Outten & Golden: Empowering Employees in the Workplace

Defense Attorneys Make Excuses, But the Outcome is the Same

October 1st, 2008 | Paula Brantner

When attending the American Constitution Society’s panel following the release of Schwab and Clermont’s seminal report, Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse?, I was expecting the defense representative on the panel to attempt to explain away the results (even in the midst of what has to be silent glee that their side is winning so handily). But no explanation the other side can come up with puts a dent in the basic premise of the report: employment discrimination plaintiffs have it worse than other kinds of plaintiffs in our federal courts.

Cyrus Mehri’s excellent testimony before the Senate Judiciary Committee (Part I, Part II) lays out the new report’s three basic premises:

  • When employers win at trial, they are reversed by the U.S. Courts of Appeals 8.72% of the time. When employees win at trial, they are reversed 41.10% of the time.
  • There has been an absolute drop in employment discrimination cases of 37% from fiscal 1999-2007.
  • Juries rule in favor of plaintiffs in job cases 37.63% of the time versus 44.41% in non-job cases. District court judges, however, rule in favor of jobs plaintiffs only 19.62%, while ruling in favor of non-jobs plaintiffs 45.53% of the time.

Rather than dealing with why federal district court and appeals court judges might be biased, I guess it’s easier to try to explain away the absolute drop in cases.  And if you’re a defense lawyer, you might try to explain in a way that doesn’t implicate the other two findings, as if the fact that plaintiffs have difficulty winning before trial court judges, and hanging onto even the successes upon appeal, doesn’t have anything to do with it.

Instead, we’re expected to believe some of the following excuses, according to Eric Dreiband, former general counsel of the EEOC, who is now back to representing defendants at Jones Day.  (Listen to Dreiband’s presentation; Windows Media Player required). And another defense-oriented article responding to the study repeats some of the same excuses.

1.  Plaintiff’s attorneys are taking more wage and hour cases under the FLSA.

There has admittedly been a rise in the number of wage and hour cases, especially class actions, brought under the Fair Labor Standards Act in recent years.  Depending on who you ask, there are varying reasons for that, whether it’s because employers are trying to cut corners by misclassifying employees, there’s an increased awareness of the FLSA among workers, making it more likely they’ll ask questions about their classification, or if, as plaintiffs’ attorneys will acknowledge, it’s an act of self-preservation because of the three points detailed above.  Bringing a case under a statute that doesn’t require evidence of intent can be a lot easier than bringing a discrimination case:  either an employer violated the FLSA or it didn’t, and it doesn’t matter what it intended to do as it does in discrimination cases.

But this point is almost irrelevant if you’re one of the hapless plaintiffs with a discrimination case, not a wage and hour case.  Defense attorneys aren’t arguing that it’s impossible for plaintiffs with strong discrimination cases to get a lawyer, because all of the skilled plaintiffs employment lawyers no longer have time to take them, because that’s simply not true.  Bottom line:  the fact that there are now more FLSA cases doesn’t detract at all from the premise that employment discrimination plaintiffs have it bad.  They’re two completely different things that both happen to affect workers.

2. More cases are ending up in arbitration, instead of the courts.

Certainly, there are employers who believe that requiring all of their employees to submit their employment claims to arbitration benefits them, and they’re probably right. As Paul Bland’s excellent blog post reminds us,

“If you want to work here,” millions of employees are told, “you have to agree that any disputes you have with us–even if we cheat you, even if we break our contract or break the Fair Labor Standards Act or a basic civil rights act–will be submitted to binding arbitration with an arbitrator who is chosen by an arbitration company whom we pick. If you don’t like it, you can’t work here.”

Plenty of evidence suggests that just like what’s happening in federal court, employees forced into the arbitration process don’t fare very well. (See Alexander Colvin, Empirical Research on Employment Arbitration: Clarity Amidst the Sound and Fury?, Employee Rights and Employment Policy Journal, Vol. 11, No. 2 (2007). In fact, employees forced into arbitration may fare worse there than they do in court, according to Colvin’s piece, the leading academic study of thousands of publicly reported employment cases in arbitration. So again, the fact that more employees have cases in arbitration instead of federal court hardly contradicts the conclusions of the Schwab and Clermont study, when the evidence shows that plaintiffs forced into arbitration are even worse off there than in court.

3. More plaintiffs are going to state court instead of federal court.

In many states, plaintiffs in discrimination cases have the option of choosing between state and federal court, and attorneys must make the strategic decision about where the case is most likely to be successful. Admittedly, strategy sometimes dictates that a worker will fare better in state court, in states where there are no damage caps limiting the type and/or amount of damages that can be awarded, and where judges and juries may be more receptive to employment cases than those in federal court, making it more likely that a jury will hear a case rather than have it thrown out on summary judgment.

However, for every state where a plaintiff is likely to fare better in state court, we can name one where they will be worse off in state court, or not have the ability to make that choice at all. Some states don’t even have their own antidiscrimination statutes, or have what’s known as a “private right of action” which allows workers to enforce their rights in court. Others have more restrictive damage caps than those under federal law, which haven’t changed since 1991. (That’s longer than it’s taken to raise the minimum wage, and we know how long that took!) Some state judges are relatively unfamiliar with employment statutes compared to federal judges, and others, forced to rely on campaign contributions, tend to favor those who can contribute the most to their re-election campaigns, while federal judges are appointed for life. Unfortunately, we have a relatively small amount of evidence about outcomes in state courts, but what we do have makes this one a tossup at best.

4. More cases are being resolved by the EEOC pre-litigation.

Of all the excuses proffered, this one had the most potential to persuade us that plaintiffs were actually benefiting. The EEOC has invested heavily in its mediation program which works to resolve claims before they are investigated, or, in some cases, as part of the conciliation process between employer and employee. And Mr. Dreiband, as the EEOC’s former general counsel, was very knowledgeable about the EEOC’s program.

But, as the saying goes, where’s the beef? I asked Mr. Dreiband following his presentation whether the EEOC had studied whether mediation was actually beneficial for plaintiffs in terms of damages awarded. He was unaware of any such studies, and indeed, the studies on the EEOC’s website are limited to the parties’ satisfaction with the process, as well as participating mediators’ evaluation of the program.

Initially, it sounds good when you hear that cases are resolved quickly, and before there is any litigation. Most people just want to move on with their lives, rather than spend years fighting their employer in court. But several aspects of the push to resolve cases so early should give worker advocates pause. A case resolved before any discovery takes place may mean that key evidence that makes the case a valuable one never sees the light of day. A case resolved where the employee doesn’t have an attorney may mean that the employee is outmatched and overcome by the power imbalance on the other side, as rare is the case where an employer wades in to any case without representation. And a process where 13.5% of cases settle for non-monetary compensation makes you wonder just how many people out there are settling for an apology or a good reference, no matter how much they were damaged.

Admittedly, a certain percentage of these cases would have been lost anyway, but settling a case for a token amount of money and an apology may not be much better. Before the EEOC so heavily touts the benefits of mediation, they should study exactly who benefits. Is it the employer who benefits most when litigation goes away quickly and cheaply? We simply don’t know.

So let’s review:  reducing the number of cases in federal court, no matter what the reason, doesn’t:

  • explain why plaintiffs fare so much worse in front of federal district court judges than juries;
  • explain why employment discrimination plaintiffs fare much worse than other plaintiffs on appeal;

And it doesn’t even explain that the reduction in federal court cases means plaintiffs are faring better in other forums. In fact, it may mean that, like the movie “Dumb and Dumber,” Schwab and Clermont’s next report should be called “Worse and Worser.”

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