Faking Diversity, and Other Legal Updates
5/9/2007
Faking Diversity, and Other Legal Updates
By Gilbert F. CasellasThis is a monthly column on diversity-related legal news by Gilbert F. Casellas, former chair of the U.S. Equal Employment Commission and a member of Mintz Levin Cohn Ferris Glovsky & Popeo's Washington, D.C., office. Also look for his answers to topical legal questions in DiversityInc magazine. Read his take on age-discrimination in the May issue of DiversityInc magazine.
"The pluralism of our society is mirrored in the workplace, creating endless occasions for offense. Civilized people refrain from words and conduct that offend the people around them, but not all workers are civilized all the time." Judge Richard Posner writing in Yuknis v. First Student, Inc.
There were a number of developments in April. Significantly, the U.S. Supreme Court refused to review several employment cases dealing with the "cat's paw" theory, and the Bronx Supreme Court allowed a case to proceed where the employer allegedly breached a contract by faking its commitment to diversity. A federal bill prohibiting genetic discrimination proceeds, and the Equal Employment Opportunity Commission addressed the issue of "family responsibilities discrimination."
Significant EEO Court Decisions and Resolutions
Race Case Dismissed. The U.S. Supreme Court's "cat's paw" cases were rejected; all three cases on the Supreme Court's docket dealing with the theory of subordinate bias will not be considered.
The first case, BCI Coca-Cola Bottling Co. of Los Angeles v. EEOC, was dismissed one week before the scheduled oral argument after BCI Coca-Cola's lawyers requested a dismissal. The company had sought Supreme Court review of a 10th Federal Circuit Court of Appeals decision that allowed the EEOC to pursue a race-discrimination claim even though the company official who fired the black employee had no racial animus and was unaware of his race. The appeals court would have allowed the EEOC to proceed on the "cat's paw" theory that the claimant's immediate supervisor, who was allegedly biased against black employees, provided tainted information to the neutral decision maker who made the ultimate decision. In this case, the ultimate decision maker worked in Phoenix, some 450 miles from the Albuquerque plant where the claimant worked. Review by the Supreme Court would have clarified the law that currently is split in the federal circuit courts and would have provided guidance to large employers that have a centralized process for employment decisions. BCI Coca-Cola Bottling Co. of Los Angeles v. EEOC, U.S. No. 06-341, case dismissed, 4/12/07).
The remaining two cases dealing with the same theory, Sawicki v. Morgan State University (No. 06-306) and Ray v. CSX Transportation (No. 06-405), were later dismissed, the former denied consideration (certiorari) and the latter denied rehearing.
Sexual harassment. U.S. Supreme Court refuses to rule on the question of employer liability for non-employees' acts. The Supreme Court refused to consider whether prison guards can hold their employers accountable for sexual harassment stemming from behavior of inmates. Ayers v. Freitag, U.S., No. 06-1085, cert. denied Apr. 2, 2007. The Court thus left undisturbed a 2006 decision of the 9th federal circuit appeals court in favor of a prison guard who claimed the California Department of Corrections failed to protect her from sexual misconduct by inmates. EEOC regulations provide that an employer may be liable for acts of non-employees where the employer knows or should have known of the conduct and fails to take immediate and appropriate corrective action. (In contrast to the Ninth Circuit, on April 25, the federal appeals court for the Eighth Circuit held that a female worker at a residential care facility for violent male youth offenders could not support her sexual-harassment claim because the inmates' conduct could not be attributed to her employer. Vajdi v. Mesabi Acad. of Kidspeace, Inc., No. 06-2482.)
Contract/Diversity/Race. Breach-of-contract lawsuit for faking diversity commitment allowed to proceed. The Bronx, N.Y., Supreme Court, a trial-level court, ruled on April 12 to permit a breach-of-contract suit to proceed against an elite private school that is accused of faking a commitment to diversity in its student body. The plaintiff claims that he was hired as admission director for Riverdale Country School and was promised the opportunity to increase diversity among the student body. The plaintiff, who is black, claims that the school instead intended to use him as "window dressing" while maintaining admissions practices and a meager financial-aid budget that he claimed to be discriminatory and that undermined the goal of diversity. He alleged that the headmaster said that the school's diversity efforts should seek to enroll "more full-paying Asians and non-Jews" and discouraged him from recruiting children of black celebrities such as Sean "P. Diddy" Combs and Spike Lee, both of whom have children attending neighboring Horace Mann School, because they would not have been "good additions" to Riverdale Country's network of parents. The school has denied all allegations. Herndon-Brown v. Riverdale Country School, 20790/2006.
Race/National Origin. FedEx Corp. reached a settlement with a class of black and Latino employees. Under the agreement, FedEx will pay $55 million and make changes to its selection procedures and performance evaluations as well as revise its personnel policy "for greater consistency in the use of disciplinary tools." The class consisted of about 20,000 black and Latino non-supervisory workers and black managers below the senior-management level. Among the allegations was that a Basic Skills test had a discriminatory impact on employees of color. In addition, the plaintiffs alleged that the company disproportionately assigned people of color to part-time and casual positions instead of full-time and permanent hourly jobs, provided people of color with fewer promotions, paid them less, and disciplined them more frequently for petty matters. Satchell v. Federal Express Corp., N.D. Cal., No. 03-02659.
Race/National Origin. EEOC settled a race and national-origin class suit that charged a New York geriatric center with harassment and retaliation against 29 black and Caribbean (Haitian and Jamaican) employees. Under the terms of the settlement, Flushing Manor Geriatric Center (doing business as William O. Benenson Rehabilitation Pavilion) agreed to pay $900,000 as well as hire a qualified human-resources professional, implement antidiscrimination policies and procedures, conduct training, and report internal complaints to EEOC over a five-year period. EEOC's lawsuit claimed that the workers, who served in the nursing, food service, housekeeping, and recreation departments, were subjected to harassing comments by managers and residents; Haitian employees were prohibited from speaking in Creole while other non-English languages were allowed to be spoken; black and/or Caribbean workers were subjected to stricter disciplinary actions; and those who brought issues to management were retaliated against. EEOC v. Flushing Manor Geriatric Center, Inc., E.D.N.Y., Civ. No. 05-4601.
Sex discrimination. The terms of a $46-million settlement of a sex-discrimination case against Morgan Stanley were released on April 24. Under the terms of the settlement, a class of about 2,700 female financial advisers will be compensated from a $46-million settlement fund. The suit had alleged that Morgan Stanley systematically denied female employees equal opportunity in compensation, promotion, training, mentoring and participation in "partnership" arrangements with fellow advisers. In addition to adopting new programs in account distribution, training, and management development, the settlement calls for the appointment of an independent diversity monitor to oversee compliance with the settlement agreement as well as receive reports about complaints. Augst-Johnson v. Morgan Stanley & Co., D.D.C., No. 1:06-cv-01142 (RWR).
Sex/National Origin. A federal jury returns verdict against another financial-services firm. A week before the Morgan Stanley settlement was announcement, a federal jury in New York ordered UBS to pay more than $3.5 million in punitive damages to a female, Chinese-American stockbroker who claimed she was fired for failing to meet standards not required of similarly situated male financial advisers. Her complaint had alleged that UBS discriminated against nonwhite and female brokers by distributing leads, walk-ins, referrals and accounts of departing brokers more readily to white male brokers than to nonwhite or female brokers. TSE v. UBS Financial Services, S.D.N.Y, No. 1:03-cv-06234-GEL.
Race. Retaliation lawsuit by white librarian against HBCU to proceed. Frank Bruno, a white-male librarian at Prairie View A & M University, claims that he was fired after filing a race-discrimination charge with EEOC. Bruno was placed on probation six days after filing the charge with EEOC and was terminated six months later, despite having received favorable job evaluations for three years. The federal district court in Houston denied the university's summary judgment motion and held that Bruno presented enough evidence to make out a prima facie case of retaliation and could thus proceed with his case. Bruno v. Prairie View A. & M. University, S.D. Tex., No. H-05-3926.
Significant EEO Lawsuits Filed in April
Pilots sue FAA over mandatory retirement age. Three airline pilots acting on behalf of a group of more than 300 pilots have sued the Federal Aviation Administration claiming that a 48-year-old-law mandating retirement at age 60 is blatantly discriminatory and not based on scientific evidence nor any evidence of any accidents attributable to the age of a pilot. It noted that the International Civil Aviation Organization Authority last year raised the retirement age to 65, which would allow the FAA to accept pilots up to age 65 on foreign carriers coming in and out of the United States. The National Pilots Association supports a change, while the Air Line Pilots Association opposes one. The FAA announced an intent to extend mandatory retirement to 65, but only after a two-year period for rulemaking and public comment. The plaintiffs, who oppose the two-year wait, are seeking immediate waivers and assert that after two years an estimated 5,000 experienced pilots will have reached 65. In re: Tetlow, D.C. Cir., No 07-1078.
Circuit City layoffs lead to age-discrimination suit. Within a week of its announcement that it would reduce costs by laying off 3,400 workers, Circuit City was sued in a proposed class-action age-discrimination suit in the Superior Court of California in Los Angeles. The lawsuit alleges that under the company's "wage-management initiative," the laid-off workers were paid above the market-based salary range for their roles and were to be replaced with lower-paid workers. They also claim that using wage rates as the sole basis for termination will adversely impact older workers who have greater seniority and therefore higher wages. Weidler v. Circuit City Stores, Inc., BC369011, Cal. Supreme Court, Los Angeles County.
EEOC suit against Outback Steakhouse may expand to nationwide class action. An EEOC lawsuit filed last September in federal court in Colorado claimed that the restaurant chain overlooked women for management positions. The suit originally focused on female workers and job applicants in Colorado, Wyoming and Montana. In March, the court allowed EEOC to expand its discovery and seek information for nearly 300,000 employees who had worked at Outback restaurants across the country since 2002, almost half of whom were women. If allowed to proceed as a national class action, an issue yet to be decided, the class could be composed of as many as 150,000 female workers. EEOC v. Outback Steakhouse of Florida, Inc., D. Colo., No. 06-cv-01935.
Legislative and Policy Pipeline
Pay Equity. On April 11, Sen. Tom Harkin, D-Iowa, introduced The Fair Pay Act of 2007 (S. 1087) that would amend the Fair Labor Standards Act to require employers to provide equal pay for jobs that involve comparable skill, effort, responsibility and working conditions. The following day advocates for legislation to reduce the pay gap between men and women workers appeared at a hearing entitled Closing the Gap: Equal Pay for Women Workers. The hearing was led by Sens. Harkin and Hillary Clinton, who earlier sponsored the Paycheck Fairness Act (S-766). The issue of pay equity received additional attention in April with the release of a study by the American Association of University Women Educational Foundation entitled "Behind the Pay Gap," which found that among full-time workers with a four-year college degree, women earn 5 percent less than men one year after graduation, and the gap widens to 12 percent after 10 years.
Genetic Discrimination. There is more to report on the pending federal legislation that would prohibit employers and health insurers from discriminating against individuals based on genetic information. By a vote of 420 to 3, the House passed the Genetic Information Nondiscrimination Act of 2007 (H.R. 493). The bill now moves to the Senate where a companion bill, S. 358, also entitled The Genetic Information Nondiscrimination Act of 2007, is pending.
Family Responsibilities Discrimination. At its April meeting, the EEOC invited experts to testify about work/family balance, the creative and positive ways some companies have responded to employees' need to balance work and family, and the situations where employers' treatment of female employees who request a work/family balance have led to more discrimination charges against such employers.
Race and Ethnic Data - EEO-1 Form. EEOC has postponed until August 2007 a proposed regulation stating that employee self-identification is the preferred method for employers to collect race and ethnic data provided on EEO-1 forms. The regulation will conform the EEOC's rules with the revised EEO-1 form that will be in use in the fall of 2007. The revised form increases the number of job categories and racial/ethnic categories, including a new "two or more races" category. The current regulations permit employers to gather racial and ethnic date from surveys and employment records.
