Employee Terminated Because Of Bankruptcy Gets Right To Trial In Federal Court

I must admit that I don’t ever remember seeing a case involving bankruptcy discrimination — so when I ran across a recent federal court case out of Florida on the subject, it struck me as one well worth talking about.

The case,  Myers v. TooJay’s Management Corporation, is important because there are so few cases on the topic and because bankruptcy affects so many people. The case also highlights some flaws in the statute which could really use a Congressional fix.

What Happened In The Case

Plaintiff Eric Myers filed for Chapter 7 bankruptcy in January of 2008. Around the same time, Myers moved his family to Florida to live with his parents. His debts were fully discharged in May of 2008.

At some point, Myers heard about an opening at one of Defendant TooJay’s restaurants in Sumter County, Florida for a management position.  He called the company contact, Tom Thornton, about the position. Thornton interviewed Myers and the interview went well.

Myers was then scheduled for a two day on the job evaluation which was held at on July 31st and August 1st. During those two days, for which he was paid,  Myers shadowed various employees.became familiar with restaurant procedures.

At the end of the second day, Thornton told Myers that he had performed well and according to Myers, offered him a job.  He was told that he was supposed to start work on August 18, 2008 at a salary of between $50,000 and $55,000 for a 40 hour week.

Thornton contended that he never told Myers he was officially hired, never discussed hours, salary, or a start date.

Thornton contended  he told Myers that any offer of employment was contingent on a background check.

There was no dispute that Thornton photocopied Myers’ drivers license and social security card and had Myers complete and sign several employment forms including :

• an IRS withholding W-4 form

• an order form for TooJay’s uniform and shoes

• a food employee reporting agreement

• an assistant manger trade secret non-disclosure agreement

• an I-9 employment eligibility verification form.

Thornton also gave Myers a copy of TooJay’s employee handbook and sexual harassment policy, and directed Myers to sign forms indicating that he received copies. On each form, Myers signed in the blank listed for “employee signature.”

Myers was also asked to sign a document which permitted TooJay to conduct a background check and consumer credit report check.

After that, Myers notified his then employer that he was resigning so that he could start at TooJay’s.

A little more than a week later, Myers received a letter from TooJay’s stating that it was rescinding its previous offer of employment because of the credit report. He called the Vice President of Human Resources and was told that he was not hired because he had filed for bankruptcy and that TooJay’s, as a matter of corporate policy, did not hire individuals who had a bankruptcy on their credit report.

Myers went back to his prior employer and asked for his job back but it was too late. His work hours had already been distributed to other employees, and he was told that he could only be rehired at a reduced schedule.

According to Myers no one told him that his employment at TooJay’s was contingent on a satisfactory credit report.

Myers filed a complaint in the United States District Court in Florida claiming bankruptcy discrimination in violation of 11 U.S.C s. 525(b).

Issues In The Case

The defendant TooJay filed a motion for summary judgment asking that the case be thrown out on the grounds that:

• the statute only applied to discrimination after an employee was hired

• the statute did not prohibit bankruptcy discrimination with respect to hiring decisions

• Myers was never hired so the statute did not apply

Myers argued that:

• the statue applied to hiring decisions in which an employer refused to hire an individual because of bankruptcy

• the statute applied because Myers had been offered employment,

• he accepted the offer and was terminated because of the bankruptcy

The Court’s Decision

The Failure To Hire Claim

The Court analyzed Section 525 of the Bankruptcy Code which protects individuals from discrimination. 

For whatever reason, there are two different standards in these bankruptcy discriminaion statutes– one for governmental employees [s.525(a)] and one for private employees [s.525 (b)] – and they are different.

The language of the statute regarding governmental employees states that the government :

[M]ay not . .. deny employment to, terminate the employment of, or discriminate with respect to employment against a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act or another person with whom such bankrupt has been associated . . .

Section 525 (b) was enacted several years later. It applies to private employers. Peculiarly, while the topic is the same, the language is different. It states that:

No private employer may terminate the employment of, or discriminate with respect to employment against an individual who is or has been a debtor under this title, a debtor or bankrupt under the bankruptcy Act, or an individual associated with such debtor or bankrupt,….

As the statutory language set forth above indicates, the section pertaining to government employees prohibits an employer from “denying employment” to a person because of bankruptcy.

The section pertaining to private employers does not contain a similar provision.

Therefore, according to the Court,  the section which applies to private employees only prohibits discrimination because of bankruptcy to those already employed.

If Congress intended a different result, the Court reasoned, it would have chosen different words in the statute. (as the opinion points out, only one court has reached a contrary result)

As the opinion states:

Thus by its plain language, the statute does not provide a cause of action against private employers for persons who are denied employment due to their bankrupt status….

In the absence of strong indicia of a contrary congressional intent, [a court should ] conclude that Congress provided precisely the remedies it considered appropriate.

Summary judgment was granted for the defendant TooJay on Myers discriminatory hiring claim.

The Termination Claim

Both parties agreed that terminating an individual’s employment because of bankruptcy status violates 11 U.S.C.s. 525(b).

Meyers argued that an employment relationship with TooJay’s was created on July 31 and August, 1, 2008.  When TooJay rescinded its offer of employment, Meyers claimed, it fired him solely because of his prior bankruptcy in violation of the statute.

TooJay contended that an employment relationship was never created.

The Court found that based on the evidence presented,  the jury could determine that an employment relationship was created.  Important to the Court was proof that:

• Thornton made Myers an unconditional offer of employment
  

• The parties finalized all key employment terms, such as start date, hours of operation,job duties,and salary
  

• Myers signed numerous employee-related forms and received a copy of the handbook

• Myers  actually worked for TooJay’s for two day.

On the other hand, as the Court pointed out TooJay presented evidence through Thornton’s testimony that:

• Myers was never employed by TooJay’s and that
  

• only a conditional offer of employment was made — contingent on a clean background and credit check.

Based on the record and the “material facts in dispute” TooJay’s motion for summary judgment was denied.  Meyers won his right to have a jury hear his claim.

Conclusion

It’s important for all employers to know that it’s illegal to terminate an individual because of an individual’s bankruptcy status.

Hiring decisions are more problematic. Government employers can’t refuse to hire a candidate because of bankruptcy. Private employers, according to most courts, are not covered by the bankruptcy statute with respect to offers of employment.  This makes no sense.

In light of today’s economy, with so many Americans sadly having to declare bankruptcy, these statues should be reconciled so that they are consistent.

All employers should be prohibited from discriminating against individuals due to bankruptcy with respect to all aspects of employment. Congress should amend the language of S. 525(b) so that private employers can’t refuse to hire someone because of bankruptcy.

After all, aren’t these the folks who desperately need to work and earn some income? Isn’t this why we have bankruptcy discrimination laws?

image: newzar.files.wordpress.com

www.floridabeerfestivals.com

*This post originally appeared in Employee Rights Post on December 15, 2009. Reprinted with permission from the author.

About the Author: Ellen Simon is recognized as one of the first and foremost employment and civil rights lawyers in the United States. With more than $50* million in verdicts and settlements and over 30 years of experience, Ellen has been listed in Best Lawyers in America and in the National Law Journal as one of the nation’s leading litigators. She has been lauded for her work on landmark cases that established employment law in both state and federal court. Ellen also possesses a wealth of knowledge as a legal analyst discussing high-profile civil cases, employment discrimination and women’s issues. Ms. Simon has been quoted often in local and national news media and is a regular guest on television and radio, including appearances on Court TV. She is the author of the Employee Rights Post, a legal blog devoted to employee and civil rights.

*prior results do not guarantee a similar outcome

Workers employed in low-wage and poorly regulated industries (most prominently restaurants, residential construction, domestic cleaning, and mechanics) are confronted with staggering exploitation as employers look to cut corners in today’s recession. Such exploitation includes health and safety violations, discrimination, sexual harassment, retaliation, firing for participating in union activity, and wage theft—failure to pay workers for work performed, including overtime hours and final pay periods.

To combat this wave of illegality, a Chicago worker center has collaborated with a local university to create a map of law-breaking employers against which they have organized, giving workers and activists a powerful visual tool to bring to politicians and the community.

The Arise Chicago Worker Center has no shortage of evidence for the dire conditions facing Chicago’s low-wage workers, having collaborated with over 2,050 workers in the past seven years.

None of the restaurant workers who have contacted our organization during that time received overtime wages. One of our members seriously injured his back at a construction site, but his employer refused to pay legally required workers’ compensation. One African-American member, who works for a state-funded social service agency, has consistently received paychecks one to three weeks late, for more than two years. A group of candy manufacturers were denied bathroom breaks.

Recently, we spoke with a Guatemalan immigrant car wash worker who works from 7 a.m. to 8 p.m., six days a week, for $5.25 an hour. He does not receive overtime pay and takes home an average of $9 a day in tips. If that weren’t enough, the employer does not provide gloves needed for the work, and illegally deducts the cost of the workers’ required uniform from his paychecks.

With the help of the University of Illinois-Chicago Center for Urban Economic Development, Arise has mapped by ward—a political district—the law-breaking employers against which Arise has organized. The maps illustrate law-breaking employers in 43 of Chicago’s 50 wards, affecting workers living in 47 of the wards.

Groups of worker center members plan to meet with their ward aldermen to discuss workplace abuses and enlist support for a city response to the biggest problem facing low-wage workers: wage theft.

Clergy whose congregations are located in the 43 wards will join the workers. Recently, Catholic Bishop John Manz attended a meeting with Alderman Danny Solis in the 25th Ward, where Arise has recorded a dozen labor violations.

Solis committed to introducing the issue to the city council’s Hispanic Caucus, whose wards include great concentrations of Arise membership. Alderman Mary Ann Smith’s office offered to explore legislative strategies that could deny additional business permits to law-breaking employers. Additional meetings and research are planned to determine the best approach to address wage theft in Chicago—which may include a citywide ordinance that could make stealing a worker’s wages treated like other forms of theft.

*This post originally appeared in Labor Notes on December 3, 2009. Reprinted with permission from the author.

About the Author: Adam Kader (www.arisechicago.org) is the director of the Arise Chicago Worker Center, part of the national Interfaith Worker Justice network.

Employee With MS Wins Appeal In Seventh Circuit “Regarded As” Disability Decision

A case was decided by the Seventh Circuit Court of Appeals last week that was an important victory for the employee as well as his lawyers.

In Brunker v. Schwan’s Home Service, Inc. the Court reversed judgment in favor of Schwan’s on Brunker’s disability claim. It also reversed the lower court’s testy imposition of sanctions against Brunker’s lawyers.

What Happened In The Case.

Frank Brunker worked as a delivery driver for Schwan’s delivering frozen food to its customers. In February of 2003, Brunker started experiencing shaking of his hands, slurred speech, dizziness, light headedness, and headaches.

The symptoms continued, Brunker went to the doctor, tests were taken, and Brunker was told that he might have multiple sclerosis.

Brunker went on disability leave for two months. Eventually, he went back to light duty work, and then back to work without any restrictions by his physician. He performed his job and was able to complete his route in the same manner as he had in the past.

Four months later, Brunker told his supervisor that he wanted to go to the Mayo Clinic for some tests. Around the same time, he stared to get written up for various performance issues.

When Brunker returned two weeks later, after being diagnosed with multiple sclerosis, his supervisor fired him citing “unsatisfactory performance” and “unable to perform essential job functions” on the termination form.

(Notably, Brunker’s supervisor backdated the termination form to September 9, the day Brunker left for the clinic and before his diagnosis of multiple sclerosis.)

Brunker filed a claim in federal court for disability discrimination under the Americans With Disabilities Act. The lower court (N.D. Indiana) threw out the case and in an unusual move, sanctioned Brunker’s lawyers because of their discovery requests (attempts to get evidence to prove their case).

The Seventh Circuit Reverses

It would be tempting to go in to all of the reasons why the lower court’s opinion was just flat out wrong, but some of them don’t matter anymore since the Americans With Disabilities Act was amended to prevent precisely this result.

Multiple Sclerosis Is A Disability

The first part of the lower court’s ruling pronounced that Brunker had no claim because he was not disabled. In other words, the fact that he had multiple sclerosis didn’t matter, according to the court — even if that’s why he was fired — because MS was not a disability.

The court’s logic was based on case law developed under the ADA which left millions of people with disabilities unprotected from employment discrimination.

Fortunately,  the ADA was amended this past year. Under the new act, multiple sclerosis would be considered a disability (and should have been under the old act as well) so a judge theoretically should not be able to throw the case out on similar grounds. (the court did not address the amended ADA because the case was filed before it was passed)

(For information on new regulations proposed under the amended ADA see the article in the Connecticut Employment Law Blog)

Being Regarded As Disabled Is A Violation Of The ADA

Under the ADA (both the old act and the new one) a person has a claim for disability discrimination if he or she is subjected to an adverse employment decision because he or she is regarded as disabled.

To prove disability discrimination under a “regarded as” theory the employee can win by proving that:

• The employer mistakenly believes that the employee has an impairment that substantially limits a major life activity, or
  

• The employer mistakenly believes that an existing impairment, which is not actually limiting, does substantially limit a major life activity (functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working)

In this case, the Court of Appeals decided that Brunker presented enough evidence that he was fired because Schwan’s regarded him as being disabled. In reversing the lower court, the Court of Appeals stated:

The record contains adequate evidence to support a theory that Schwan’s regarded Brunker as being disabled in the major life activities of walking, caring for himself, and speaking.

For example, the day before he left for the Mayo Clinic, Schwan”s issued Brunker multiple corrective action reports, including a dress code violation, suggesting that Schwan’s did not believe that Brunker was able to care for himself because of his apparent conditions.

Furthermore, Schwan’s disciplined him even though other employees were not cited for similar violations.

As to Schwan’s motive, the Court of Appeals had this to say:

Schwan’s fired Brunker immediately after he returned from treatment, but Schwan’s backdated the termination notice to before he left for the clinic, evidently hoping to avoid the impression that his apparent condition influenced Schwan’s decision to terminate him.

These facts are sufficient to create a triable question as to whether Schwan’s regarded Bunker as disabled when it fired him.

The Court Reverses Sanctions Against The Lawyers

It’s typical in these kinds of lawsuits for lawyers representing employees to request documents from the employer defendant to either prove their case  or disprove the defendant’s case. It not only typical; it is absolutely allowed the Federal Rules of Civil Procedure.

In what I can only say is a quirky, outlandish, and mean-spirited ruling, the trial court in this case imposed sanctions on Brunker’s lawyers because they pressed to get the information they believed necessary to properly represent their client.

For example, the lawyers asked for records on whether Schawn disciplined other employees who failed to follow its dress code or to keep accurate route books (some of the reasons give for the discharge).

A request to see co-employees personnel files in order to prove unequal  treatment or whether what the company is stating is true (pretext) is quite standard, but in this case the lawyers were sanctioned for making it.

The Court of Appeals reversed, holding that the information was relevant to Brunker’s disparate treatment claim since it related to the even handedness of the company’s expectations.

The Court also criticized the company’s lawyers for refusing to produce the requested documents and then using them to support their defense.

The Court said:

Indeed Schwan’s went further than merely raising an issue it had previously argued was irrelevant.

It faulted Brunker for failing to identify any route manager who had “similar performance issues” and was treated more favorably.

And Schwan’s also discussed the route manager who was terminated for failing to service customers, despite Schwan’s successful opposition to Brunker’s request for his personnel file.

Similarly,  Schwan denied the relevance of the personnel file of another former employee, Mike Devereaux, but then used parts of that file in the summary judgment reply.

Through its actions, Schwan’s concedes that the bulk Brunker’s requests were substantially justified. We therefore vacate the award of sanctions.

Conclusion

This case is a great win for both Mr. Brunker and his lawyers. He obviously had grounds to bring a case claiming that he was terminated because of his disability – and every right to have that case heard by a jury.

As far as the lawyers go, it’s always very difficult to get companies to produce the documents we need to prove our cases. Companies control the records in these cases and they do not give them up easily even when they are plainly relevant.

At the same time there is no doubt that lawyers representing employees have to get those documents both to support our clients claims and test the employers’ defenses. It’s simply a battle that must be fought.

The fact that these lawyers were punished for doing what they needed to do for proper representation of their client is plainly wrong. Fortunately, the Seventh Circuit Court of Appeals agreed.

images: www.pocketyourdollars.com bowtielaw.files.wordpress.com

This post originally appeared in Employee Rights Post on November 1, 2009. Reprinted with permission from the author.

About the Author: Ellen Simon is recognized as one of the first and foremost employment and civil rights lawyers in the United States. With more than $50* million in verdicts and settlements and over 30 years of experience, Ellen has been listed in Best Lawyers in America and in the National Law Journal as one of the nation’s leading litigators. She has been lauded for her work on landmark cases that established employment law in both state and federal court. Ellen also possesses a wealth of knowledge as a legal analyst discussing high-profile civil cases, employment discrimination and women’s issues. Ms. Simon has been quoted often in local and national news media and is a regular guest on television and radio, including appearances on Court TV. She is the author of the Employee Rights Post, a legal blog devoted to employee and civil rights.

*prior results do not guarantee a similar outcome

One of the few openly gay TV anchors in the country–Charles Perez of WPLG in Miami–has filed a charge with the local human rights authority alleging sexual orientation and gender discrimination by station managers that resulted in his demotion from weeknight anchor. Perez says his openly gay news director made comments about his performance and on-air presence that reflected anti-gay animus and that he was treated differently from heterosexual news employees.

According to the intake questionairre filed with the Miami-Dade Equal Opportunity Board–Florida does not protect employees from discrimination based on sexual orientation and so the claim would gay bias claim would be brought under local law–Perez says that beginning in March 2009 he was subjected to bias at the hands of news director Bill Pohovey. The turning point appears to be an e-mail that was distributed by Perez’s ex-partner implying Perez was seeking the assistance of a therapist for issues relating to “gender identity issues.”

The allegations–and they are allegations at this point–suggest that Perez had been criticized for being “too anchor-like” and that he needed to lighten up with his female co-anchor, but then was told he should not interact with his co-anchor like “girlfriends.” He also alleges the news director made comments to him about marriage and family that he would never make to a heterosexual employee.

The complaint paints a picture of the news director showing photographs of “conquests” and talking explicitly about sex at one moment and then suggesting Perez was “too soft” the next.

In a statement from the station, Pohevey said “[a]s a gay man myself, I can safely say the Station does not discriminate against gay people. Charles’ claim that the Station discriminates against gay people is untrue and offensive. WPLG has a reputation of being a leader in this community with a very diverse staff. The Station does not discriminate. The Station will bring the facts out in the appropriate legal forum and fully expects to be completely vindicated.”

At this stage of the game, these are classic “he said, she he said” allegations. Perez provides a lot of evidence of conversations between him and the station and makes a number of inferences about the meaning of those conversations. There isn’t a lot of case law to parse out what is considered evidence of sexual orientation discrimination, although he clearly is making the argument that inferences of him being “soft” and “girlfriends” has homophobic overtones.

It’s also not true that a member of the same protected class–another openly gay man, in this case–cannot also discriminate. From same-sex sexual harassment cases to race discrimination cases, courts have never been persuaded that someone of the same protected class can’t also be a harasser or a discriminatory actor.

michael R. Triplett: Michael Triplett is the president of the Washington, D.C., chapter of NLGJA and a member of the NLGJA Rapid Response Task Force. He is the assistant chief of correspondents for BNA.

This article was originally posted at RE:ACT on August 4, 2009 and is reprinted here with permission fromt he author.

After years of trying to amend the Americans with Disabilities Act of 1990 (ADA
(http://www.eeoc.gov/types/ada.html) to make it more inclusive, in January, the ADA Amendments Act of 2008 (ADAA) (http://www.ada.gov/pubs/ada.htm) went into effect. The ADAA makes it illegal for private employers, state and local governments, employment agencies and labor unions to discriminate against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training, and other terms, conditions and privileges of employment.

In an attempt to make it easier to bring disability discrimination claims under the ADA, the amendment emphasizes that the definition of disability should be broadly interpreted. The Workplace Fairness website has been updated to reflect the changes made to the ADA, at our site’s disability discrimination page: (http://www.workplacefairness.org/disability).

An important component of the ADAA directed the EEOC to make new, broader, and more inclusive regulations to the original act. The effects of this, for the most part, remain to be seen, and will not be fully known until more disability discrimination cases are litigated under the Amendments. However, it is clear that the amendments’ intent will allow for a larger number of affected people to successfully bring forth disability discrimination claims.

The Act’s original intent was to protect those who “[have] a physical or mental impairment that substantially limits one or more major life activities of such an individual.” Since the Act’s inception, this portion of the regulation had been interpreted quite narrowly. In Sutton et al. v. United Air Lines, Inc. (http://www.law.cornell.edu/supct/html/97-1943.ZS.html), the Supreme Court held that
“mitigating measures” used by an employee must be taken into consideration in determining whether one has a disability under the ADA. The Court determined that petitioners, applicants for jobs as airline pilots with uncorrected vision of 20/200, did not qualify as “disabled” under the ADA because the use of mitigating measures (in this case, eyeglasses) could alleviate their poor vision. In Murphy v. United Parcel Service (http://www.law.cornell.edu/supct/html/97-1992.ZS.html), the Court upheld the termination of the plaintiff whom suffered from hypertension because if medicated, Murphy’s hypertension was controlled. Because none of the plaintiffs in either case suffered from physical limitations when using the mitigating measures, they were not determined to be individuals with disabilities.

The amendments direct the EEOC to clarify and expand the definition of substantially limiting impairment. Under the amendments, these criteria are to be interpreted more broadly. Not only are most activities that were previously recognized under the law included (walking, seeing, etc.), but major bodily functions (normal cell growth, bowel, bladder, reproductive functions, and more) are now recognized as “major life activities.” The implications of this are potentially quite sweeping, as diseases which may not have qualified for protection previously may be granted it now. The ADAA does not expressly provide a definition for what constitutes a “major life activity,” but the ADAA unequivocally rejects the notion that major life activities should be limited to those activities which have “central importance” to an individual’s day to day life. People with health issues, such as reproductive disorders or heart disease may now be deemed disabled and, as such, be awarded the protections of the ADA.http://www.advocacyinc.org/index.cfm), properly notes that the draft regulations
would “appear to establish any type of diabetes are a disability,” as the impairments of diabetes affect certain normal life activities. Some examples of this are diabetes affecting functions of the endocrine system, such as insulin production. East notes, “consistent with the ADA Amendments Act’s plain language, the proposed rule says that the ameliorative effects of mitigating measures (other than ordinary eyeglasses or contact lenses) shall not be considered in determining whether an impairment is substantially limiting. Examples in the proposed rule show how this principle would apply to individuals with a variety of impairments, such as diabetes that requires the use of insulin.” Attorney Brian East of Advocacy, Inc (

The new EEOC regulation’s effect will likely be that people with diseases will be held to have a disability under the ADA. In an attempt to broaden protection for individuals with disabilities, some will likely maintain that the new EEOC regulations are overly broad and will result in increased frivolous litigation. It is more likely, however, that the new regulations will simply make it more difficult for employers to successfully discriminate against employees with disabilities, which honors the original intent of the Americans with Disabilities Act.

Imani Webb-Smith: Imani Webb-Smith is a Legal Intern with Workplace Fairness where she writes and edits content on a variety of labor and employment issues. She is currently in her second year at American University’s Washington College of Law.

In this down economy, many employers are undergoing layoffs of workers. Certainly, it can be harder to prove that your termination was discriminatory or retaliatory when many others are suffering the same fate as you are. But ask yourself this: was the layoff legitimately based upon financial reasons, and if so, why were you chosen?

As the California Supreme Court has explained, “Invocation of a right to downsize does not resolve whether the employer had a discriminatory motive for cutting back its work force, or engaged in intentional discrimination when deciding which individual workers to retain and release.” Guz v. Bechtel National, Inc., 24 Cal.4th 317, 358, 100 Cal.Rptr.2d 352 (2000). See also, e.g., Miller v. Fairchild Industries, Inc., 885 F.2d 498, 506 (9th Cir. 1989) (jury could find retaliation in layoff which employer claimed was based on decline in workload, where employee provided contrary testimony and where other employees were not similarly laid off); Cones v. Shalala, 199 F.3d 512, 519-520 (D.C.Cir. 2000) (holding that a jury could have concluded that the agency’s explanation for not promoting the African-American plaintiff, downsizing, was inconsistent with its decision to promote three white co-workers, and hence a pretext for discrimination); Cichewicz v. UNOVA Indus. Automotive Systems, Inc., 92 Fed.Appx. 215, at **5 (6th Cir. 2004) (downsizing explanation insufficient to warrant summary judgment where there was evidence of pretext). If you were chosen for layoff over someone not of your protected classification who was less qualified, then you may still have a viable claim regarding your termination.

In a case in which I argued this last month against a summary judgment and summary adjudication motion, the employer – a relatively small company – laid off five workers, including my client, who was 50 at the time. My client was the only worker of his classification laid off, and a number were retained – including some who were similar in age to my client, and some who were ten or more years younger. I was able to distinguish my client from several workers of similar ages because they worked in different regions (geographically) than he did. Yet, the company was at first unable to present a legitimate, non-discriminatory reason for retaining the younger workers instead of my client. When the company did present reasons other than age, they were only vague and non-specific ones (e.g., management felt that my client would be “less missed”), which (to the extent they meant anything at all) my client could readily refute.

Moreover, there were numerous instances in which a key decision-maker in the layoff had told my client that he felt the company needed to “get younger,” and that older workers cost the company more in benefits and wages, among other statements. This evidence suggests that the company’s weak reasons stated for choosing my client for layoff were just a pretext (or phony reason to cover up) for age discrimination. “With direct evidence of pretext, a triable issue as to the actual motivation of the employer is created even if the evidence is not substantial. The plaintiff is required to produce very little direct evidence of the employer’s discriminatory intent to move past summary judgment.” Morgan v. Regents of University of Cal. (2000) 88 Cal.App.4th 52, 68, 105 Cal.Rptr.2d 652 (citing Chuang v. University of California Davis, Bd. of Trustees (9th Cir. 2000) 225 F.3d 1115, 1127.

Based on the evidence I presented, Bryan Schwartz Law (http://www.bryanschwartzlaw.com/) and my co-counsel learned that the Court intends to deny the company’s effort to defeat the age discrimination claim arising from the layoff, allowing my client to proceed to trial to overturn his termination.

If you are notified of a layoff, think twice before assuming that you are out of options.

Disclaimer: Nothing in this posting is intended in any way to form an attorney-client relationship or any other contract. It is designed solely to provide general information about one area of the practice at Bryan Schwartz Law. Be mindful of any deadlines you have approaching that relate to your legal situation, and make sure that you meet them. Bryan Schwartz Law does not assume any responsibility for advice given regarding any aspect of your case until you have a signed legal services agreement engaging the firm’s representation.

About the Author: Bryan Schwartz is an Oakland, CA-based attorney specializing in civil rights, employment law. Call today – (510) 444-9300 – or send an email: Bryan@BryanSchwartzLaw.com

This article originally appeared in Bryan Schwartz Law on March 31, 2009. Re-printed with permission by the author.

Good luck to anyone who is trying to figure out what is going on with the Gross v. FBL Financial Services case argued in the Supreme Court yesterday. I have been doing this work for three decades and I think it’s almost impossible.

The questions presented are:

1. In a “mixed-motive” age discrimination case — where both legitimate and illegitimate reasons motivated the employment decision, should the employer be permitted to avoid liability if proves that it would have taken the same action anyway?
2. What kind of evidence needs to be presented — direct or circumstantial — to prove a “mixed-motive” case?
3. Does the discriminatory reason need to be a “substantial reason” or “a motivating reason” for the employee to prevail?
4. Which party bears the burden of proof?

The answers turns on whether the Supreme Court will apply the older mixed motive analysis under Price Waterhouse v. Hopkins or the newer standard under the Civil Rights Act of 1991. (”CRA”); or (less likely) whether the Court will overrule Price Waterhouse as requested by the employer-respondent.

In the 1989 Price Waterhouse decision, the plaintiff Ann Hopkins presented direct evidence (as opposed to circumstantial evidence) that she was discriminated against when she was denied a promotion to partnership. The defendant basically said that even though it  may have discriminated,  it would have reached the same result anyway in denying Ms. Hopkins her promotion.

In it’s fractured decision,  the Supreme Court came up with a new way of proving discrimination in what it called a “mixed-motive” case.  Simply said, this new method of proof set forth a complicated and confusing burden shifting framework.

After the Price Waterhouse decision, courts began allowing employers who used illegal factors in employment decisions to avoid liability by merely showing that they would have made the same decision anyway even without considering the unlawful factor.

In other words, the unintended consequence of the decision was that employers were getting off the hook in the face of direct evidence of discrimination.

As a result, Congress overturned that portion of Price Waterhouse when it enacted the Civil Rights Act of 1991.  In so doing, it specifically lowered the standards for employees in “mixed-motive” cases.  Theoretically, the CRA  makes it easier for employees to win these cases.  Under the Act:

• the employer is not absolved of liability in “mixed-motive cases” even if it proves it would have made the same decision anyway, but damages to the employee are restricted.

• in  order to take advantage of the mixed-motive theory and shift the burden to the defendant, the plaintiff must “demonstrate” that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice

The legislation was silent as to what type of evidence (direct, circumstantial, clear and convincing, etc.) the plaintiff needed to successfully prove the illegal motivation.

The issue of what kind of evidence was required was decided by the Supreme Court inDesert Palace, Inc. v.Costa in 2003. According to that decision, Congress intended the term “demonstrate” to mean that an employee could prove his or her case bydirect or circumstantial evidence. As the Court stated:

Title VII’s silence with respect to the type of evidence required in mixed-motive cases . . . suggests that we should not depart from the “[c]onventional rul[e] of civil litigation [that] generally appl[ies] in Title VII cases.” … That rule requires a plaintiff to prove his case “by a preponderance of the evidence,” . . . by using “direct or circumstantial evidence,” Postal Service Bd. of Governors v. Aikens,460 U.S. 711, 714, n. 3 (1983).

You would think that would settle it but there’s always a wrinkle, and the wrinkle for Mr. Gross is that  the CRA applies to Title VII and does not specifically mention the Age Discrimination in Employment Act . As a result, according to FBL Financial, neither the CRA nor the Desert Palace decision apply to Gross’ case.

Paul Secunda from the Marquette University Law School Faculty Blog points out that conservative justices like Scalia, Thomas, Roberts and Alito may jump on this argument.

One argument, likely to be favored by conservative justices like Scalia, Thomas, Roberts, and Alito, is a textualist approach arguing that Congress knew what it was doing, could have expressly included the ADEA in the CRA of 1991, but chose not to for whatever reason. If we are unhappy with the current state of affairs, the argument continues, the proper approach is to allow Congress to amend the CRA of 1991 to include ADEA claims.

The flip side is that disparate treatment claims under the Age Discrimination in Employment Act (which is what this is) are always interpreted identically to claims brought under Title VII (which prohibits discrimination because of race, color, religion, sex, or national origin) on issues like the ones before the Court.

Gross’ argument is that there would be no reason not to interpret the ADEA  consistently with Title VII and no reason not to do so in this case.  That is in fact what many courts have done. (ie the Sixth Circuit Court of Appeals in Blair v. Henry Filters)

If anyone wants more, better, or different analysis of  the Gross case,  there are lots good pieces on it (SCOTUSBLOG, Ross Runkel’s Law Memo are two)

Whatever the outcome, as a practical matter I don’t think it will change the way employees and their lawyers go about proving age discrimination cases:

• Plaintiffs are going to present all the evidence they have whether it’s direct or circumstantial, or both.

• Most of us who represent employees have never seen the benefit of getting a “mixed motive” instruction even when we have direct evidence of discrimination because it’s too confusing to the jury.

• It’s just a much easier and better standard for employees in discrimination cases to have to prove by a preponderance of the evidence, whether direct or circumstantial, that age, race, sex, religion, national origin, or disability was a motivating factor in the adverse employment decision.

For sure, the decision will be interesting to Supreme Court observers to see how the justices line up on this one.  Other than that, it’s not very interesting at all, but since it’s not often that an age discrimination cases hit the Supreme Court, it’s got to be talked about even though I am the first to admit –it’s mostly academic.

Image: www.visitingdc.com

Crossposted from Ellen Simon’s blog Employee Rights Post.

About the Author: Ellen Simon is recognized as one of the foremost employment and civil rights lawyers in the United States. Ms. Simon is the owner of the Simon Law Firm, L.P.A., and Of Counsel to McCarthy, Lebit, Crystal & Liffman, a Cleveland, Ohio based law firm. She is also the author of the legal blog, the Employee Rights Post. Her website is www.ellensimon.net.

Tomorrow, March 24th, Betty Dukes and the now two million women who are members of the largest sex-discrimination class action case, Dukes v. Wal-Mart, move one step closer to victory. A panel of 11 judges of the federal Ninth Circuit Court of Appeals will hear Wal-Mart’s latest attempt to stop this case from moving forward as a class action.

In 2001 Betty Dukes and a handful of women sued Wal-Mart, charging it violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of an individual’s race, color, religion, sex or national origin. They charged that women who work at Wal-Mart are paid less than men in comparable positions despite having higher performance ratings and greater seniority. They also allege that women receive fewer promotions and when promoted they wait much longer than male employees.

Following two years of discovery, including review of over a million pages of documents (including Wal-Mart’s employee compensation data), depositions of both Wal-Mart executives and our clients, testimony of statisticians, a labor economist and a sociologist, the District Court certified the class finding that common questions of fact and law existed. The court also found that there was significant evidence of corporate-wide practices and policies of excessive subjectivity and gender stereotyping in personnel decisions. The class was certified for injunctive relief and punitive damages.

This is Wal-Mart’s third attempt to decertify the class, and it has garnered the support of large corporate interests, as well as the Pacific Legal Foundation whose amicus brief in support of Wal-Mart sums up their view of this case. Their two points are that “class certification would violate Wal-Mart’s due process rights” and that “federal courts are not the proper forum for redressing broad social justice claims or disputes between social classes.”

When broad social justice goals are embedded in the law, then courts must redress these claims. Title VII was enacted with the stated goal of eliminating the societal norm which relegated women and men of color to second class status in employment, excluding them from many jobs, paying them lower wages and subjecting them to the least desirable working conditions.

Since this action was filed Wal-Mart has put forth numerous arguments seeking to defeat class certification: the case is too big and unmanageable; plaintiffs’ claims are not typical; there is no evidence of common practices that harm the plaintiffs; and Wal-Mart’s right to due process would be violated. The case is big because Wal-Mart, with 4,259 stores, is the nation’s largest employer. Wal-Mart wants the right to defend itself against each and every woman who claims she was paid less or unfairly denied promotion opportunities.

Class actions were established as a vehicle for addressing systemic harms, and Wal-Mart and many other large businesses seek to convince the courts that justice is better served on an individual case by case basis. But given the astronomical disparity in resources between Wal-Mart and the underpaid female class members, this case presents the textbook example of why class actions have been–and still are–the only viable means of redressing systemic discrimination. A Wal-Mart employee has a better chance of winning the Lotto than garnering the resources to sue one of the largest profit-making enterprises in the world. Wal-Mart knows that if it can defeat class certification, it diminishes the likelihood it will be held accountable for its wide-spread discriminatory practices.

Until recently big business enjoyed a period of exuberance and expansion fueled by the mantra that less oversight and regulation fostered business growth and prosperity. Accounts of corporate excesses and irresponsibility (and at times criminal activity) remind us daily that an absence of regulation is not a good thing. Wal-Mart is one of the very few corporations that continues to post a profit and is performing admirably well in the rough economic environment. Our clients want Wal-Mart to succeed, and as the company’s backbone, they should be sharing in its success. They look forward to the day when every woman who works or shops at Wal-Mart knows that the Company’s financial success has not been made at the expense of its female workforce.

A Peaceful Revolution is a blog about innovative ideas to strengthen America’s families through public policies, business practices, and cultural change. Done in collaboration with MomsRising.org, read a new post here each week.

NOTE: Cross posted from Huffington Post: http://www.huffingtonpost.com/debra-a-smith/ipeaceful-revolutioni-wal_b_178260.html

About the Authors: Irma D. Herrera is the Executive Director of Equal Rights Advocates, a San Francisco based organization whose mission is to protect and secure equal rights and economic opportunities for women and girls through litigation and advocacy. Her articles on legal and cultural issues were published in the New York Times, the Washington Post, Newsday, and Ms. Magazine. Debra A. Smith has over twenty-five years experience litigating complex employment discrimination and other civil rights. Debra has been with Equal Rights Advocates since July 2001 where she continues her class action litigation, including co-counseling in the largest sex discrimination class action to date in the United States against Wal-Mart Stores, Inc. which involves more than 1.6 million low wage women workers.

Talk about the audacity of hope – who could have imagined that barely a week into office, President Obama would sign the Lilly Ledbetter Fair Pay Act and that the Supreme Court would unanimously rule that employees who report discriminatory treatment during an internal investigation are protected from retaliation by Title VII of the Civil Rights Act in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee?

But will the winds of change continue to blow when the Supreme Court considers AT&T v. Hulteen, the last case heard in 2008?

AT&T v. Hulteen raises the question: Does the Pregnancy Discrimination Act of 1978 prohibit AT&T from giving smaller pensions to women who took pregnancy leave before its passage than it gives to other retirees with the same length of service? The Pregnancy Discrimination Act amended Title VII to require that “women affected by pregnancy … shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons … similar in their ability or inability to work.”

Before 1978, it was standard practice in the telecommunications industry to treat pregnant employees differently from employees who were temporarily disabled for other reasons. Company policy forced pregnant women like Noreen Hulteen to go on leave while they were still physically able to work, and new mothers were not guaranteed immediate return to work after recovery from childbirth. Their leaves were classified as “personal” rather than “disability,” depriving them of the full seniority accrual enjoyed by employees disabled for reasons other than pregnancy. They were not permitted to shift to disability leave even if an unrelated disability extended their absence from work.

Non-pregnant employees who anticipated or suffered a period of disability were not subject to forced leave or delayed return. They received full seniority credit for the entire leave period. Upon return to work, non-pregnant employees retained the “net credited service” date that they had at the outset. By contrast, employees returning from pregnancy leave had their dates of hire “adjusted,” reducing their seniority by all but 30 days of the leave’s duration. Hulteen lost 210 days of service credit under this regime.

After the act went into effect, AT&T eliminated its discriminatory leave policies, but not the discriminatory service credit adjustments created by those policies. AT&T continued to use pregnancy adjusted net credited service dates to calculate retirement benefits after the Pregnancy Discrimination Act went into effect, and has been insisting on its legal right to do so, with mixed success, for 30 years.

Enter the Supreme Court. Twice, the 9th Circuit Court of Appeals held that AT&T’s conduct violates Title VII. The first time the Supreme Court denied certiorari. The second time, AT&T persuaded the court to take the case. At oral argument, its gamble appeared to have paid off.

In most press reports following the oral argument, the smart money was on victory for AT&T, and it was not hard to see why. Justice Anthony Kennedy is often the crucial swing vote on issues that divide liberals and conservatives. He seemed deeply troubled by the idea that a ruling in favor of AT&T’s retiring mothers could possibly, in the current economic climate, reduce pension funds available for everyone.

Still, reading tea leaves is a perilous game, and as inaugural afterglow fades, the Ledbetter Act and the Crawford opinion give rise to cautious optimism that the court’s decision in Hulteen will align more with Congress’ purpose in enacting the Civil Rights Act of 1964, than with its panic in enacting the Troubled Asset Relief Program. Here’s why.

First, the Lilly Ledbetter Fair Pay Act resolved a key issue in the case – timeliness – in Hulteen’s favor. In the words of the act: “[A]n unlawful employment practice occurs, with respect to discrimination in compensation … when an individual is affected by application of a discriminatory compensation decision or other practice.” Hulteen’s claim is timely under the Ledbetter Act because she filed a charge with the Equal Employment Opportunity Commission at the time AT&T awarded her a smaller pension than retirees with the same length of service.

Second, last week’s Crawford decision inspires hope that the justices will view the claim that Title VII permits AT&T to pay reduced pensions to women who took pre-Pregnancy Discrimination Act pregnancy leave with a skeptical eye. In Crawford, the employer argued that Title VII protects an employee who complains about discrimination on her own initiative, but not one who reports the same discrimination in the same words when her boss asks a question. Justice David Souter’s opinion rejected the employer’s position as not only wrong, but “freakish.” This is not language you hear every day from the Supreme Court.

Well, what could be more freakish than arguing that Title VII permits you to continue to calculate pensions using a discriminatory system that would violate the Pregnancy Discrimination Act if adopted today, just because it was in use when the act went into effect?

Twenty years ago, the court knew what to do with a similar argument. Speaking for a unanimous Supreme Court in Bazemore v. Friday, 478 U.S. 385 (1986), Justice William Brennan wrote: “A pattern or practice that would have constituted a violation of title VII, but for the fact that the statute had not yet become effective, became a violation upon title VII’s effective date, and, to the extent an employer continued to engage in that act or practice, it is liable under that statute.”

To be sure, Bazemore concerns paychecks, whereas Hulteen concerns pension benefits, but the fundamental equity principle is identical: Title VII was enacted to eliminate discrimination against everyone on the basis of protected status, not just those fortunate enough to enter the workforce after its effective date. Treating newly hired black employees (or newly pregnant women) the same as similarly situated others will not satisfy that statutory goal if the victims of pre-act discrimination remain in its thrall.

AT&T argues that imposing liability will upset its “settled expectation” that women who took pre-Pregnancy Discrimination Act pregnancy leaves would not receive equal benefits upon retirement. But Bazemore was decided in 1986. AT&T has already received a 30-year economic windfall by not changing its pension benefit calculation system. Now it’s time for justice.

In the words of Obama when signing the Lilly Ledbetter Fair Pay Act: “[M]aking our economy work means making sure that it works for everybody; that there are no second-class citizens in our workplaces….Ultimately, equal pay isn’t just an economic issue … it’s a question of who we are – and whether we’re truly living up to our fundamental ideals.”

And if AT&T needs a bailout, well, the Treasury Department is right down the street.

About the Author: Charlotte Fishman is a San Francisco employment attorney, a regular columnist on employment discrimination and women’s issues, and author of the National Employment Lawyers Association’s amicus brief supporting Noreen Hulteen et al. in the U.S. Supreme Court.

This article originally appeared in the San Francisco and Los Angeles Daily Journal on February 5, 2009. Reprinted with permission of the author.

In a ceremony rich with symbolism, President Barack Obama signed into law The Lilly Ledbetter Fair Pay Restoration Act on January 29, 2009. In front of a cheering throng who applauded enthusiastically when Ledbetter was introduced, the President said, “This is a wonderful day. It is fitting that the very first bill that I sign is The Lilly Ledbetter Fair Pay Restoration Act.”

The president described the Act as, “upholding one of this nation’s founding principles that we are all created equal and we each deserve a chance to pursue our own version of happiness.”