Samole Law Firm, PA

 

A Full Service Miami Law Firm

                        Phone 305-670-5070

Recent Employment Cases

 

 

40-Year Old Claim For Sexual Abuse Barred By Statute of Limitations

 

According to the plaintiff’s complaint, in 1971 and 1972 while she was a minor, she was sexually abused by a teacher employed by the synagogue.  Approximately 40 years later in 2013, she sued the temple.  The complaint alleged that the delay in filing the claim was due to the traumatic nature of the abuse inflicted upon her which caused her to suffer repressed memory syndrome, and that she had no memory of the abuse until 2009 when it resurfaced.

The plaintiff argued that her repressed memory syndrome brought her within the provisions of §95.11(7), which states that for intentional torts based on abuse, actions may be commenced any time within seven years after the age of majority or within four years after the person leaves the dependency of the abuser, or within four years from the time of the discovery by the injured party of both the injury and the causal relationship.  The express language of the statute is limited to intentional torts, however, and the plaintiff’s theory of liability in this case was that the synagogue was vicariously liable or in breach of its fiduciary duty–not intentionally responsible (the abuser was not sued).

Additionally, the plaintiff asserted her claim came within the provision of Florida Statute §95.11(9), which provides that sexual battery offenses on victims under the age of 16 may be commenced “at any time.”  However, the subsection explicitly states it only applies to actions other than those which would have been time barred on July 1, 2010.  Because the plaintiff’s action was barred before that date, the court did not further address the issue.

Firestone v. Temple Beth Sholom, 41 Fla. Law Weekly D240 (Fla. 3rd DCA January 20, 2016):

 

Employers Cannot Refuse to Hire Applicants Based on Religious Belief or Practice


Even If prospective Employers are not specifically asked for an accommodation, Employers cannot refuse to Hire applicants based on Religious Belief or Practice.

 

In 2008, Abercrombie & Fitch — a retail clothier known for its specific styles — refused to hire 17-year-old Samantha Elauf, a practicing Muslim, because the headscarf that she wore pursuant to her religious obligations conflicted with Abercrombie’s employee dress policy, which prevented the wearing of “caps.” Interestingly, Ms. Elauf was a customer of Abercrombie and wore their clothing during the interview.

In 2009, the Equal Employment Opportunity Commission (EEOC) filed suit on Elauf’s behalf, alleging a violation of Title VII of the Civil Rights Act of 1964. That case went to trial, where Ms. Elauf obtained a $20,000 jury verdict. On appeal, the 10th Circuit in 2013 reversed the trial result, ruling that Ms. Elauf did not request an accommodation for her religious practices.

On June 1, 2015, the U.S. Supreme Court, in EEOC v. Abercrombie & Fitch Stores, Inc., overruled the 10th Circuit opinion and held in an 8 – 1 decision written by Justice Antonin Scalia that an employer may not refuse to hire an applicant if the employer was motivated by avoiding the need to accommodate a religious practice. Such behavior violates the prohibition on religious discrimination contained in Title VII of the Civil Rights Act of 1964. Holding: To prevail in a disparate-treatment claim under Title VII of the Civil Rights Act of 1964, an applicant need show only that his need for an accommodation was a motivating factor in the employer’s decision, not that the employer actually knew of his need.

From the EEOC press release:

EEOC General Counsel David Lopez hailed the decision. “At its root, this case is about defending the quintessentially American principles of religious freedom and tolerance,” Lopez said. “This decision is a victory for our increasingly diverse society and we applaud Samantha Elauf’s courage and tenacity in pursuing this matter.”

According to the Supreme Court, “An employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.” The court continued that “…to accommodate a religious practice is straightforward: An employer may not make an applicant’s religious practice confirmed or otherwise, a factor in employment decisions.”

“I was a teenager who loved fashion and was eager to work for Abercrombie & Fitch,” said Elauf. “Observance of my faith should not have prevented me from getting a job. I am glad that I stood up for my rights, and happy that the EEOC was there for me and took my complaint to the courts. I am grateful to the Supreme Court for today’s decision and hope that other people realize that this type of discrimination is wrong and the EEOC is there to help.”

To assist employees and employers in understanding their rights and obligations about accommodations for religious observances, the EEOC has a fact sheet on Religious Garb and Grooming in the Workplace.

The only dissent was by Justice Thomas, former head of the EEOC. He said the Court has drastically changed EEO law by turning this into a direct discrimination case as opposed to analyzing it as an indirect, disparate impact case, which turns on business necessity analysis.

Employers should consider the following practical pointers:

  1. “Dress” or “look” policies that appear “neutral” on their face (no caps, no beards, requirement to work on Saturday) may have a discriminatory effect even where there is no intent to discriminate. When implementing such policies employers should be conscious of the need to reasonably accommodate an applicant’s or employee’s religious practices whether or not the applicant or employee requests any particular accommodation(s).
  2. Employers should clearly communicate to applicants and employees that they will make reasonable efforts to accommodate their religious practices.
  3. Employers should train managers and supervisors on how to recognize religious accommodation requests and consider developing a procedure for processing such requests.
  4. Under Title VII, employers are not required to reasonably accommodate religious observances or practices that would be an undue hardship upon the employer. Whether an accommodation constitutes an undue hardship is determined on a case-by-case basis. Employers who choose to use this defense for failing to provide a reasonable accommodation should be able to articulate specific reasons for the decision.

 

EEOC v Abercrombie & Fitch Stores, Inc. On Certiorari to the Supreme Court of the United States (from the 10th US Circuit Court of Appeals), Docket 14-86, decided June 1, 2015

 

Reasonable Work Accommodations for Pregnant Workers

 

In March 2015, the U.S. Supreme Court held the Pregnancy Discrimination Act (PDA) could require employers to offer reasonable work accommodations—such as light duty—to pregnant workers if they offer accommodations to other workers similarly situated in their ability or inability to work. The Court declined deference to the EEOC’s 2014 Enforcement Guidance on Pregnancy Discrimination (and was somewhat dismissive of it), choosing to fashion its own framework for establishing discrimination under the PDA.

Facts of the Case 

Peggy Young was employed as a delivery driver for the United Parcel Service (UPS). In 2006, she requested a leave of absence in order to undergo in vitro fertilization. The procedure was successful and Young became pregnant. During her pregnancy, Young’s medical practitioners advised her to not lift more than twenty pounds while working. UPS’s employee policy requires their employees to be able to lift up to seventy pounds. Due to Young’s inability to fulfill this work requirement, as well as the fact that she had used all her available family/medical leave, UPS forced Young to take an extended, unpaid leave of absence. During this time she eventually lost her medical coverage. Young gave birth in April 2007 and resumed working at UPS thereafter.

Young sued UPS and claimed she had been the victim of gender- and disability-based discrimination under the Americans with Disabilities Act and the Pregnancy Discrimination Act. UPS moved for summary judgment and argued that Young could not show that UPS’s decision was based on her pregnancy or that she was treated differently than a similarly situated co-worker. Furthermore, UPS argued it had no obligation to offer Young accommodations under the Americans with Disabilities Act because Young’s pregnancy did not constitute a disability.

Employers hoping the Court’s decision might provide clear guidelines on how best to accommodate pregnant workers are instead facing uncertainty, since the Court failed to articulate what constitutes a legitimate, nondiscriminatory reason for denying accommodation to a pregnant worker. Instead, the case was remanded to the 4th Circuit with instructions to analyze the issue from a disparate impact perspective. Employers must now attempt to reconcile the Court’s decision with a maze of federal and state statutes and regulatory agencies protecting pregnant workers from discrimination and retaliation.

Young v United Parcel Service, U.S. Supreme Court, March 2015

 

Long Term Incentive Plan May Be An Enforceable Contract Instead of A Unilateral Expectation

A Long term incentive plan was offered to select employees to prevent them from quitting when certain corporate decisions changed the nature of employer's business. The court held that it was error to grant summary judgment in favor of the employer in an action for accounting and breach of contract based on conclusion that a long term incentive plan on which action was based was not a binding contract, but merely a unilateral expectation. -- Whether transmission of the plan to plaintiff constituted a continuing offer to avoid plaintiff's resignation and whether plaintiff's continued employment was a continuing acceptance of the offer are factual issues which preclude entry of summary judgment in favor of employer -- The fact that the plaintiff did not sign plan was not dispositive.

Florida law has long recognized that statements in employee handbooks, policy statements, or procedure manuals do not constitute the terms of a contract of employment and thus do not give rise to enforceable contract rights. However, an enforceable contract right may arise if a statement induces an employee to refrain from performing an action separate from their normal contractual duties. The unique facts alleged in this case require reversal of summary judgment in favor of the employer because material facts remain in dispute concerning the intent of the parties regarding a compensation plan: whether the intent of the plan was to merely induce employees to work hard or was to induce employees to refrain from exercising their right to terminate employment

MARGARET TURTON v. SINGER ASSET FINANCE COMPANY, L.L.C., RADIAN GROUP, INC., and HOWARD WEINBERGER, Appellees. 4th District. Case, 38 Fla. L. Weekly D1883a September 4, 2013. Palm Beach County, Florida.

 

Asset Purchaser Also Bought FLSA Liability


A decision from the Seventh Circuit U.S. Court of Appeals (with jurisdiction over Illinois, Indiana, and Wisconsin) offers an important reminder to employers about the potential for successor liability under the federal Fair Labor Standards Act.

In Teed v. Thomas & Betts Power Solutions LLC, a company that acquired another business's assets at a receiver's auction was held to be responsible for paying a $500,000 settlement reached in an FLSA lawsuit between the predecessor business and its employees. The acquiring company knew about the FLSA lawsuit prior to the asset acquisition and specifically disclaimed liability for the lawsuit as a condition of the asset-transfer agreement.

Contractually Disclaiming Liability Was Not Enough

The court first said that a multi-factor federal analysis trumps state law in FLSA cases involving possible successor liability. It also saw the "default rule" as being that a predecessor's FLSA liability should normally be imposed upon the successor, unless there are good reasons not to do this.

And in what is perhaps one of the most-instructive aspects of the decision for other employers, the court ruled that an explicit contractual disclaimer of the FLSA liability was not a good enough reason standing alone to avoid the default rule. The court concluded among other things that, if an acquiring employer could contractually disclaim liability in this fashion, the "statutory goals" of the FLSA would be frustrated, and "a violator of the Act could escape liability or at least make relief much more difficult to obtain." The court also rejected a variety of other arguments to the effect that finding successor liability would be inequitable or economically unwise.

Due-Diligence Prior to Acquiring Assets

This case demonstrates that employers should carefully analyze any potential FLSA successor liability in evaluating whether and upon what terms to acquire another company. While the decision might at first appear to discourage due-diligence on this score - the court referred to the acquirer's knowledge of the pending FLSA lawsuit as favoring successor liability - this would not be the wisest approach. For one thing, the opinion addressed some circumstances under which a court might decide not to impose successor liability even if the acquirer had such knowledge.

The more prudent course would instead seem to be to determine early on whether potential FLSA liability exists, and then to consider the prospects for successor liability under the specific facts presented, what might be done to decrease the chances that successor liability would be found, and whether the acquisition might be structured in such a way as to provide a financial cushion if successor liability is imposed. The employer can then give these matters informed consideration in evaluating the overall risks and benefits of proceeding with the transaction.

Brian Teed et al v Thomas & Betts Power Solutions LLC U.S. Ct of Appeals 7th Circuit (Wisconsin) 12-2440, 12-3029 (Mar 26, 2013)

Teed v. Thomas & Betts Power Solutions LLC

 

Court Orders Hawaii Company and Its Owner to Pay Over $190,000 for Age Discrimination


REPORT FROM THE U.S. Equal Employment Opportunity Commission — Hawaii Healthcare Professionals, Inc. – also known as Hawaii Professional HomeCare Services, Inc. – and its owner have been ordered to pay $193,236 to a woman allegedly fired due to her age, in a default judgment awarded by U.S. District Judge Alan C. Kay in Hawaii.  The judgment resolved an age discrimination lawsuit filed by the EEOC against the Honolulu-based home health care services company in 2010.

The company’s owner, Carolyn Frutoz-De Harne, ordered the 2008 termination of Debra Moreno, a then-54-year-old office coordinator at its Maui facility. The termination proceeded despite reports by the facility’s manager, who actually hired and supervised Moreno, that Moreno was a thorough and efficient worker.  Frutoz-De Harne allegedly ordered that Moreno be fired after telling the manager that Moreno “looks old,” “sounds old on the telephone,” and is “like a bag of bones.”  Frutoz-De Harne also allegedly told the manager that Moreno was not the type of person she wanted representing her company, the EEOC said.  After the termination, the manager reported the ageist comments to Moreno, who in turn filed a discrimination charge with the EEOC.

Following an investigation, the EEOC filed suit against Hawaii Healthcare Professionals in U.S. District Court.  The EEOC charged that the conduct was a form of age discrimination, which violates the Age Discrimination in Employment Act (ADEA).

In addition to the monetary award for Moreno, the judgment also requires that the defendants prevent future age discrimination and retaliation by developing and disseminating procedures to address such claims and training all staff on their rights with respect to age discrimination and retaliation, with additional training for supervisors on how to deal with complaints.  The defendants also must retain an outside equal employment opportunity (EEO) coordinator to assist with these efforts and post a notice for employees regarding the judgment.  The EEOC will monitor compliance with the judgment.

 

 Debra Moreno (the claimant)

“When I learned that my age was the reason for the disparaging remarks and termination, I was embarrassed and demoralized.  For me, it was the ultimate blow.  Age had never before been a consideration for me,” said Moreno.  “The court's decision makes me feel optimistic and vindicated.  I am really grateful that the EEOC exists to help people like me.”

Anna Y. Park, regional attorney for the EEOC’s Los Angeles District Office, which oversees the agency’s litigation in Hawaii, said, “Age should never be a factor when evaluating an employee or job applicant’s worth.  What makes this case especially appalling is the flagrant disregard for a worker’s abilities, coupled with disparaging ageist remarks and thinking.  The EEOC will not tolerate such violations of civil rights law and is pleased by the court’s decision.”

Timothy Riera, director of the EEOC’s Honolulu Local Office, added, “Employers should ensure that equal opportunity is available for all applicants and employees, regardless of age or any other legally protected basis.  Employers should have a strong anti-discrimination policy and offer training to reinforce the goal of equal opportunity and to prevent future civil rights issues from arising.”

The EEOC enforces federal laws prohibiting employment discrimination.  District of Hawaii (EEOC v. Hawaii Healthcare Professionals, Inc. a/k/a Hawaii Professional HomeCare Services, Inc., Case No. CV-10-00549 BMK), and subsequently added Frutoz-De Harne as a named defendant (July 2012).

 

 

DISCRIMINATION:
Anti-Semitic Comments Directed At Non-Jewish Employee Were Actionable


In this case a New Jersey appellate court held that anti-Semitic comments by two supervisors to a non-Jewish employee whom they allegedly perceived to be Jewish, including a comment that "if you were a German, we would burn you in the oven," were actionable by the employee in a hostile work environment claim under the Law Against Discrimination. The proper question as to actionability was what effect the derogatory comments would have on a reasonable Jewish listener, rather than on a reasonable person of the employee's actual background. The comments could not but have caused a reasonable Jewish listener to harken back to thoughts of the Holocaust.

In his complaint, filed on December 18, 2008, plaintiff alleged the continual utterance of explicit slurs about Jews directed toward him from January 2007 up to May 28, 2008. But in a response to plaintiff's demand for admissions, dated December 16, 2009, defendants denied that: “One or more of the defendants on one or more occasions made jokes or derogatory comments about Jews while the plaintiff was employed by the defendants.” However, on March 15, 2010, in response to defendants' demand for production of documents, plaintiff produced DVDs that contained video-recordings of the use by Defendants Unangst and Gingerelli of the following comments in plaintiff's presence: “Jew Bag,” “Fuck [ ] you Hebrew,” “Jew Bastard,” “Where are [you] going, Jew,” “I have friends in high places, not in fucking temple,” “Jew Shuffle,” “If you were a German, we would burn you in the oven,” “We have Jews and Niggers that work here,” and “Only a Jew would argue over his hours.” Plaintiff claimed in his deposition that such remarks occurred on a daily basis and were made in front of people coming to service the company's equipment and delivery persons. Plaintiff testified that both Unangst and Gingerelli believed that he was Jewish, and because of their comments, several other employees did, as well.


Cowher v. Carson & Roberts, Superior Court of New Jersey, Appellate Div. April 18, 2012,
Sussex County, Docket No. L–867–08

 

Dollar Store Manager Qualified As "Executive" -  Exempt From FLSA Overtime Requirements

Granting summary judgment for the defendant employer in this case, the trial court concluded that a dollar store manager qualified as an "executive" exempt from overtime requirements under the Fair Labor Standards Act ("FLSA").


The "salary basis" test was satisfied, under both pre-2004 and current regulations, by her salary as manager which began at $545 per week and was increased to $635 per week. The "primary duty" test was also satisfied, as she regularly performed the majority of management activities enumerated in the regulations and her performance of concurrent duties was not contrary to application of the exemption. Furthermore, her managerial duties were more important than other duties she performed, she was relatively free from supervision during the relevant time period, she earned significantly higher amounts on an hourly basis than nonexempt workers, and she exercised discretion virtually every day and all day long in her capacity as store manager. She customarily and regularly directed the work of two or more other employees, as store records reflected that she managed at least 80 employee hours 97.54% of the time she was store manager during the relevant time period. Finally, her recommendations as to hiring and promotion of other employees were given particular weight.


Grace v. Family Dollar Stores, Inc.
No. 3:08 MD 1932. U.S. Dist Ct, WD, North Carolina, Charlotte Division, Feb. 27, 2012.

 

Employer Not Liable Under FLSA For Overtime Work- As To Which It Had No Actual Or Constructive Knowledge

 
Susan Kellar brought this suit against her former employer, Summit Seating, claiming that she was entitled to overtime under the Fair Labor Standards Act ("FLSA") for work performed prior to the official start of her work shift.
Summit is a small company that manufactures seating for buses, trucks, and vans. In 2001, Kellar began working for Summit as a cutter's helper, and in 2004 she was promoted to sewing manager. In that capacity, she was responsible for supplying sewers with their sewing products, tracking supplies, ensuring that work was completed on schedule, and training junior employees. Kellar managed between seven and eight employees, and was paid on an hourly basis.


In her deposition, Kellar claimed that she regularly arrived at Summit's factory between 15 and 45 minutes before the start of her 5:00 a.m. shift. When she arrived before or at the same time as her sister and co-worker, Mamie Spice, Kellar spent about 5 minutes unlocking doors, turning on lights, turning on the compressor, and punching in on the time clock. Then she prepared coffee for the rest of Summit's employees, which took her about 5 minutes. Depending on her work-load, she spent 5 to 10 minutes (or longer) reviewing schedules and gathering and distributing fabric and materials to her subordinates' workstations, "so that they could go straight to work, rather than waiting for [her] to bring [fabric] to them." For another 5 minutes, she drank coffee and smoked a cigarette. The remaining time was spent performing "prototype work" (preparing models for production), cleaning the work area, or checking patterns. According to Kellar, no one told her that she needed to come in before her shift, but she arrived early because it would have been "a hassle" to show up at 5:00 a.m. and still get her subordinates up and running close to the start of their 5:00 a.m. work shifts. Kellar's time cards reflect that she often punched in early, although on those days when she forgot to clock in, Kellar would write the official start time of her shift on her time card.


If Kellar arrived early in order to work, her supervisors, Ray and Sue Fink, who were the owners and the president and vice-president of Summit, respectively, never personally observed it. They typically arrived at the factory after Kellar, between 7:00 and 8:00 a.m. Kellar testified that she had a good relationship with the Finks and felt "comfortable going to them with problems." Kellar was also aware that Summit had a policy (outlined in its employee handbook) requiring employees to request pre-approval to work overtime. Even so, Kellar never told the Finks that she was working before the start of her shift. She also never reported errors with her paychecks, requested overtime pay, or mentioned during the weekly production meetings she attended with the Finks that her schedule needed to be adjusted to account for her pre-shift work.


In February 2009, Kellar voluntarily resigned and later brought this suit. The district court granted summary judgment in favor of Summit, because it found that Kellar's pre-shift activities were "preliminary," that any work Kellar performed before her shift was "de minimis," and that Summit did not know that Kellar was engaging in pre-shift work. While dis-agreeing with the district court's conclusions regarding the "preliminary" and "de minimis" nature of Kellar's pre-shift work, the Seventh Circuit affirmed, concluding that Summit did not know or have reason to know that Kellar was work-ing before her shift.

 Kellar v. Summit Seating Inc., Appeal from US Dist Ct for Northern District of Indiana (7th Circuit) No. 11–1221.
Argued June 3, 2011. Decided Dec. 14, 2011.

 

Despite Employee's Retaliation claims, a Florida County - was entitled to Summary Judgment due to Insubordination

  A Florida county was entitled to summary judgment on a terminated employee's retaliation claims under Title VII, The American with Disabilities Act (ADA) and the Florida Civil Rights Act (FCRA). Even if the employee established a prima facie cse of retaliation under those statutes, the county's proffered reason for her termination, insubordination based on her refusal to sign a release allowing the doctor who was to perform her fitness-for-duty examination before her return following medical leave access to her medical records, was legitimate and nonretaliatory. The employee failed to show that reason was a pretext for retailiation. The court held: 

 

 

 

  (1) employee's sex discrimination claims under Title VII and FCRA were barred by her failure to bring suit within 90 days from receipt of Notice of Rights Letter or to present any evidence demonstrating that time should be tolled; (2) employee's race discrimination claims were not administratively exhausted; (3) employee could not bring claim against county under § 1981 for allegedly violating Title VII; (4) even if employee established prima facie case of retaliation under Title VII, ADA, and FCRA, county's proffered reason for her termination was legitimate, nonretaliatory, and nonpretextual; and (5) employee failed to establish prima facie case of disability discrimination under ADA or FCRA.

Lyons v. Miami-Dade County --- F.Supp.2d ----, 2011 WL 2419464 S.D.Fla.,2011 June 03, 2011

 

Supreme Court Rules 1.5 Million Female Employees Of Wal-Mart Cannot Proceed With Class Action Discrimination Lawsuit

Current or former employees of Wal-Mart brought this suit against the company for, among other remedies, punitive damages, and backpay, on behalf of themselves and a nationwide class of some 1.5 million female employees, because of Wal-Mart's alleged discrimination against women in violation of Title VII of the Civil Rights Act of 1964. They claimed that local managers exercise their discretion over pay and promotions disproportionately in favor of men, which has an unlawful disparate impact on female employees; and that Wal-Mart's refusal to cabin its managers' authority amounts to disparate treatment.

The District Court certified the class, and the Ninth Circuit substantially affirmed.

The Supreme Court revered, holding that the plaintiff class was not consistent with the relevant applicable federal rules of civil procedure.

The decision rested on two grounds: lack of commonality of questions of law or fact, and the existence of claims for backpay that were not incidental to the declaratory and injunctive relief sought by the plaintiffs and that would require individualized determinations. The Court was unanimous regarding the latter ground, but four Justices would have stopped there and would not have reached the question of commonality.

Rule 23(a) of the Federal Rules of Civil Procedure imposes four initial requirements for class certification: (1) that the class is so numerous that joinder of all members is impractical; (2) that there are questions of law or fact common to the class; (3) that the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) that the representative parties will fairly and adequately protect the interests of the class. Class certification is also dependent on satisfying at least one of the three requirements listed in Rule 23(b). At issue in this case was Rule 23(b)(2), which applies when the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.

The district court certified a class, and a divided en banc Ninth Circuit substantially affirmed the certification order, but excluded putative class members who were no longer Wal-Mart employees when the complaint was filed. Certiorari was granted.

Writing for the Court, Justice Scalia first addressed the commonality requirement under Rule 23(a)(2). The plaintiffs had not provided significant proof that Wal-Mart operated under a general policy of discrimination, he said, and Wal-Mart's announced policy prohibited sex discrimination. While the plaintiffs presented evidence that Wal-Mart allowed local supervisors to exercise discretion over employment matters, there was no showing of a common mode of exercising that discretion that pervaded the entire company, which operated more than 3,400 stores. The plaintiffs relied in part on a sociological expert's "social framework" analysis, and the expert's testimony that Wal-Mart had a "strong corporate culture" that made it "vulnerable" to gender bias. Assuming that this testimony was sufficiently reliable to be admissible as expert testimony, the expert could not specify how regularly stereotypes played a meaningful role in employment decisions at Wal-Mart. Justice Scalia wrote: "In a company of Wal-Mart's size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction."

Statistical and anecdotal evidence offered by the plaintiffs, showing disparities between men and women with respect to pay and promotion to management positions, did not identify a specific employment practice, much less one that tied all of the putative class claimants' 1.5 million claims together, Justice Scalia stated. "Merely showing that Wal-Mart's policy of discretion has produced an overall sex-based disparity does not suffice," he added.

Turning to the issue of whether the claims for backpay precluded class certification under Rule 23(b)(2), Justice Scalia said the Court had previously expressed serious doubt about whether claims for monetary relief may be certified under that provision. The Court was now holding, he wrote, that "they may not, at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief" sought by the plaintiffs.

Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class, Justice Scalia said, and it does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of monetary damages. Rather, individualized claims for monetary relief belong in Rule 23(b)(3), which requires that the questions of law or fact common to class members predominate over any questions affecting only individual members.

Wal-Mart Stores, Inc. v. Dukes, Supreme Court of the U.S. June 20, 2011

 

__________________

Plaintiff Was Bona Fide Administrative Employee Exempt From Overtime Compensation

  Affirming the trial court's grant of summary judgment in this case asserting a claim for unpaid overtime compensation, the Seventh Circuit held that the plaintiff was exempt from the Fair Labor Standards Act ("FLSA") overtime provisions as a bona fide administrative employee. The court concluded in principal part that the plaintiff's primary duty was directly related to the general business operations both of her employer and of the employer's customers, as required under the applicable regulations governing the exemption:

The Fair Labor Standards Act, establishes a federal minimum wage and also-critical to this case-requires employers to pay their employees 150 percent of their hourly wage for hours worked above 40 a week. But the Act denies this entitlement to "any employee employed in a bona fide executive, administrative, or professional capacity."

The plaintiff was an account manager for a company (the defendant, MediaBank) that provides computer software to advertising agencies; she acted as a bridge between the software developers and the customers, helping to determine the customers' needs, then relaying those needs to the developers and so assisting in the customization of the software, and finally helping the customers use the customized software. The district court rejected her overtime claim on summary judgment.

The claim relies heavily on the Department of Labor's regulation-29 C.F.R. Part 541-that seeks to explain "administrative capacity." The term is not self-defining. The regulation provides that to be deemed to be employed in an administrative capacity the employee must be paid more than $455 a week, and his "primary duty" must be both "the exercise of discretion and independent judgment with respect to matters of significance," and "the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers." The regulation instances, as employees whose work may be directly related to a customer's business, ones "acting as advisers or consultants to their employer's clients or customers."

The regulation's "primary duty" provisions, which we just quoted, are pretty vague, as is the further provision that "to meet the requirement that the employee's primary duty be directly related to management or general business operations, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment." Notice the gap: employees who don't perform work directly related to assisting with the running or servicing of the employer's or its customers' business are not necessarily employees who "for example" work on an assembly line or work in a retail store as a salesperson.

Yet one sees what the regulation is getting at: a legal requirement to pay a worker a fixed percentage increase in his hourly wage if he works more than 40 hours a week doesn't fit a worker who spends much of his work time off the employer's premises, where he can't be supervised and so if entitled to overtime would be tempted to inflate his hours. This is particularly true if, as the regulation also requires, the work involves the exercise of independent judgment relating to management or general business operations, especially the business operations of a customer. An employer will be hard pressed to determine how many hours an employee should need to complete a particular job much of which is performed on the premises of a different company. Employees tasked with jobs requiring the exercise of independent judgment usually are expected to work with a minimum of supervision even when they are working in their office rather than on a customer's premises.

It might seem that in any event a requirement of additional compensation for overtime couldn't sensibly be applied to workers, such as the plaintiff in this case, whose hours of work vary from week to week, regardless of the nature of their work or where it is performed-a worker who worked 20 hours in one week and 60 in the next would have to be paid more than one who worked 40 hours both weeks. But the statute and regulation offer solutions for the "fluctuating hours" problem. So it does not figure in our analysis.

Still it is apparent that our plaintiff is a picture perfect example of a worker for whom the Act's overtime provision is not intended. MediaBank, the employer, is in what is called the "media buying" business. It produces software programs that help advertising agencies place advertising in the media. The software is complex; "advertising today deals with an endless number of touch points that interconnect in ways we couldn't imagine as recently as five years ago. Those changes create enormous challenges in terms of managing data and workflow: if I'm a media buyer, I suddenly need to sync mobile buys with outdoor ads, and search inventory with TV spots. If I'm a vendor, I'm working under ever greater pressure to generate greater revenue from ads-while buyers are pulled in endless directions toward multiple channels, and potentially away from my inventory."

Searching the Web for media outlets for advertisers, negotiating with media companies, and evaluating the effectiveness of media advertising purchases in promoting a seller's products or services-all these tasks are integrated in the software that MediaBank sells advertising agencies to give agency staff access to the full range of the agency's activities on its computer screens. The software is complex because it integrates so many functions, and it must be customized to the needs of each client, which vary. The complexity and variance are where the account manager comes in. The manager of a customer's account has to learn about the customer's business and help MediaBank's software engineers determine how its software can be adapted to the customer's needs.

The account manager is not a salesman for Best Buy or a technician sitting at a phone bank fielding random calls from her employer's customers-instead she's on the customer's speed dial during the testing and operation of the customer's MediaBank software. As the intermediary between employees of advertising agencies struggling to master complex software and the software developers at MediaBank, she has to spend much of her time on customers' premises training staff in the use of the software, answering questions when she can and when she can't taking them back to MediaBank's software developers, and then explaining their answers to the customer and showing the customer how to implement the answers in its MediaBank software. Identifying customers' needs, translating them into specifications to be implemented by the developers, assisting the customers in implementing the solutions-in the words of MediaBank's chief operating officer, account managers are expected to "go out, understand [the customers' requirements], build specifications, understand the competency level of our customers. Then they will build functional and technical specifications and turn it over to ... developers who will then build the software, ... checking in with the account manager, making sure what they are building is ultimately what the customer wanted."

Thus the plaintiff's primary duty was directly related to the general business operations both of her employer and (as in a consulting role) of the employer's customers. It is true that the regulation, only a few provisions of which we have quoted (it goes on and on), lists a number of "administrative" functions that the plaintiff did not perform, such as negotiating contracts with MediaBank's customers. But below the highest executive level a modern business is a congeries of specialists. The plaintiff could not have performed her job as the intermediary between developers and customers had she also been negotiating contracts.

Penny Verkuilen v. MediaBank, LLC Appeal from US District Court for the Northern District of Illinois to the US Court of Appeals, 7th Circuit, May 27, 2011

 

The Cat's Paw Theory of Liability


The recent Supreme Court ruling, Staub V. Proctor Hospital, established a new way for employers to face lawsuits.  It’s called the “cat’s paw” theory of liability. And this cat’s paw has claws — because it opens the door for increased discrimination and retaliation claims.

Here’s an example…a manager tells you an employee has been disciplined and requests termination. You trust your manager’s judgment, and terminate the employee. Unbeknownst to you, that manager has been discriminating against the employee.

This ruling now makes it possible for the employer to be held liable for innocently taking into account adverse information provided by the manager.  And although Staub V. Proctor Hospital was decided under USERRA, the cat’s paw theory will likely apply equally to Title VII and other laws prohibiting discrimination, making the case even further-reaching. According to Justice Scalia in this landmark decision, "We consider the circumstances under which an employer may be held liable for employment discrimination based on the discriminatory animus of an employee who influenced, but did not make, the ultimate employment decision."

VINCENT E. STAUB v. PROCTOR HOSPITAL ( No. 09-400 ) 560 F. 3d 647, Supreme Court of the Unites States, March 1, 2011

 

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Retaliation includes any complaint, including internal complaints, whether written or oral.


Fair Labor Standards Act -- Retaliation -- Oral, as well as written, complaints of a violation of FLSA fall within scope of phrase “filed any complaint” in Act's antiretaliation provision, which forbids employers to discharge or in any other manner discriminate against any employee because such employee has filed any complaint.  On December 6, 2006, Saint-Gobain suspended Kasten on the ground that he had violated its policy regarding time clock punching for the fourth time.   Kasten claims that at a meeting regarding this suspension, he again verbally told his supervisors that he believed the location of the clocks was illegal and that if he challenged the company in court regarding the location of the clocks the company would lose.   Saint-Grobain disputes that Kasten complained about the time clocks at this meeting.   On December 11, 2006, Human Resources Manager Dennis Brown told Kasten over the phone that Saint-Gobain had decided to terminate his employment. The majority of circuit courts considering the question have also found that “any complaint” includes internal complaints (whether written or oral).  
KEVIN KASTEN, Petitioner v. SAINT-GOBAIN PERFORMANCE PLASTICS CORPORATION. U.S. Supreme Court. No. 08-2820.

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U.S. Supreme Court Rules to Protect Employee’s Family from Retaliation


The Supreme Court on January 31, 2011, ruled in a unanimous 8-0 decision in Thompson v. North American Stainless that Title VII of the 1964 Civil Rights Act, which protects employees against job discrimination, forbids an employer from firing the fiancé of an employee as retaliation for her complaining about sexual discrimination.

Eric Thompson was fired a few weeks after his fiancée filed a sex discrimination charge with the Equal Employment Opportunity Commission (EEOC) against their mutual employer, North American Stainless. The 6th Circuit Court of Appeals ruled that Thompson did not have the right to bring a retaliation suit under Title VII because he was not the one targeted by sex discrimination.

But the Court reversed this decision, holding that Thompson fell within the “zone of interests protected by Title VII.”  Justices Ginsberg and Breyer in a concurring opinion emphasized that the EEOC has long stipulated that Title VII prohibits retaliation against close associates of a person seeking to file a discrimination complaint.

The Thompson decision makes progress in protecting “persons aggrieved” by unlawful retaliation.


FLSA Preempted “Release And Waiver Of Overtime Compensation”

In this suit for overtime wages, the United States District Court held that the Fair Labor Standards Act (“FLSA”) preempted a “Release and Waiver of Overtime Compensation” signed by an in-store sales clerk at a cellular telephone store. The agreement provided no overtime compensation  even though it guaranteed that the employee's hourly rate for all hours worked, including any hours in excess of 40, plus commission would meet or exceed what she would be entitled to receive for overtime compensation under the FLSA. Instead, it expressly stated that the employee waived her right to any overtime compensation. However, under the FLSA an employee cannot contractually waive his or her right to overtime pay. The employee was thus entitled to partial summary judgment that the agreement did not bar her claim for overtime pay.

Yudarmi FUENTES, and all others similarly situated, Plaintiffs, v. CAI INTERNATIONAL, INC., a Florida corporation, and Avelino A. Vega, individually, Defendant, United States District Court, S.D. Florida. No. 09-21931-CIV. July 26, 2010.

 

Employee’s non payment of taxes and being an illegal immigrant did not preclude his filing wage claim under FLSA

A Florida party planning company that provided tents, chairs and tables for events in and outside Florida was not entitled to summary judgment in an employee's Fair Labor Standards Act (FLSA) action, on any of the six grounds it raised. The employee's status as an illegal immigrant did not bar him from suing, nor did the fact he had not paid federal income taxes. A fact issue existed as to whether one of the brothers who coowned the business was an "employer" under the FLSA. Disputed issues of fact also existed as to whether the employee qualified for FLSA individual coverage and whether the defendants qualified for FLSA enterprise coverage. Summary judgment was precluded on employee's FLSA claims against Florida party planning company.

The District Court, Hon. Cecilia M. Altonaga, held that: (1) employee's suit was not barred because he was illegal immigrant; (2) in pari delicto doctrine did not bar employee's suit because he had not paid federal income tax on his earnings; (3) fact issue existed as to whether one of the brothers was an “employer” under the FLSA; (4) employer's records were not proper and accurate, so preponderance of the evidence standard of proof would not apply; (5) relaxed employee could prove damages under relaxed burden-shifting scheme; (6) fact issue existed as to whether employee qualified for FLSA individual coverage; and (7) fact issue existed as to whether defendants qualified for FLSA enterprise coverage.

Solano v. A Navas Party Production, Inc. 2010 WL 2949606 July 26, 2010 S.D.Fla.,2010.

 

Employee’s Deficient Performance Rather Than His Age Was the Reason Behind His Termination

Robert Senske was fired from his position as a high-ranking sales manager with Sybase, Incorporated. Senske was hired when he was 55 years old, and he was 58 years old on the day he was fired. Sybase said it fired Senske because a client complained about his performance and because he was dilatory in completing required paperwork, was persistently tardy for meetings, and was not a team player. Senske said he was fired because his manager considered him too old.

Senske sued Sybase under the Age Discrimination in Employment Act (“ADEA”), alleging that Sybase concocted fictional reasons to fire him in an attempt to disguise age discrimination. The district court concluded that no reasonable jury could find that discrimination, rather than Senske's performance deficiencies, was the root cause for Senske's termination and granted summary judgment to Sybase. On appeal, the Seventh Circuit affirmed, agreeing with the district court's conclusion that no reasonable jury could find that his age was the real reason behind Senske's termination.

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