Issues in Employment Law
March 2001
In Hiring or Promoting, employers will want to be cautious in using subjective" qualification criteria, such as "extensive experience", according to a recent Federal Court of Appeals decision.
In a recent opinion, the Fifth Circuit Court of Appeals, which covers the states of Texas, Louisiana, and Mississippi, held that when employer's hiring criterion was entirely subjective, employee's claims of discriminatory failure-to-promote could not be dismissed without a trial. In this case, Medina v. Ramsey Steel Company. Inc., 2001 WL 30616, 84 Fair EmpI. Prac. Cas. (BNA) 1652 (5th Cir. 2001), employer was hiring for an outside salesperson, and used at its criterion that applicants must have "extensive sales experience." The court held that while subjective criteria like this may serve legitimate functions, they also provide opportunities for unlawful discrimination, because the criteria themselves may be pretexts for discrimination. It further stated that an employer cannot use wholly subjective standards, and then defend by claiming lack of qualifications when the hiring process is challenged as discriminatory. Further, the court held that whether a candidate meets subjective standards and whether the standards are merely pretext for discrimination are largely questions of the credibility of the employer.
Thus, when determining its hiring qualifications, employers should rely upon, and document, industry custom, such as experience or education requirements (i.e. Most sales managers in this industry have 5 or more years of sales experience, thus we require 5 of more years of sales experience for the position of sales manager), or provide objective criteria based upon the employers own experience, as supported by sufficient documentation (i.e. it is our experience that a paralegal with less than one year experience in document production does not have sufficient background to effectively supervise staff, thus we require at least one year of document production experience for the position of senior paralegal.) In this way, employers will be more likely to have a discrimination case based upon its hiring practices dismissed versus needing to defend them at trial.
Employers need to be vigilant and consistent in disciplining employees who make comments and remarks which are potentially discriminatory, in order to have a case against it dismissed, a recent Federal Case reminds.
A supervisor's discriminatory remarks art workplace can be used as evidence of unlawful animus to survive an employer's attempt to have a case dismissed and can force an employer to go to trial unless the employer can demonstrate that it was unaware of the comment, or took prompt remedial action. In Medina v. Ramsey Steel Company, Inc., 2001 WL 30816, 84 Fair Empi, Prac. Cas. (BNA) 1652 (5th Cir. 2001), the court resurrected the "stray remarks doctrine" which was originally laid out as a four-prong test in Brown v. CSC Logic, Inc., 82 F.3rd 651 (5th Cir. 1996), and states that occasional remarks may serve as evidence of discrimination if they are: 1) related to the protected class; 2) proximate in time to an employment decision; 3) made by an individual with authority over the employment decision at issue, and 4) related to the employment decision at issue. Thus, evidence of the remarks will be evidence to be considered at a trial, and will not permit a dismissal of the case beforehand.
A Federal Court of Appeals has held that a black employee can be racially discriminated against by black employer. Employers, therefore, need to be consistent in preventing all potentially discriminatory commenth, even if the speaker is a member of the same protected class.
According to the 8th Circuit Court of Appeals, which covers North and South Dakota, Nebraska, Minnesota, Iowa, Missouri, and Arkansas, the nature and intent of the behavior or comment is what controls, not the identity of the speaker. In Ross v. Douglas County, 234 F.3d 391, 84 Fair EmpI. Prac. Cas. (BNA) 791 (8th Cir. 2000), a black corrections officer was routinely disparaged by his black supervisor by being referred to as "black boy" and "n____," even after the plaintiff requested that the supervisor cease using such derogatory terms. The court held that the fact that the offending party and the victim were both members of the same protected class did not change the fact that the victim was subjected to a hostile work environment on the basis of his race. The Court extended the logic of Onacle v. Sundowner Offshore Services. Inc., 523 U.s. 75, 118 S.Ct. 998, 140 L.Ed.2d 201 (1998) which held that same-sex discrimination was possible under Title VII. What this means for employers it that supervisors will want to be aware that discriminatory activities and comments are determined by those perceiving the activity or comment and not necessarily by the actor or speaker. Since phrases like "black boy" and "n___" could only ever by used in connection with a persons race, they are never appropriate in an employment context, under any circumstances, and employers can be liable for the actions of their supervisors.
Employers need to be aware that the expressed biases of some co-workers can be imputed to the employer under some circumstances, as a recent Court of Appeals decision suggests.
In Russell v. McKinney Hospital Venture, 235 F.3d 219, 84 Fair EmpI. Prac. Cas. (BNA) 941 (5th Cir. 2000) the Court of Appeals for the 5th Circuit, which includes Texas, Louisiana, and Mississippi, reinstated an age discrimination award which was based in part upon the biases and comments of a co-worker who was not the supervisor, or the individual who made the termination decision. In the somewhat unique facts of this case, the co-worker was the son of the Company CEO. He made derogatory comments regarding the age of the employee and told the supervisor that he would quit if the employee weren't fired. The supervisor subsequently fired the employee claiming that he sought a "new management style." The employer defended the case by stating that the coworker didn't make the decision to terminate, nor did he have such authority. However, the Court found that he wielded a degree of influence which exceeded his status as a co-worker, and that his ability to intimidate and persuade made him more than a mere employee. Thus his comments about the plaintiff were imputable to the employer.
Employers who use temporary employees, and the services of temporary placement-type agencies, need to have specific agreement with such agencies to protect them from liability of the Agency's discriminatory practices, according to a new "Guidance" issued by the Equal Employment Opportunity Commission.
The EEOC, in a "Guidance" entitled "Application of the ADA to Contingent Workers Placed by Temporary Agencies and Other Staffing Firms" and issued on December 22, 2000, recently took the surprising position that an employer can by liable for a temp agency's discriminatory misdeeds. According to the EEOC, since an "employee" can be considered an employee of both the temp agency and the employer, and that either or both of them can be held liable for discriminatory actions, an employee's request for accommodation under the ADA can likewise subject both the temp agency and the employer to liability for violations. This means that in order to limit its liability for punative damages under our discrimination laws, employers need to have specific agreements with the temp agencies that it uses to certify that the agency does not discriminate, and will indemnify the employer for its costs, fees, and damages, should the employer need to defends a suit based upon the temp agency's misdeeds.
A Maine Supreme Judicial Court has found that an employer's internal investigation of an employee's conduct is part of that employee's personnel file, and must be disclosed in its entirety to that employee upon request.
In a departure from the more common practice of excluding internal investigative reports and material, the Maine Supreme Judicial Court, in Harding v. WaI-Mart Stores. Inc., No. Pen-00-394, (Me. January 22, 2001), in applying the Maine statute governing employee records, found that such investigations were part of an employee's file, and must be disclosed upon request. The Maine statute in question stated that a personnel file:
includes, but is not limited to, any formal or informal employee evaluations and reports relating to the employee's character, credit, work habits, compensation and benefits and non-privileged medical records or nurses' station notes, relating to the employee that the employer has in the employer's possession.
Because this definition mentioned broad classes and types of records, and because it included all documents in "employer's possession," the Maine Supreme Court determined that the investigation would be part of the Personnel file of the employee.
In the District of Columbia, employers should be mindful that they are required to maintain employee records for at least six months. It would be prudent for DC employers to include these types of employee internal investigations for the same period.
Virginia and Maryland have no such statutory requirements.
New EEOC regulations may invalidate right to sue waivers signed as part of severance package, and may not require the return of any severance monies paid.
Under new EEOC regulations, in order for a waiver of rights under our discrimination laws to be effective, it must contain the following terms:
- I have read the agreement
- I understand it and know that I am giving up important rights. specifically xxxxx, and that I am giving up such rights or claims in exchange for a payment to which I was not already entitled.
- I agree with everything in it
- I have been advised to consult with my attorney prior to executing this agreement, and have in fact done so.
- I have been given twenty-one days to review and consider this agreement prior to signing it, and acknowledge that I have up to seven days after signing this document to withdraw by agreement.
This is necessary as the new rules, which implement a 1998 Supreme Court case which allowed an employee who waived her right to sue for age discrimination to claim that the waiver was invalid under the Older Workers Benefit Protection Act, 29 USC §626, without having to return the severance package she received in consideration for the waiver. While this case only applied to Age Discrimination cases and only in the context of the OWBPA, the new regulations could be applicable generally. Specifically, the OWBPA includes requirements that any covenant not to sue must include the above-language. By this statute, Congress has provided exactly what will be considered as a knowing and voluntary waiver of rights in the age discrimination context. Thus, the case and the regulations are instructive in what may be required in other waiver of discrimination rights contexts. Thus, employers who wish to include waiver provisions in severance agreements would be well-advised to mimic the required language of the OWBPA, regardless of the claim being waived. Otherwise, the former employee could bring suit, AND keep the severance monies, as well.
Employers must have a clear anti-discrimination/harassment policy, which is distributed to all employees, and that provides an effective complaint procedure, in order to defend a "Hostile work environment" discrimination case, a recent Federal Court of Appeals decision reaffirms.
The Court of Appeals for the 4th Circuit, which includes Virginia, West Virginia, Maryland, North Carolina, and South Carolina, in Barrett V. Applied Radiant Energy Corp., 2001 WL 121142 (4th Cir. 2001), recently detailed what an employer must due to successfully defend a "hostile work environment." This is differentiated from a quid pro quo discrimination case in that a "hostile work environment" case, it is not necessary that the employee have suffered any change of conditions in her employment. She may still have a complaint is she can demonstrate that discriminatory comments or actions were sufficiently severe or pervasive within the employment environment.
However, the courts have constructed an affirmative defense for employers in "hostile work environment" cases. This defense was first laid out in Faragher V. City of Boca Raton, 524 U.S, 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and is now called the "Faragher/Ellerth" defense. In order to qualify for this defense the employer must have an anti-harassment/discrimination policy, which it distributes to all of its employees. Employers will want to have each employee acknowledge receipt of the policy, either separately or as part of the employee manual process. Further, the policy needs to define the areas of anti-discrimination to include sex, race, age, national origin, disability, or ethnicity, to provide a complaint mechanism, which we would recommend as requiring an employee to make any complaints to the Human Resources Director. The Policy should also include a statement that there is no penalty for making such a report.
Finally, if the employer can show that the employee unreasonably failed to take advantage of the policy and the complaint procedure, than the employer can escape liability for "hostile work environment."
