Thursday, August 17, 2017

White v. Office of the Cook County Public Defender: Can you establish disparate impact without an expert?

In White v. Office of the Cook County Public Defender, No. 14-cv-7215 (N.D. Ill. Aug. 14, 2017), Federal District Court Judge John Blakely rejected the disparate impact claim of Patrick White on the grounds that he failed to establish a prima facie case of disparate impact. Given the disparities between the rates at which men and women were promoted and the number of individuals involved, I think White should have been able to proceed with his claim.

White alleged that the process for promotion to Grade IV Assistant Public Defender, which was based on interview scores assigned by a board composed of three women, had a disparate impact on men. There were 15 positions available for immediate promotion, and the board interviewed 18 minimally qualified male applicants and 18 minimally qualified female applicants. The 15 positions were awarded to 11 women and 4 men. The board identified 4 additional applicants -- two men and two women -- for future promotions when more slots became available.

No matter how you slice it, these figures seem sufficient to establish a prima facie disparate impact claim. Judge Blakely rejected White's claim based on the "exceedingly small sample size." The sample size, however, was not that small, and the disparity in the promotions rates between men and women were large. Here, the board selected 13 out of 18 women for immediate or future promotion, but it selected only 6 out of 18 men. The promotion rate for men (.33) was less than half that for women (.72). It is true that such a disparity in promotion rates might not have been sufficiently probative if there had been significantly fewer applicants or selectees. Similarly, if the two-to-one disparity had been less extreme, then, absent a larger sample size, the plaintiff's evidence might not have established a prima facie case of disparate impact.

Although Judge Blakely faults White for failing to submit expert evidence, he also notes that there is no formal requirement that he do so. A simple Google search reveals multiple sources that provide tests for evaluating whether a disparity is statistically significant, meaning whether it is unlikely to arise by chance. A particularly easy test to apply is the chi-squared test (see, for example, here and here), which is endorsed by the EEOC's Compliance Manual Section on Compensation Discrimination. If the test reveals the likelihood of a disparity arising by chance to be less than 5%, the EEOC and most courts consider that sufficient to establish a prima facie case of disparate impact.

In this case, you could compare only the men and women selected for immediate promotion or you could compare the men and women selected for either immediate or future promotion. The first comparison reveals that the probability of the disparity is only .018, and the second comparison reveals a probability of only .019, both of which are well below the threshold of .05. Given the absence of any formal requirement that a plaintiff present expert evidence in order to establish a prima facie case of disparate impact and the simplicity of evaluating the statistical evidence in this case, I would think this one of those cases where expert evidence is not needed.

On the other hand, White may have been required to do more than merely present evidence of statistical disparities. Even if he was not required to submit expert evidence, he may have been required to have at least explained the application of the chi-squared test or some other statistical tool for establishing a prima facie case based on his statistical evidence. It is not apparent that White did so. What we're left with then is the rejection of a disparate impact claim that probably should not have been rejected -- at least on the grounds that there was no prima facie case -- but it's not clear who's to blame.






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, August 15, 2017

Ortiz-Diaz v. v. HUD: Does Title VII only apply to materially adverse actions?

On August 11, 2017, a panel of the D.C. Circuit reissued its decision in Ortiz-Diaz v. HUD. Previously, the panel had rejected Samuel Ortiz-Diaz's claim that he was subjected to an adverse action based on his race and national origin when he was denied a lateral transfer, reasoning that an employer's action is not materially adverse unless supported by a record of "objectively tangible harm" and that "purely subjective injuries" are not enough. 

As I discussed in this prior post, I believe the court's refusal to consider subjective injuries is inconsistent with the Supreme Court's decision in Burlington Northern & Santa Fe Railway v. White, 548 U.S. 53 (2006). Because the transfers Ortiz-Diaz requested would have moved his duty station closer to his wife's, I think the court should have taken that into consideration in determining whether it was reasonable for him to have viewed the transfer denials as adverse.

In the reissued decision, as in the original, the panel did not consider subjective injuries, but it nonetheless concluded that Ortiz-Diaz had alleged that the transfer denials were materially adverse. The court explained that Ortiz-Diaz had alleged and presented evidence that he was denied a transfer away from a racially biased supervisor and that a lateral transfer away from the supervisor would have improved his career prospects.

What is most interesting about the new decision is the court's strong disapproval of the D.C. Circuit requirement that a plaintiff establish material adversity. Each of the panel members filed a separate concurrence arguing that a lateral transfer should be considered per se actionable, regardless of whether it is materially adverse. Specifically, Judge Judith Rogers contended that the D.C. Circuit should recognize that any transfer denied because of race or another protected characteristic is covered by Title VII; Judge Brett Kavanaugh contended that transferring an employee because of race "plainly constitutes discrimination with respect to 'compensation, terms, conditions, or privileges of employment'" under section 703(a)(1) of Title VII; and finally Judge Karen Lecraft Henderson contended that the defendant's transfer program could qualify as a "privilege" of Ortiz-Diaz's employment.

The thing is, the rejection of a materiality requirement would be inconsistent with the Supreme Court's decision in Burlington Northern. There, the Court explained that Title VII's retaliation provision is limited to "materially adverse actions":
We speak of material adversity because we believe it is important to separate significant from trivial harms. Title VII, we have said, does not set forth "a general civility code for the American workplace."
The requirement of material adversity would apply no less to someone alleging discrimination based on race (or color, sex, religion, or national origin) than it would to someone alleging retaliation. Indeed, if there is a difference, then coverage is broader as to retaliation claims, not the reverse.

Although the concurrences in Ortiz-Diaz would have you believe that the D.C. Circuit's requirement of material adversity is an outlier position, that is not at all the case. So far as I know, this is the position of every court of appeals. Given the substantial body of case law requiring material adversity, including at the Supreme Court level, any hope that the materiality requirement will be abolished seems little more than a pipe dream.









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, August 12, 2017

Shultz v. Congregation Shearith Israel of NYC, Spanish & Portugese Synagogue: Can an employee sue for discriminatory termination if the employer rescinds the action before it is effective?

In Shultz v. Congregation Shearith Israel of NYC, Spanish & Portugese Synagogue, No. 16-3140-cv (Aug. 10, 2017), the Second Circuit held that Alana Shultz could pursue her claim that she was fired because of her pregnancy, even though the defendant rescinded the termination decision before it became effective.

The Second Circuit's decision is grounded in Supreme Court precedent addressing when an employee's termination claim accrues (or arises) and triggers the filing period for bringing a claim. 
Pursuant to that precedent, an employee's termination claim accrues when she is notified of the termination, even if the termination is effective at a later date. This means that the time frame for challenging the termination starts when the employee receives notice. In some cases, the time frame could even expire before the termination is effective.

Because an employee's termination claim accrues when she receives notice, the Second Circuit disagreed with the lower court's conclusion that a rescinded termination decision does not constitute an adverse action:
If the claim accrues at the time of notification of termination, . . . rescission of the notice at a point after the cause of action has accrued cannot eliminate the adverse employment action that has already occurred, and negate an accrued claim for relief. Accordingly, we conclude that the notice of termination itself constitutes an adverse employment action, even when the employer later rescinds the termination.
Significantly, however, the court noted that the good-faith rescission of a termination decision can affect the damages that a claimant might be entitled to. In this case, despite the rescission of the termination decision, Shultz did not return to work after the original date of her termination. She contended that the defendant's offer of reinstatement was "not a bona fide offer of unconditional reinstatement." Because there was a dispute as to whether the employer's rescission was in good faith, a fact finder would have to determine whether Shultz acted reasonably in rejecting the defendant's offer to reinstate her.

In closing, the court noted some potential limits of its holding. The court noted, for instance, that in some cases the time between a notice of termination and its rescission could be so short that the termination would be de minimis. As an example, the court noted that an impulsive "You're fired" followed by an immediate revocation would present different circumstances from the ones in this case. Here, the defendant did not rescind the termination for two weeks, during which Shultz "had ample time to experience the dislocation of losing her employment at a particularly vulnerable time, undertake the effort of retaining counsel, and inform the Congregation that she was going to file suit."

While this distinction makes sense to me, I'm a little surprised that the court also appears to have limited its holding to rescinded terminations. It is true that a termination may impose more harm than other adverse actions, and therefore, it might be easier to establish an adverse action with respect to a rescinded termination than with respect to another kind of rescinded adverse action. Still, the court seems to have gone further, viewing the distinction between terminations and other adverse actions as one of kind rather than merely degree: 
A notice of termination is unlike other types of actions that an employer may take towards an employee in that it announces the complete termination of the employment relationship. To put it mildly, "[e]ven under the most optimal circumstances ․ termination of an employee is likely to give rise to bad feelings and anxiety."
To illustrate, the court points out that it has held that a rescinded counseling letter does not constitute an adverse action. But the court fails to acknowledge that a counseling letter very well might not constitute an adverse action even if it is not rescinded. So while a termination decision might be distinguishable from a counseling letter, there's less reason to distinguish it from other employment decisions that are clearly materially adverse, such as demotion, failure to promote, or denial of a pay raise. If someone has to hire an attorney and threaten to sue, I don't see why it should generally matter what kind of an adverse action is involved.

A final observation I have is that the court's holding may not apply to the federal sector. Federal employees are covered by regulations adopted by the EEOC, which provide that the time frame for challenging a personnel action, such as a termination, starts when the personnel action is effective. Thus, contrary to in the private sector, a federal sector claim appears not to accrue until the challenged action's effective date. If that is so, then based on the reasoning in Schultz, it would seem to follow that a federal sector action that is withdrawn before its effective date is not an adverse action.







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, August 8, 2017

Cooper Tire & Rubber Co. v. NLRB: The NLRA Takes on Title VII and May the Best (Better) Statute Win

In Cooper Tire & Rubber Co. v. NLRB, 16-2721 (Aug. 8, 2017), the Eighth Circuit upheld a decision by the NLRB that Cooper Tire violated the National Labor Relations Act by firing an employee for making racist statements while on the picket line. This case has received a lot of attention because it has been seen by some as pitting an employer's competing obligations under Title VII of the Civil Rights Act of 1964 against its obligations under the NLRA. As discussed below, even though the court upheld the Board's decision in this case, it cautioned the Board not to go too far.

Cooper Tire fired Anthony Runion for statements he allegedly made while on the picket line. On January 7, 2012, he allegedly yelled, "Hey, did you bring enough KFC for everybody?" and "Hey anybody smell that? I smell fried chicken and watermelon." He directed the comments at a van carrying replacement workers as it crossed the picket line. When he made the statements, Runion's hands were in his pockets, and he made no overt physical movements or gestures. Although other picketers heard the statements, there was no evidence that the replacement workers heard them. The next month, when Cooper Tire began recalling workers who had been on strike, it fired Runion for the picket line statements.

The court explained that firing an employee for picket line misconduct is an unfair labor practice in violation of the NLRA unless the alleged misconduct "may reasonably tend to coerce or intimidate employees in the exercise of rights protected under the Act." Substantial evidence supported the Board's conclusion that Runion's statements were "not violent in character, and they did not contain any overt or implied threats to replacement workers or their property." Runion also did not engage in threatening or intimidating conduct toward the replacement workers. Thus, the court deferred to the Board's determination that Cooper Tire violated the NLRA by firing Runion.


Although the court upheld the Board's determination, it "agree[d]" with a concurrence in a D.C. Circuit decision that suggested that the Board should be careful not to cross the line:
We have cautioned the Board before against assuming that the use of abusive language, vulgar expletives, and racial epithets between employees is part and parcel of the vigorous exchange that often accompanies labor relations. . . . [T]he Board's decisions seem in too many cases . . . oblivious to the dark history such words and actions have had in the workplace (and elsewhere). . . . To be sure, employees' exercise of their statutory rights to oppose employer practices must be vigorously protected, and ample room must be left for powerful and passionate expressions of views in the heated context of a strike. But Board decisions' repeated forbearance of . . . racially degrading conduct in service of that admirable goal goes too far.
For whatever reason, the court apparently concluded that the Board had not crossed the line in this case, but the court opened the door to the possibility that it might reject Board decisions protecting other forms of racist conduct. 

As for Cooper Tire's obligations under Title VII, the court concluded that, even if Cooper Tire had an obligation to take some action against racist conduct on the picket line, it did not have a "legal obligation to fire Runion." On the other hand, if, as the court suggested, some forms of racist conduct might be outside the bounds of NLRA protection, then an employer might be free to fire an employee when it did have an obligation to do so to comply with Title VII. If so, there would not be any conflict between the NLRA and Title VII.






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.

EEOC v. AutoZone: When is something a "federal case"?

This follow-up to my recent post on the Seventh Circuit's panel decision in EEOC v. AutoZone looks at the EEOC's petition for rehearing by the full court (en banc rehearing). In the panel decision, the court rejected the EEOC's claim that the defendant violated section 703(a)(2) of Title VII when it transferred a black sales manager to another store because it wanted to make the location from which he was being transferred a "predominantly Hispanic" store. The court concluded that the EEOC's claim failed because the EEOC had alleged that segregation is per se unlawful even though section 703(a)(2) requires evidence that the employee was subjected to a materially adverse employment action, meaning an action that made him materially worse off. A purely lateral transfer that does not affect an employee's pay or status would not constitute a materially adverse employment action. 

In its petition for rehearing, the EEOC contends that the panel decision is inconsistent with the plain language of 703(a)(2). In my view, although the EEOC is, of course, correct that the statutory language controls, the EEOC itself ignores the specific language of 703(a)(2). Had the EEOC actually interpreted the words of 703(a)(2), it would have had difficulty showing that the provision does not require a materially adverse action.

As a starting point, it's helpful to look at the two main Title VII provisions prohibiting race discrimination. Section 703(a)(1) makes it unlawful for an employer "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race." Section 703(a)(2), the provision at issue in this case, makes it unlawful for an employer "to limit, segregate, or classify his employees or applicants for employment 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 race."

The EEOC contends that, given the different language of the two provisions, it is only necessary to allege a materially adverse employment action under 703(a)(1). The EEOC argues that section 703(a)(2) applies to the deprivation of employment opportunities, and in this case, the transfer of the black manager to another store denied him the employment opportunity of working at the store from which he was transferred. By contrast, the EEOC contends that because 703(a)(1) only applies to "terms, conditions, or privileges of employment," that section only covers materially adverse actions.

This argument has at least two flaws. First, why does the EEOC think that the opportunity to work at a particular store is not a term, condition, or privilege of employment? A lateral transfer no more denies someone employment opportunities than it affects a term, condition, or privilege of employment, so the EEOC has not pointed to any relevant difference in the statutory text for its broad interpretation of 703(a)(2). A much better argument would be that the term "discriminate" requires material adversity. That term is only in section 703(a)(1), and it arguably limits the kinds of race-based terms, conditions, and privileges of employment that are actionable.

Second, the EEOC ignores the requirement that the challenged action "adversely affect [the claimant's] status as an employee." Section 703(a)(2) applies if the employer's action deprives an "individual of employment opportunities or otherwise adversely affect[s] his status as an employee." The inclusion of the term "otherwise" clarifies that 703(a)(2) does not apply to just any old denial of employment opportunities, only one that adversely affects someone's status as an employee. It seems doubtful that a purely lateral transfer could be said to adversely affect an individual's status as an employee. Thus, even though the term "discriminate" is absent from section 703(a)(2), that provision nonetheless imposes other requirements that arguably limit it to materially adverse actions.

As Congress recognizes, not every employment action should be a "federal case," and the EEOC has failed to explain why that is any less true for 703(a)(2) than for 703(a)(1).







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.

Wednesday, August 2, 2017

Fuller v. Idaho Dept. of Corrections: When does an employer cross the line by condoning sexual harassment?

The Ninth Circuit's decision in Fuller v. Idaho Department of Corrections, No. 14-36110 (July 31, 2017), is an atypical case in which the court held that a sexually hostile work environment may have been created not by the alleged sexually harassing conduct itself but instead by the employer's response to the conduct. Here, in the court's view, a jury could find that the defendant created a hostile work environment by "condoning" or "ratifying" a male employee's multiple rapes of the plaintiff.

Cynthia Fuller, a probation and parole officer, began a consensual romantic relationship with a male coworker, Herbt Cruz, around the beginning of 2011. On August 15, 2011, the defendant placed Cruz on paid administrative leave and barred him from the premises because he was being investigated for an alleged rape of a woman other than Fuller. Fuller learned about the investigation, but apparently did not learn the reason for it. Between August 22 and September 3, Cruz allegedly raped Fuller three times, each time outside the workplace. On September 8th, Fuller notified the district manager about the rapes, and on September 9th, she obtained a confidential protective order against Cruz. On September 9th, the district manager also sent an email to district staff, including Fuller, updating them on Cruz's situation. The email stated that Cruz "sound[ed] rather down" and advised employees that, while they could not discuss the pending investigation with Cruz, they were "free" to "talk to him, give him some encouragement etc." The defendant subsequently denied Fuller's request for paid administrative leave, but it allowed her to use sick leave and vacation leave. In mid-October, after her leave ran out, Fuller returned to work. In mid-November, she asked the defendant to notify all employees about the protective order. The defendant declined this request but reminded employees that Cruz continued to be barred from the workplace and told them to notify a supervisor if they saw him. Fuller resigned the same day. At the time Fuller resigned, the defendant had already decided to terminate Cruz, but for reasons that are not made clear in the court's decision had not informed Fuller of the status of the investigation.

Fuller alleged, among other things, that Cruz's conduct created a hostile work environment, that the denial of paid administrative leave was based on her sex, and that the failure to notify employees about the protective order led to her constructive discharge. The court rejected each of these claims. The court concluded that the alleged rapes did not create a hostile work environment, because they occurred outside the workplace while Cruz was barred from the workplace and he never returned to the workplace following the rapes. The court concluded that the denial of paid leave was not sex-based, because there was no dispute that, given budgetary constraints, the defendant had consistently denied paid leave, despite having a rule that allowed paid leave for "unusual" situations. Finally, the court concluded that Fuller was not constructively discharged by the defendant's refusal to notify staff of the confidential protective order, given that the defendant had already removed Cruz from the workplace and it responded to Fuller's request by directing employees to notify a supervisor if Cruz were to show up.

Despite rejecting these claims, the court held that a reasonable jury could conclude that "an objective, reasonable woman would find 'her work environment had been altered' because the employer 'condoned' the rape 'and its effects.'" The court noted:
When Fuller reported her rapes, [the district manager] told her "that Cruz had a history of this kind of behavior" and "he knew of several instances" of misconduct by Cruz. But, nonetheless, [the district manager] almost immediately thereafter told District 3 staff to "feel free" to "give [Cruz] some encouragement" and that he "hate[d]" that Cruz "cannot come to the office until the investigation is complete." This e-mail came on the heels of [the district manager's] previous statement to staff that he looked forward to Cruz returning quickly. Fuller was privy to both of those announcements, in which her supervisor publicly supported an employee whom he knew was accused of raping two women and sexually harassing several others.
The court further noted that, when Fuller raised concerns that she would be unsafe if Cruz returned to the workplace, the district manager and the deputy chief of Fuller's division responded that Cruz was "still our employee," and that they did not want a "stigma hanging over" him if "the allegations were proven untrue." In the court's view, "[a] reasonable woman in Fuller's circumstances could perceive the repeated statements of concern for Cruz's well-being by supervisors as evincing their belief that Fuller was lying or, perhaps worse, as valuing Cruz's reputation and job over her safety."

In allowing Fuller's case to proceed, the court acknowledged that it was providing little guidance as to when an employer's conduct might be reasonably regarded as "condoning or ratifying" a rape. As you would expect, guided by an I-know-it-when-I-see-it standard, it's easy for judges to disagree. Thus, in dissent, Judge Sandra Ikuta reached the opposite conclusion:
[T]he record here indisputably shows that the IDOC took immediate remedial steps in response to Fuller's complaints, even though her complaints were not based on workplace conduct. When Fuller reported her allegations to the IDOC, Cruz was already separated from the workplace, the IDOC warned employees that he could not be on premises, and at no point did anyone with the authority to speak on the IDOC's behalf tell Fuller (or any IDOC employee) that Cruz had been exonerated or would return. Instead, the IDOC diligently investigated Fuller's allegations, believed them, and ultimately used them as the basis of the decision to terminate Cruz's employment. . . .
So what's the takeaway?

As recognized by the court, an employer faced with an accusation that an employee has been sexually harassed by a coworker has to be mindful of both the interests of the accuser and the accused.
Rather than placing a thumb on one side of the scale, the employer must be neutral and balance both employees' interests appropriately. In this case, the court determined that the balance was sufficiently tipped in favor of the accused, allowing a reasonable woman to conclude that the defendant condoned or ratified Cruz's alleged rapes of Fuller.




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.