalobos's case, it might not make any real difference since, pursuant to the California law under which he brought his claim, it is unlawful for an employer to discriminate based on age or disability. However, federal law has two distinct statutes prohibiting age and disability discrimination, and these have somewhat different requirements for coverage. And in Hazen Paper and Santillan, the employers' asserted reasons were arguably unlawful, but they were potentially violations of entirely different laws unrelated to discrimination. Different laws have different coverage requirements, different procedures, and different remedies, so an employee must bring his claim under the specific statute that applies to the employer's action.

Notably, Villalobos and Santillan both involve claims under the California Fair Employment and Housing Act, so maybe there's something peculiar about that law. But if so, I'm not sure what distinguishes it from federal law. Both decisions also purport to be applying the McDonnell Douglas framework, so there's no reason to think that the Ninth Circuit would have rejected the claims had they been brought under federal law. More likely, the Ninth Circuit is just wrong.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.

Sunday, December 17, 2017

NLRB says maintaining workplace civility rules is lawful, but applying them may still be unlawful in some cases

Changing its position, the National Labor Relations Board has endorsed workplace civility rules in a new decision, Boeing Company & Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, Cases 19–CA–090932, 19–CA–090948, and 19–CA–09592. Previously, the Board had invalidated workplace policies requiring basic civility, where they could be reasonably construed as prohibiting conduct protected by the National Labor Relations Act. In a new balancing test, the Board concluded that even if workplace civility rules can be reasonably interpreted as prohibiting conduct protected by the Act, "the potential impact on protected rights is outweighed by justifications associated with the rule."

As a "promising practice" for preventing unlawful harassment, the EEOC has endorsed civility and "respect workplace" training, so the Board's change in position relieves some of the tension between the two agencies' stances on addressing harassment.

Significantly, the Board explained that, "[a]lthough the maintenance of [certain] rules will be lawful, the application of such rules to employees who have engaged in NLRA-protected conduct may violate the Act, depending on the particular circumstances presented in a given case." For example, in Cooper Tire & Rubber Co. v. NLRB, the Eighth Circuit upheld a decision by the NLRB that Cooper Tire violated the Act by firing an employee for making racist statements on the picket line (see this prior post). Pursuant to the Board's new Boeing decision, it might not violate the NLRA to adopt a rule prohibiting racist conduct, even if it is on the picket line, but it still might be unlawful to take certain actions against an individual who engaged in protected conduct. 

Although the Cooper Tire decision has been criticized by some employer groups for placing employers in a no-win situation -- either violating the NLRA or Title VII -- such concerns appear to be overblown. A report by Acting Chair Victoria Lipnic and Commissioner Chai Feldblum cautions against adoption of "zero tolerance" policies that impose a "one-size-fits-all" approach. Instead, responses to harassment should be proportionate to the offense. In Cooper Tire, the court noted that even if the employer was obligated to take some action in response to the racist picket line conduct at issue in that case, it was not obligated to fire the perpetrator. Indeed, the discipline imposed in Cooper Tire may have exceeded what the EEOC would have recommended. 

In Boeing, the Board has sought to balance "employee rights and employer interests," so even if the Board does not narrow what it considers to be protected picket line conduct, it may uphold some forms of discipline imposed for protected conduct. Thus, even if an employer could not justify firing an employee for picket line conduct, the Board might conclude that less severe forms of discipline would be permissible under the Act.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.

Saturday, December 16, 2017

Fallon v. Mercy Catholic Medical Center: Is the Title VII requirement that employers accommodate religion unconstitutional?

In Fallon v. Mercy Catholic Medical Center of Southeastern Pennsylvania, the Third Circuit affirmed the dismissal of Paul Fallon's claim that he was subjected to religious discrimination when he was terminated because he refused to receive a flu shot. The Third Circuit agreed with the district court that Fallon's objections regarding the flu vaccine, while sincere and strongly held, were not religious in nature and therefore not protected by Title VII of the Civil Rights Act of 1964. In rejecting Fallon's claim of religious discrimination, the court required Fallon to establish that his views were part of a comprehensive belief system about "fundamental and ultimate questions having to do with deep and imponderable matters." In my view, this narrow test is inconsistent with controlling Supreme Court precedent and EEOC guidelines. Under such a narrow interpretation, Title VII would violate the Establishment Clause of the U.S. Constitution.

Guided by the doctrine of "constitutional avoidance," courts strive to interpret statutes so as to avoid conflicts with the U.S. Constitution. When courts interpret statutory protections for religious beliefs and practices, they must therefore be mindful of potential violations of the First Amendment's prohibition against establishment of religion.

Reflecting these principles, the EEOC's Guidelines on Discrimination Because of Religion "define religious practices to include moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views." This definition, in turn, is based on the Supreme Court's decisions in
United States v. Seeger, 380 U.S. 163 (1965), and Welsh v. United States, 398 U.S. 333 (1970), which looked at statutory protections for religious conscientious objectors under section 6(j) of the Universal Military Training and Service Act. That provision explained that a "religious" belief means a belief "in relation to a Supreme Being involving duties superior to those arising from any human relation, but does not include essentially political, sociological, or philosophical views or a merely personal moral code." In Seeger, the Supreme Court held that "[a] sincere and meaningful belief which occupies in the life of its possessor a place parallel to that filled by the God of those admittedly qualifying for the exemption comes within the statutory definition."

The Third Circuit rejected Fallon's contention that religious beliefs include "moral or ethical beliefs as to what is right and wrong that are sincerely held with the strength of traditional religious views." Instead, the court insisted that Seeger and Welsh require that the individual claiming protection do more to show that a belief "occup[ies] a place parallel to that filled by God in traditionally religious persons," namely that the views are part of a comprehensive belief system about "fundamental and ultimate questions having to do with deep and imponderable matters."

This interpretation of Seeger and Welsh is untenable. In Welsh, the Supreme Court stated:

If an individual deeply and sincerely holds beliefs that are purely ethical or moral in source and content but that nevertheless impose upon him a duty of conscience to refrain from participating in any war at any time, those beliefs certainly occupy in the life of that individual "a place parallel to that filled by . . . God" in traditionally religious persons. Because his beliefs function as a religion in his life, such an individual is as much entitled to a "religious" conscientious objector exemption under § 6 (j) as is someone who derives his conscientious opposition to war from traditional religious convictions.
Thus, it is clear that deeply held moral and ethical beliefs are considered "religious" because those beliefs in and of themselves occupy a place in the life a non-religious person parallel to that of God in the life of a religious person. There is no further requirement that the beliefs be part of a comprehensive belief system about "fundamental and ultimate questions having to do with deep and imponderable matters." Significantly, many moral and ethical beliefs are merely a matter of common sense. It seems pretty obvious that it's wrong to punch someone in the face without provocation, and you can believe that strongly without reference to an underlying belief system regarding profound questions about the nature of the universe.

To be sure, the Third Circuit's test may be useful in evaluating whether a belief is religious even though it has nothing to do with morality or ethics. For instance, if someone claims that he has a religious belief that he must refrain from wearing green pants, then protection may depend on whether the belief is part of a broader belief system related to deep and imponderable matters.

In the context of sincerely and deeply held ethical or moral beliefs, however, the imposition of further requirements runs the risk of violating the First Amendment's prohibition against establishment of religion. The constitutional concerns that drove the Supreme Court's interpretation of the statutory exemption for conscientious objectors were made explicit in Judge Harlan's concurrence in Welsh:  
[H]aving chosen to exempt, [Congress] cannot draw the line between theistic or nontheistic religious beliefs on the one hand and secular beliefs on the other. Any such distinctions are not, in my view, compatible with the Establishment Clause of the First Amendment.
If the exemption is to be given application, it must encompass the class of individuals it purports to exclude, those whose beliefs emanate from a purely moral, ethical, or philosophical source. The common denominator must be the intensity of moral conviction with which a belief is held. Common experience teaches that among "religious" individuals some are weak and others strong adherents to tenets and this is no less true of individuals whose lives are guided by personal ethical considerations.
In Fallon's case, it's not obvious that his objection to the flu vaccine was grounded in his own personal moral or ethical beliefs, but he deserves to have his claim evaluated under a test that doesn't violate the First Amendment.

On the other hand, as I discussed in this prior post, I think that coverage of purely moral or ethical beliefs may be especially significant for vegetarians and vegans who believe that it is morally wrong to exploit animals. If a court properly applies Seeger and Weber and the EEOC's guideline, it should be quite easy for ethical vegetarians and vegans to establish coverage under Title VII. If the statute protects a vegetarian who objects to eating meat based on a passage in the Bible, then surely it must also protect a vegetarian who has strong moral objections to killing and eating animals.

Protecting someone's right to practice his religion may be commendable, but let's not forget about the Constitution.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.

Tuesday, December 12, 2017

En Banc Oral Argument in Rizo v. Yovino: Sometimes, the way to do a good job is to do a bad job

Earlier today, the Ninth Circuit, sitting en banc, heard oral argument in Rizo v. Yovino, in which it is considering the extent to which prior salary can be used under the Equal Pay Act to justify a wage differential between a man and a woman doing the same job. Nominally, the issue that the court was supposed to look at is whether prior salary can be the sole factor under the Equal Pay Act, and in prior posts (here and here), I've pointed out that this case isn't an appropriate vehicle for answering that question because the defendant did not rely solely on prior salary. But that turns out not to have mattered because it became clear during the oral argument that it is all or nothing: either prior pay is a factor other than sex under the Equal Pay Act or it is not. It makes no difference whether it is the sole factor.

Strikingly, it was not the skill of the advocates that revealed the potential problem with relying to any extent on prior pay but rather Ninth Circuit judges who repeatedly questioned the coherence of the positions they were arguing. If reliance on prior pay is impermissible, as it was contended, because doing so perpetuates sex-based wage disparities, then it makes no difference whether prior pay is the only factor that is used to set a new employee's starting pay. The Equal Pay Act does not allow an employer to base pay on sex even if sex only plays a small part.

The EEOC, however, represented by Barbara Sloan, stuck to its guns, taking the peculiar position that prior pay can be considered by an employer but can't make a difference in how much someone is paid. As one of the judges noted, the EEOC was advocating an "interesting" position that "it's ok to utter the words, but they can't mean anything." Trying to clarify the EEOC's stance, Sloan argued that if an employer really needed a particular employee, then it could agree to match his prior salary, and in such a case, the employer would be relying on the need, not the prior salary. But if that is so, then it's not at all clear why the EEOC is objecting to what the defendant is doing in this case, because the defendant relied on prior salary, in part, to set pay so that it could recruit employees with the promise that they would get a 5% pay raise over what they are currently making.

Here, the judges by and large found the arguments advanced by Rizo and the amici supporting her to be lacking. Nevertheless, the EEOC and equal pay advocates may very well get not only what they have asked for but more. And this must be especially frustrating to Shay Dvoretzsky, who represented the employer, since that outcome, which seems likely to me, will not be because of any failure on his part but on the part of opposing counsel.

The lesson? Sometimes, the way to do a good job is to do a bad job.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.