Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

The new regulations were drafted in response to two U.S. Supreme Court decisions that changed the landscape for employers facing ADEA claims.  In Smith v. City of Jackson (2005), the Court held that an employment practice which disparately impacts older workers is not discriminatory if it can be justified by a “reasonable factor other than age.”  Because Smith did not specify which party bore the burden of persuasion on this defense, the Court decisively ruled in Meacham v. Knolls Atomic Power Lab (2008), that an employer bears both the burden of production and the burden of persuasion.

 The new regulations seek to clarify the scope of the “reasonable factor other than age” defense in a number of ways.  The regulations offer a nonexhaustive list of factors to be used in determining the “reasonableness” of the challenged employment practice.  The list includes considerations such as whether the employer’s practice and implementation involved a common business practice, the extent to which the practice is related to the employer’s stated business goal, the extent to which the employer took steps to assess the adverse impact of the practice on older workers, and whether alternative options were available.  The proposed rules also consider the extent to which the employer gave supervisors unchecked discretion to assess employees subjectively and the extent to which supervisors were given guidance on how to apply the factors and avoid discrimination.

 Critics of the proposed regulations argue that the rules, along with the Smith/Meachum  analysis, make it virtually impossible for even the most careful employer to survive summary judgment on a disparate impact claim because a plaintiff merely has to show that the facially-neutral employment practice falls more heavily on older workers.  Opponents also question the EEOC’s reliance on a tort theory of “reasonableness” to create a duty on the part of the employer to avoid discrimination.  Along these lines, one of the commissioners who voted against the rule expressed concern that the rule would be vulnerable to substantive and procedural legal challenges as a result of its “wholesale application of tort law [principles].”

On September 27, 2011, the EEOC filed suit against BAE Systems alleging that the company violated the ADA by firing a morbidly obese employee at one of its manufacturing plants.  The employee, who weighed more than 600 pounds, sorted parts on a raised platform, drove a forklift, and performed deskwork.  In its complaint, the EEOC alleged that BAE terminated the long-term employee, after telling him that it “had reached the conclusion that he could no longer perform his job duties because of his weight.”  During the EEOC’s investigation, the company stated that the employee had difficulty bending, stooping, and kneeling.  It also contended that the employee had difficulty walking from the parking lot to the plant, from which it concluded that he had trouble walking around the facility.  BAE denied the employee's request to be moved to another position.  It also allegedly made no attempt to discuss reasonable accommodations.

At present, there are no federal laws designating weight as a “protected characteristic,” like race, sex, and religion under Title VII of the Civil Rights Act of 1991, or prohibiting against discrimination in employment on the basis of obesity.  Further, with the exception of Michigan and a few local jurisdictions (e.g., San Francisco), state and local laws likewise do not afford protection against obesity discrimination.  The EEOC’s suit against BAE, however, highlights an avenue that obese individuals may pursue for protection - the ADA.  Under the ADA, as revised by the ADA Amendments Act of 2008, an individual is considered disabled if he or she has a disability, has a record of a disability, or is regarded as disabled, and that disability “substantially limits one or more of [the individual’s] major life activities.”

Proactive employers can adapt their practices and policies to address this developing issue.  In addition to combating stereotypes about obese workers, employers should recognize obesity as a very real, potential disability that may require reasonable accommodation through the “interactive process” called for by the ADA.  Employers may also consider other measures that address the root of obesity, such as implementing voluntary, private weight reduction programs or developing a healthier workplace culture, for example, by stocking vending machines with water and low-fat snacks, offering fitness fairs and health screenings, and partnering with local athletic clubs to offer employee discounts.

What This Means for California Employers

GINA already prohibits discrimination on the basis of genetic information in the areas of employment and health insurance.  Title II of GINA, which governs employers, prohibits the use of genetic information in hiring, termination, or making decisions related to compensation, terms, conditions, or privileges of employment.  Title II also restricts employers from requesting, requiring, or purchasing genetic information, with certain limited exceptions, and limits the disclosure of genetic information.  (A detailed discussion of the U.S. Equal Employment Opportunity Commission’s final regulations interpreting Title II of GINA can be found here.)  However, GINA’s scope is limited to employers who employ 15 or more employees.

SB 559 extends the prohibition on discrimination based on genetic information to employers employing five or more persons.  SB 559 also expands on the protections available under the federal law by prohibiting discrimination based on genetic information in the additional areas of housing, mortgage lending, public accommodations, emergency medical services, licensing exams, and programs administered or funded by the state.  In the employment context, SB 559 amends the California Fair Employment and Housing Act (FEHA), which already protects the right and opportunity of all persons to seek, obtain and hold employment without discrimination on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation, to also include genetic information as a prohibited basis for discrimination. 

FEHA’s definition of “genetic information,” as amended by SB 559, mirrors the definition set forth in GINA, defining “genetic information,” with respect to any individual, as (1) the individual’s genetic tests; (2) the genetic tests of the individual’s family members; and (3) the manifestation of a disease or disorder in family members of the individual.  “Genetic information,” as defined under both the state and federal law, also includes any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by an individual or family member of the individual.  Both laws, however, exclude from the definition information about an individual’s sex or age, which are already protected classes under state and federal civil rights laws.

Of particular importance to California employers is the greater potential for damages that potentially can be assessed for violations of SB 559 than for violations of GINA.  The same remedies available under Title VII of the Civil Rights Act of 1964 are available under Title II of GINA, and Title VII’s cap on combined compensatory and punitive damages (excluding back pay and front pay) also applies to actions under Title II of GINA.  This cap ranges from $50,000 to $300,000, depending on the size of the employer.  In contrast, an employee who brings a civil action against her employer for genetic discrimination under FEHA faces no statutory limit on the amount of compensatory or punitive damages she may obtain.

Steps Employers Should Consider to Ensure Compliance with California and Federal Laws Prohibiting Genetic Discrimination

California employers should consider taking the below steps to ensure compliance with SB 559 and GINA: 

• Update company policies to include genetic information as a prohibited basis for discrimination, harassment, and retaliation;
• Train supervisors, human resources, and other hiring personnel regarding GINA and SB 559 compliance;
• Conduct an audit of any voluntary wellness programs to ensure that their policies with respect to genetic information comply with GINA;
• Revise any form requests for medical information to include the “safe harbor” language provided in the GINA regulations warning employees and health care providers not to provide genetic information in response to requests for medical information;
• Remove any genetic information from personnel files and place it in confidential medical files; and
• Post the most recent version of the “Equal Employment Opportunity Is The Law” poster, which reflects information about GINA.

Along with the two named individuals, the EEOC sought to represent a class of unidentified individuals who allegedly were disabled under the ADA and purportedly had been subjected to UPS’s medical leave policy, which the EEOC claimed violated the ADA by failing to provide leaves of absence longer than 12 months.  The court had already dismissed the EEOC’s original complaint in September 2010, noting that the class allegations in the complaint were “so threadbare, conclusory and formulaic that it does not even allow the court to reasonably infer” that the proposed class members had any basis for the claim.  The EEOC filed an amended complaint that same month, again alleging generally that each unidentified class member was disabled and could perform the essential functions of his or her job with or without reasonable accommodation, but for the application of UPS’s allegedly “inflexible” medical leave policy.  UPS promptly filed another motion to dismiss, arguing that the amended complaint still failed to plead sufficient facts to support its allegations.

The court agreed, finding that the EEOC’s amended complaint used the same “conclusory, formulaic language” with respect to purported class members that was rejected by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).  The court noted that the amended complaint failed to allege “specific facts regarding what the unidentified class members’ disabilities are, the conditions of their termination or leave, or what accommodations would have been suitable for them to return to work.”  Citing EEOC v. Concentra Health Servs., Inc., 496 F.3d 773, 777 (7th Cir. 2007), the court explained that the complaint “must provide some specific description of [the protected conduct] beyond the mere fact that it is protected,” and that the allegations must “specifically indicate that the plaintiff is qualified to perform the essential functions of the job with or without reasonable accommodation.”  Although the EEOC argued that its allegations satisfied Twombly because the amended complaint put UPS  on notice of its claims against the company, it supported its argument with cases alleging violations of Title VII of the 1964 Civil Rights Act rather than ADA cases.  The court noted that pleading standards for  alleged Title VII violations (such as sex or race discrimination) were different from those involving alleged ADA violations, which must provide adequate detail of an employee’s qualifications to perform the essential functions of his or her job.

The EEOC also argued that identifying all class members before filing a claim might cause employers to stonewall investigations.  The court rejected this argument, pointing out the “considerable gulf between stating a plausible claim with sufficient detail to provide fair notice and identifying every single potential class member.”  The court also emphasized the EEOC’s obligation to investigate and conciliate claims before suing.  Specifically with respect to the EEOC’s “stonewalling” argument, the court pointed out that the agency also has subpoena power, which “provides a strong antidote to the EEOC’s professed concerns about concealment of relevant information.” Considering the EEOC’s powers and duties, the court noted that the “EEOC both can and should do better in presenting its class allegations so that they set forth in more detail the factual basis for their ADA claims.”

As to the EEOC’s additional argument that it did not have to identify each class member individually because it is exempt from following the requirements for class certification of FRCP Rule 23, the court found that the “EEOC  is not exempt from the standard pleading requirements” of Rule 8 of the Federal Rules of Civil Procedure and the EEOC failed to cite any authority to suggest otherwise.

The court’s decision permits the EEOC to pursue the detailed claims it asserted on behalf of the two named individuals, and gives the EEOC “one final opportunity” to file within 21 days a motion for leave to file a second amended complaint “if it believes that it can cure the pleading defects.”

This decision has significance not just for employers who are under attack by the EEOC for maintaining leave policies under which employees are subject to termination after a set period of time, but also for employers who are facing pattern or practice claims.  The good news is that some trial courts are becoming reluctant to allow the EEOC to pursue nationwide class actions without at least complying with basic pleading requirements applicable to every ADA plaintiff.  On the other hand, employers facing pattern-and-practice investigations should not be surprised if the agency soon gets more aggressive in exercising its broad investigatory and subpoena powers to avoid similar results in the future.

Under Title VII, as under most other civil rights and fair employment statutes, plaintiffs alleging discriminatory discharge must “mitigate,” or limit, their economic damages by making diligent efforts to find subsequent work. The failure to mitigate is an affirmative defense, however. The defendant bears the burden to show a plaintiff has not been reasonably diligent in searching for comparable employment.

In Dresser Rand, a machinist was fired in December 2002 for insubordination, after he refused to perform work that he believed conflicted with his Jehovah’s Witness religion. He did not find a new job until 2004. When he filed suit over his discharge, the defendant employer filed a partial motion for summary judgment, asking the court to limit the plaintiff’s damages. The basis for the motion was that the employee had the opportunity to seek retraining on a different type of machine, “numerical controlled manufacturing machines” (called “CNC training”), but elected to seek only manual machinist jobs instead. The defendant submitted an expert report stating the employee “would have easily obtained employment as a CNC machinist by August 2003 had he taken advantage of available vocational retraining in the field of computer numerical controlled manufacturing.”  

The court granted the plaintiff’s motion to strike the expert testimony, finding the testimony irrelevant to the question of mitigation, since the employee was not under any obligation to pursue CNC training. The court noted “the duty to mitigate is not onerous, and an employee is not required to go into another line of work if substantially equivalent employment is unavailable.”

Significance To Employers

In the current economy, unemployment is obviously a significant issue. Companies facing wrongful discharge lawsuits thus have more interest than ever in raising a failure-to-mitigate defense, to minimize the impact of a discharged employee’s long-term unemployment. This may be a difficult defense to establish, however, if fired employees need not engage in any vocational training to expand the range of jobs available. Back pay and front pay awards may be higher as a result.

Under the new law, employers may not “require an employee or prospective employee to consent to a request for a credit report that contains information about the employee’s or prospective employee’s credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment.” There are, however, four exceptions to that rule.  Employers may require such consent if:

• the employer is a financial institution;
• such a report is required by law;
• the employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law related to the employee’s employment; or
• such report is substantially related to the employee’s current or potential job or the employer has a bona fide purpose for requesting or using information in the credit report that is substantially job-related and is disclosed in writing to the employee or applicant.

By restricting an employer’s ability to request consent for a credit report, the new law indirectly restricts employer use of credit reports in employment decisions. In most cases, employers will seek refuge in the last exception. Luckily for employers, “substantially related to the employee’s current or potential job” is defined rather broadly by the Connecticut statute. “Substantially related to the employee’s current or potential job” means the information contained in the credit report is related to the position for which the employee or prospective employee who is the subject of the report is being evaluated because the position:

• Is a managerial position which involves setting the direction or control of a business, division, unit or an agency of a business;
• Involves access to customers’, employees’ or the employer’s personal or financial information other than information customarily provided in a retail transaction;
• Involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, collect debts, transfer money or enter into contracts;
• Provides an expense account or corporate debit or credit card; 
• Provides access to
  confidential or proprietary business information, or
  • (information, including a formula, pattern, compilation, program, device, method, technique, process or trade secret that:
    • derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from the disclosure or use of the information; and
    • is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; or
• Involves access to the employer’s nonfinancial assets valued at two thousand five dollars or more, including, but not limited to, museum and library collections and to prescription drugs and other pharmaceuticals.

 Employers should prepare to comply with the new law, which goes into effect on October 1, 2011.

In its letter, the EEOC makes a distinction between “personal” and “occupational” health information. According to the EEOC, personal health information is “information obtained in the course of diagnosis or treatment,” while occupational health information “concern[s] an employee’s ability to work.” While both the ADA and GINA sharply limit employers’ right to access personal health information, employers who lawfully utilize post-offer questionnaires or medical examinations will likely obtain personal health information in the normal course of business.  Similarly, health care facilities or other employers who provide on-site medical services might have access to both personal and occupational health information.

As the EEOC points out, the ADA and GINA authorize employers to use or disclose an employee’s confidential medical or genetic information only in limited circumstances. Those limited exceptions do not include the provision of occupational health information to healthcare workers providing non-job related medical services. Similarly, while supervisors and managers are permitted to access information regarding an employee’s work restrictions or necessary accommodations, they do not have the right to access other medical information.

Given the dichotomy between personal and occupational health information and the attendant restrictions on who can access what information, the EEOC suggests that maintaining both types of information in a single medical record “presents a real possibility” that employers are violating the ADA or GINA. According to the EEOC, employers who maintain medical records in an electronic format that allows individuals with access to the records to view all the information contained in the record are even more likely to be in violation of the ADA, GINA, or both.

The EEOC’s letter raises two issues for employers in possession of both occupational and personal health information. First, the EEOC’s letter suggests that employers need to distinguish between occupational or personal health information. Making this distinction is not always easy.  Second, once the employer determines what information is occupational and what information is personal, the employer has to determine whether it has appropriate safeguards in place to prevent unauthorized access to or disclosure of either category of information. For paper files, this might mean maintaining separate folders in separate locations. For electronic medical records, an employer may need to erect an electronic “wall” so that the users of the system only have access to the relevant and appropriate information.

The EEOC’s letter increases the costs and complexity of maintaining confidential employee medical records. Instead of a simple partition between medical and non-medical records, employers may now have to consider establishing additional privacy protections for different types of medical information.

If the proposed changes are accepted as drafted, contractors will face increased compliance obligations when responding to audits.  Although several of the proposed changes merely clarify requests in the current Itemized Listing, many of the changes will require contractors to provide new information and detailed data that was not previously requested in audits.  Several of the more significant proposed changes are explained below.

Leave Policies.  Under the proposed changes contractors must provide employment leave policies including policies that address pregnancy leave, the Family and Medical Leave Act and accommodations for religious observances and practices.  If these policies are contained in employee manuals or handbooks, contractors should provide the handbook or manual.  This proposed change is notable because the current Itemizing Listing does not address these issues,  which are typically handled by the Wage and Hour Division of the Department of Labor or the Equal Employment Opportunity Commission.

Detailed Demographic Information.  The proposed Itemized Listing requires contractors to provide applicant, hire, promotion and termination data by specific race/ ethnicity group, instead of by categories of minority and non-minority.  The OFCCP explains that contractors should list this data based on the following race/ ethnicity categories; African American/Black, Asian/ Pacific Islander, Hispanic, American Indian/Native Alaskan, and White.

Job Title and Job Group.  The OFCCP has proposed that applicant, hire, promotion and termination data be submitted by both job group and job title.  Currently contractors may submit this information by either job group or job title.

Pool Data.  The proposed changes would also require contractors to provide the “actual pool of candidates who applied for or were considered” for promotions and additionally the “actual pool of candidates who were considered for terminations.”  Under the current Itemized Listing contractors need only provide the number of individuals promoted or terminated, the pool data is not required.

Additional Compensation Data.  The amended Itemized Listing makes major changes to its request for compensation data.  The proposed changes would require contractors to provide individual employee compensation data rather than aggregate compensation data, which is requested in the current scheduling letter.  This information would need to be provided by particular racial/ethnicity group rather than by minorities as a whole.  The proposed changes also require contractors to identify separately the following information; base salary, wage rate and hours worked, bonuses, incentives, commissions, merit increases, locality pay and/or overtime.  Finally, contractors would be required to produce any documentation and policies relating to compensation practices, including such policies used to explain the factors and reasons for compensation decisions.

Veterans’ Employment Reports.  The OFCCP’s proposed changes would require contractors to provide their VETS 100 and/or VETS 100A reports for the last three years. 

Although in explaining the proposed changes the OFCCP states that the revisions “will reduce the overall burden on contractors,” the opposite seems to be true.  If the proposed changes are accepted contractors will not only have to provide more information and more detailed data in an initial response to an audit, but they will need to track and collect this new information.  This will likely require contractors to make significant adjustments to both their human resources practices and technologies.  Because the current Scheduling Letter and Itemized Listing are set to expire in September 2011, contractors should be aware of these possible changes so they can respond to future audit letters appropriately.

In McDonald-Cuba, the Tenth Circuit continued down the road paved by the court in its prior decision in Martinez v. Potter, 347 F.3d 1208 (10th Cir. 2003).  In Martinez, the court held that conduct occurring after the filing of an employee’s Title VII complaint in federal court involving “discrete and independent actions” requires the filing of a new EEOC charge.  347 F.3d at 1210-1211.  Martinez had been fired after he filed his Title VII lawsuit.  Subsequently, without filing a new EEOC claim, Martinez attempted to add the claim in his summary judgment brief.  The court found that Martinez’s discharge was a “discrete and independent action” that should have been exhausted, even though it “occurred after the filing of the judicial complaint.”  Id. at 1211.  The difference in McDonald-Cuba was that the alleged retaliatory act involved the federal proceeding itself.

The plaintiff in McDonald-Cuba filed post-termination discrimination and retaliation charges with the EEOC against her employer.  After receiving a right-to-sue letter, she filed suit.  The defendant’s answer included three counterclaims: (i) breach of contract, (ii) intentional interference with prospective economic advantage, and (iii) breach of the duty of loyalty.  The plaintiff then filed an amended and supplemental complaint alleging that the defendant’s counterclaims constituted a bad faith effort to retaliate against her for engaging in protected activity.  The defendant later voluntarily dismissed the counterclaims.  The district court granted summary judgment for the defendant.  Upon review, the court, relying on Martinez, held that plaintiffs “must exhaust administrative remedies as to discrete acts of alleged retaliation that involve the filing of a counterclaim in federal court.”  Accordingly, the court vacated the district court’s entry of judgment on the added retaliation claim and ordered the district court to dismiss the claim without prejudice.

The Tenth Circuit’s decision is potentially at odds with a decision from the Fourth Circuit.  The Fourth Circuit found the exhaustion requirement satisfied where the EEOC charge alleged a “pattern of [retaliatory] conduct.”  Jones v. Calvert Group, Ltd., 551 F.3d 297, 304 (4th Cir. 2009) (finding that court could hear retaliatory discharge claim where plaintiff alleged retaliatory discharge in lawsuit but had alleged only retaliatory actions during her employment in EEOC charge).  As discussed above, the Tenth Circuit considered the defendant’s filing of counterclaims a “discrete act,” rather than an act that was part of a pattern of retaliation.  The court did not mention whether the plaintiff had alleged that the retaliation was continuing in nature in her EEOC charge.

The decision serves as a good reminder that employers cannot be “surprised” in litigation by allegations that a particular act was discriminatory, harassing, or retaliatory.  Employers should carefully review each of the plaintiff’s claims and ensure that every discrete act alleged to be discriminatory, harassing, or retaliatory has been included in a charge before the EEOC.  Where situations like that in Martinez and McDonald-Cuba arise in other jurisdictions, employers have an opportunity to argue for a similar hard-and-fast adherence to the exhaustion requirement. 

The Equal Employment Opportunity Commission (EEOC) recently heard testimony, on March 15, 2011, on the employment of persons with mental disabilities.  The EEOC believes this group continues to experience significant barriers to employment.  And, of course, there is the very notable recent publication of the final regulations implementing the Americans with Disabilities Act Amendment Act, which are discussed in more depth in a separate article.  

The Office of Federal Contract Compliance Programs (OFCCP), has also been focused on the employment of persons with disabilities.  Since 2010 a number of OFCCP initiatives have placed increased scrutiny on whether and how federal contractors employ disabled persons.  These initiatives include the announcement of new audit priorities that focus on disabled persons, and a Notice of Proposed Rulemaking to strengthen the regulations implementing Section 503 of the Rehabilitation Act of 1973, which helps people with disabilities obtain and keep employment.  The OFCCP has also created a website of its own to promote awareness of disability issues to the general public.  This follows the OFCCP’s earlier guidance directing that employer’s online application systems must be made accessible to persons with disabilities.

In early March, the DOL posted an online “toolkit” of resources to help federal agencies become model employers of persons with disabilities.  The toolkit helps implement Executive Order 13548, which was signed by President Obama in 2010 to increase the federal employment of disabled persons.  Federal agencies have until April 11, 2011 to submit hiring plans under the Order for increasing the employment of people with disabilities. 

In February of this year, a new website was launched by the Employer Assistance and Resource Network (“EARN”).  Called “Ask EARN.org,” the website assists employers with “recruiting, hiring, retaining and advancing qualified individuals with disabilities.” EARN is part of the National Employer Technical Assistance, Policy, and Research Center at Cornell University, which is funded by the U.S. Department of Labor (DOL)’s Office of Disability Employment Policy (ODEP). The website links employers to several resources, including a Workforce Recruitment Program, a job-matching database of prescreened applicants, a monthly newsletter and an online reference desk. 

The writing is on the wall for increased enforcement activity under the federal disability laws.    Now is the time to audit employment practices, such as: 

• application processes, for accessibility to disabled persons, including online systems
• targeted outreach to recruit disabled candidates
• review of job descriptions, for business necessity of requirements
• EEO policies, to ensure they include, and are accessible, to the disabled
• reasonable accommodations, including an interactive dialogue with employees,
• maintenance and retention of separate, confidential medical files

Generally speaking, the ADAAA will make it easier for individuals to establish ADA protection. The ADA’s three-pronged definition of “disability” remains the same:

• a physical or mental impairment that substantially limits one or more major life activities;
• a record (or past history) of such an impairment; or
• being regarded as having a disability.

However, the new law makes it clear that the definition must be interpreted in favor of broad coverage, extending protection to many individuals who might have been previously denied coverage. 

Some specific highlights include:

• Relaxing the definition of “substantial limitation.” Now, the impairment need not prevent or significantly restrict a major life activity to be considered substantially limiting.
• Expanding the scope of “major life activities” to include the operation of major bodily functions, including functions of the immune system, special sense organs and skin, normal cell growth, digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions. The regulations also state that major bodily functions include the operation of an individual organ within a body system (e.g., the operation of the kidney, liver, or pancreas).
• Specific examples of impairments are listed in the regulations and include deafness, blindness, intellectual disability (formerly termed “mental retardation”), partially or completely missing limbs, mobility impairments requiring use of a wheelchair, autism, cancer, cerebral palsy, diabetes, epilepsy, HIV infection, multiple sclerosis, muscular dystrophy, major depressive disorder, bipolar disorder, post-traumatic stress disorder, obsessive-compulsive disorder, and schizophrenia.
• Positive effects from an individual’s use of one or more “mitigating measures” (other than ordinary eyeglasses and contact lenses) must be ignored in determining if an impairment substantially limits a major life activity. However, mitigating affects may still be considered for purposes other than determining whether the impairment is substantially limiting.
• Coverage is extended to impairments that are episodic or in remission (such as cancer and epilepsy), so long as the impairment is substantially limiting when active.

The regulations also make it easier for individuals to establish coverage under the “regarded as” prong of the definition of disability. The focus is on how a person has been treated because of a physical or mental impairment, rather than on what an employer may have believed about the nature of the person’s impairment. The regulations clarify, however, that an individual must be covered under the first or second prongs (actual or record of disability) in order to qualify for a reasonable accommodation.

Employers should be aware that for the past 10 years the EEOC has been targeting employers that implement English-only policies.  In fact, the EEOC has made clear through numerous press releases and strategic litigation efforts that combating English-only policies is a priority.  

You may be wondering why the EEOC would target policies that restrict employees from speaking a foreign language while at work because language is not specifically protected by Title VII. Although Title VII does not prohibit discrimination on the basis of language, the EEOC reasons  that, because language is an “essential national origin characteristic,” English-only policies should be closely scrutinized for compliance with Title VII’s prohibitions against national origin discrimination. See 29 C.F.R. § 1606.7. The agency believes that an English-only policy that restricts employees from speaking in a language other than English at all times  is a burdensome condition of employment, which violates Title VII.  See id.  If, on the other hand, the policy only restricts an employee from speaking a foreign language at certain times, the employer may justify the policy by showing that it was implemented out of a “business necessity.” See id. The EEOC’s English-only policy guidelines, however, do not indicate what “business necessity” means in this context. 

Without significant deviations, the courts have followed the EEOC’s general guidance regarding English-only policies.  Montes v. Vail Clinic, Inc., 497 F. 3d 116) (10th Cir. 2007), provides an excellent overview of how courts typically analyze English-only policies. 

In Montes, the plaintiff was a Mexican housekeeper who worked at a hospital in Vail, Colorado.  The plaintiff spoke fluent Spanish and a little English. On several occasions, the plaintiff was asked by her direct supervisor and by nurses to speak English while cleaning the hospital’s operating rooms. It was made clear to the plaintiff that she was permitted to speak Spanish during her breaks and outside of the operating rooms. 

The plaintiff brought suit alleging that the hospital’s English-only policy gave rise to a hostile work environment based on national origin. The court rejected the plaintiff’s claim.  In doing so, the court recognized that sweeping English-only policies that are “applied mechanically” and “enforced… in all circumstances and at all times within the work environment” can give rise to a claim under Title VII. The court, however, held that the policy in question did not give rise to a Title VII claim because it applied only at certain times; there was no evidence suggesting that the policy was the product of improper motive or that it gave rise to discriminatory effect; and it originated from “business necessity.” The court found that facilitating clear communication between the cleaning staff and medical staff was essential in the operating rooms and was a justified “business necessity.” 

In finding that the policy was justified by “business necessity,” the Montes court did not look to any specific factors to guide its decision. Indeed, a court is not required to consider any specific factors when deciding whether an employer’s English-only policy is justified based on business necessity. Instead, like the Montes court, courts engage in a case-by-case analysis to determine whether an employer’s proffered reason for having a n English-only policy is, in fact, justified by business necessity. Unfortunately for the employer, this means that prior to litigation there is typically little certainty regarding whether a particular policy is lawful.

One of the most recent cases to be decided in which the lawfulness of an English-only requirement was at issue, Pacheco v. New York Presbyterian Hosp., 593 F. Supp. 2d 599 (S.D.N.Y. 2009), however, provides an in-depth summary of the types of business necessity justifications that have previously been successful. 

In Pacheco, a supervisor at a New York City hospital unilaterally implemented an English-only requirement for all of his subordinates in response to several complaints that he received from patients who believed that the Spanish-speaking employees were talking about them in a language that they did not understand. The supervisor told his subordinates that he expected them to speak in English when in the presence of hospital patients, but that they were permitted to speak in Spanish (or any other language) when patients were not present. The Puerto Rican plaintiff, who spoke both Spanish and English, complained to Human Resources about his supervisor’s new rule on two separate occasions but nothing was done.

The plaintiff brought suit alleging national origin discrimination under theories of hostile work environment, disparate treatment,  disparate impact, and retaliation based on the implementation of the English-only policy. In its motion for summary judgment, the hospital argued that its English-only requirement was justified out of business necessity. Specifically, the hospital claimed that the requirement helped facilitate better staff-patient relationships and that the requirement permitted non-Spanish speaking supervisors to properly supervise and evaluate their subordinates. 

The court granted the hospital’s motion and dismissed the plaintiff’s case. The court reasoned that the hospital’s proffered justifications for its English-only requirement were consistent with business necessity. In doing so, the court squared the facts of this case with previous rulings where federal courts had found sufficient business necessity justifications  for employers’ English-only policies. See id. at 615-16 citing EEOC v. Sephora USA, LLC, 419 F. Supp. 2d 408, 417 (S.D.N.Y. 2005) (finding English-only policy was justified as a means of improving communication with customers); Montes v. Vail Clinic, Inc., 497 F.3d 1160 (10th Cir. 2007) (upholding English-only policy where policy was necessary to ensure safety for hospital patients); Roman v. Cornell University, 53 F. Supp. 2d 223 (N.D.N.Y. 1999) (finding English-only rule was justified to avoid or lessen interpersonal conflicts between employees); and Long v. First Union Corp. of Virginia, 894 F. Supp. 933 (E.D. Va 1995) (holding that English-only policy was justified to ensure the business runs smoothly and efficiently). 

Ultimately, employers that are considering whether to implement an English-only policy should be mindful of the EEOC guidelines and relevant case law. As discussed, a valid English-only policy must be narrowly tailored and address a “business necessity.” A narrowly tailored policy usually permits employees to speak in a language other than English during personal conversations, breaks, and lunch. A policy that prohibits employees from speaking a foreign language at all times, all places, or in all types of communications is typically found to be unlawful. Even though the EEOC and the courts have not specifically defined “business necessity” in the English-only context, case law makes clear that employers may implement narrowly tailored English-only policies for the purposes of promoting safety in the workplace, facilitating effective communication, and lessening the chances of interpersonal conflicts between employees.  See Pacheco, 593 F. Supp. 2d. at 615-16.  

As always, we recommend seeking advice from legal counsel before implementing such a policy.   

At the federal level, Congress is considering its own limit on employment-related credit checks. In January 2011, the “Equal Employment For All Act” (H.R. 321) was introduced in the House. The bill seeks to amend the Fair Credit Reporting Act to “prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.” 

Proponents of the bills argue that job applicants with poor credit are being unfairly excluded from the job market. They assert that it’s a Catch-22--the unemployed can’t get a job with poor credit and can’t improve their credit without a job.

And the EEOC is not sitting on the sidelines. This past December, the EEOC filed suit against Kaplan Higher Education alleging that the company’s practice of conducting pre-employment credit checks has a disparate impact on racial minorities. According to the lawsuit, Kaplan’s use of credit history data in the hiring process is “not job-related and consistent with business necessity.” The lawsuit comes only months after the EEOC held a public meeting to discuss the use of credit history data in employment decisions.   

A similar lawsuit was filed in November 2010 by a private plaintiff challenging the University of Miami’s use of pre-employment credit checks. Similar to the EEOC’s lawsuit, the plaintiff alleges that the University’s use of credit checks has a disparate impact on minorities.  

Given the increased scrutiny of pre-employment credit checks, employers should consider reviewing their pre-employment credit check practices. To minimize potential liability, employers should limit credit checks to positions where there is a “business necessity” and the applicant’s credit history is relevant to the position.

The EEOC’s Regional Attorney’s Manual states that “[t]he United States Government may withhold evidence in litigation in any of the following circumstances: (1) where a statute makes certain documents or information confidential; (2) where a privilege or objection is available to any other litigant under the Federal Rules of Civil Procedure (e.g., relevance, undue burden, attorney-client privilege); or (3) where a special privilege exists unique to the government (e.g., informer privilege, deliberative process privilege). The EEOC typically asserts the deliberative process privilege in litigation in order to protect the confidentiality of internal, deliberative material, such as documents containing the analyses, opinions, or recommendations of enforcement unit staff, and attorney memoranda containing analysis or recommendations.”

The deliberative process privilege protects the decision making process of government agencies.  To be protected, information must be “predecisional” (that is, information prepared to assist an agency decisionmaker in reaching a decision) and “deliberative.” Predecisional information is part of the deliberative process if its disclosure would expose the agency’s decisionmaking process in such a way as to discourage candid discussion within the agency. Purely factual material, however, generally is not considered deliberative. 

Several recent decisions have addressed the circumstances in which an employer is permitted to depose an EEOC investigator. For instance, in Little v. Auburn University, No. 3:08cv373, 2010 WL 582083 (M.D. Al. Feb. 17, 2010), the district court determined that a deposition should be permitted where the employer sought only to clarify factual ambiguities in the EEOC’s investigative file. The court found that such factual inquiry would not be covered by the deliberative process privilege. A different district court, however, recently granted the EEOC’s motion to quash a subpoena where the employer sought the deposition “for purposes of clarification and interpretation” of the EEOC’s determination and to “understand the factual basis for the EEOC’s determination.”  EEOC v. Pinal County, 714 F. Supp. 2d 1073 (S.D. Cal. 2010). The court noted that whenever revealing facts would be tantamount to revealing the analysis of those facts, the deliberative process applies. Unlike Little, where the employer sought clarification of factual information contained in the investigative file, the county sought clarification and interpretation of the determination letter itself, which would require revealing information about the agency’s deliberative process. The court determined that to ask an EEOC representative “to even set forth the selected facts which constitute the factual basis of the probable cause finding would infringe on the deliberative process privilege as it would reveal the EEOC’s evaluation and analysis of the extensive factual information gathered by the agency.” 

Employers seeking to depose an agency investigator should be careful to frame their arguments in terms that will not infringe upon the deliberative process privilege and should be aware courts could construe purely factual requests as infringing on that privilege.

This comes as the EEOC has hired more employees to handle the growth in volume and clear the backlog of unprocessed charges and actions. Despite the sharp increase in new charges filed during FY 2010, the EEOC was apparently able to slow the growth of charge inventory and ended the year with 86,338 pending charges -- an increase of only 570 charges, or less than one percent.  This is significant because during FY 2008 and 2009, the EEOC’s pending inventory increased 15.9 percent.

The EEOC found no reasonable cause in 64.3% percent of the FY 2010 charges, and found reasonable cause in only 4.7% of charges. Of the 99,922 new charges, 35.9% were based on race, 29.1% based on sex, 11.3% based on national origin, 3.8% based on religion, 23.3% were based on age, 25.2% were based on disability, 1.% were based on the Equal Pay Act, 0.2% were based on the Genetic Information Nondiscrimination Act, and 36.3% were retaliation charges (in FY 2009, retaliation claims surpassed race as the most frequently filed charge).

The EEOC’s mediation program also set a record during FY 2010. Of the 99,922 new charges received, 9,370 or 9.3% were settled at the administrative stage, which was ten percent more than FY 2009 and resulted in $319.4 million in monetary benefits for claimants, not including monetary benefits obtained through litigation.

The EEOC also filed 250 lawsuits during FY 2010, resolved 285 lawsuits, and resolved a total of 104,999 private sector charges resulting in a total of $404 million in monetary benefits from employers, which the EEOC reported is “the highest level of monetary relief ever obtained by the Commission through the administrative process.”

The record level of charges and recoveries -- more than at any time in the EEOC’s 45 year history -- comes during the worst job market since the Great Depression, suggesting that the increase stems, in large measure, from an increase in adverse actions caused by the bad economy, and displaced employees who refuse to go without a fight.

The EEOC recently published its annual Performance and Accountability Report for its 2010 Fiscal Year.  In its Report, the EEOC attributed “[t]his surge” in the number of charges filed “to the expanded statutory authorities that EEOC has been given with the ADA Amendments Act of 2008; the Genetic Information Nondiscrimination Act of 2008; and the Lilly Ledbetter Fair Pay Act of 2009,” as well as the “EEOC becoming more accessible, making charge filing easier and providing better, more responsive customer service.”

The number of discrimination charges filed with the EEOC likely will continue to increase into 2011.  As employers continue to feel pressure from the current economic climate to downsize and streamline their operations, it is more important than ever to follow and enforce lawful disciplinary and discharge policies, as well as ensure any leave and/or accommodation policies are compliant with the most recent amendments to the ADA, Genetic Information Nondiscrimination Act and the Lilly Ledbetter Fair Pay Act. 

For a complete breakdown of EEOC charge information by year, including the number of charges filed and the protected characteristic involved, please visit the EEOC’s website.

The Americans with Disabilities Act Amendments Act (“ADAAA”) and the Genetics Information Nondiscrimination Act (“GINA”) have created areas ripe for litigation. Among the lawsuits announced by the EEOC during October, however, none includes a claim brought under GINA and only one suit includes a claim under the ADAAA.

Since October 1, the EEOC has announced in press releases that it has filed 19 lawsuits against private employers.  Disability discrimination and retaliation tie for the most causes of action -- each are included in seven of the 19 complaints.  Nearly all of the disability discrimination claims include a claim that the employer failed to provide the allegedly disabled employee with a reasonable accommodation.  Only one of the disability claims is brought under the ADAAA. The ADAAA requires that the definition of “disability” be interpreted broadly, and overrules the interpretive framework that Supreme Court case law had established.

The prevalence of disability discrimination and retaliation claims is not a surprise.  In the press release announcing the filing of one of the EEOC’s lawsuits earlier this month, the EEOC’s San Francisco District Director Michael Baldonado noted that, in fiscal year 2009, retaliation had overtaken race discrimination as the most often alleged cause of action.  The EEOC’s reported litigation statistics show that disability discrimination charges reached record levels in fiscal year 2009, and had increased nearly 10% over the previous year.

Sex discrimination, including sexually hostile work environment claims, was a close second behind the causes of action tied for first.  Race and religious discrimination claims were the next most prevalent causes of action, as each appeared in three of the complaints.  One race and one sex discrimination claim also alleged that the employer had paid lower wages to the charging party as compared to similarly situated employees outside of the charging party’s protected category.

Only two of the 18 defending employers (two suits have been filed against one employer) are Fortune 500 companies.  Available information suggests that about the same number of defending employers in the remaining 16 lawsuits employ less than 100 employees as employ between 100 and 10,000 employees.

The lawsuits filed this month by the EEOC suggest that (1) no particular type of employer is being targeted, and (2) employers should pay close attention to their obligations under the Americans with Disabilities Act.  If a disabled employee requests an accommodation for a disability, the employer has an obligation to discuss potential accommodations with that employee.  These suits also remind employers to ensure that employee complaints of harassment or other unlawful discrimination are responded to promptly and appropriately.  If an employee has complained about discrimination or harassment, make doubly sure that any subsequent adverse action taken against that employee is firmly based on reasons that are legitimate, non-discriminatory, and have no connection to the employee’s prior complaint.

On September 27, 2010, the EEOC filed a sexual harassment lawsuit against Beacon Hill Investments Corp., which does business as Synergy Home Care, on behalf of a group of female employees assigned to care for one of the employer’s home bound male clients.  The female employees’ duties included sleeping at the client’s home overnight.  The client allegedly fondled the female employees, made suggestive comments to them, and accosted them in their sleep.  The employees allegedly complained to several managers and requested to be transferred.  The employer is accused of ignoring their complaints and failing to take any remedial action.  The female workers then quit, allegedly because of the employer’s inaction.

The EEOC claims that, by failing to take prompt remedial action in response to the female employees’ complaints, Synergy Home Care subjected them to a sexually hostile work environment and constructively discharged them.  The EEOC seeks permanent injunctions against Synergy Home Care to prevent future discrimination, harassment, and retaliation, and an order that Synergy Home Care institute policies and programs to provide equal employment opportunities for women which eradicate the effect of the alleged discrimination.  The EEOC also seeks damages for the female employees, including: backpay; frontpay; out-of-pocket losses, such as job search expenses; pain and suffering; loss of enjoyment of life; and punitive damages.

Many employers and managers may not realize that, as the above-mentioned lawsuit urges, an employer may be “responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace.” 29 C.F.R. § 1604.11(e).  For an employer to be liable for non-employee harassment, the employee must show that: (i) he or she was subjected to unlawful harassment on the basis of his or her sex; (ii) the harassment was unwelcome; (iii) the harassment was severe or pervasive enough to affect a term, condition, or privilege of his or her employment, and (iv) the employer knew or reasonably should have known about the harassment by the third-party and failed to take prompt remedial action. 

The inquiry in most non-employee harassment cases focuses on the employer’s knowledge of and response to the alleged harassment.  An employer may avoid liability by showing that, upon learning of the harassment by a third party, it took prompt, appropriate action to prevent and correct the harassment.  Whether the response was “appropriate” depends on the amount of authority and control the employer had over the non-employee.  29 C.F.R. § 1604.11(e).

What can employers do to avoid the type of lawsuit described above?

• Create a no-harassment policy and avenues for employee complaints, such as an “open door” policy or an employee hotline.
• Educate employees about how they can report harassment and that the no-harassment policy can apply equally to inappropriate conduct by third parties.
• When a report of harassment is received, respond promptly, even if the alleged harasser is not an employee.

In Kirleis, Alyson J. Kirleis filed a lawsuit against Dickie, McCamey & Chilcote. P.C., the law firm in which she was a shareholder, claiming sex discrimination, sexual harassment, unequal pay, and retaliation under both federal and state anti-discrimination laws.  Among other things, Kirleis alleged that she received less pay than her male counterparts and that discriminatory and harassing comments were made to her during her employment with the firm.  Among other allegations, Kirleis alleged that she was informed that she should give up her shareholder status to spend more time with her children.  She also claimed that she was told that “gals” in the firm should do lower level legal tasks, while the male lawyers took such cases to trial. The U.S. District Court for the Western District of Pennsylvania granted summary judgment to the law firm, based on the threshold question of whether Kirleis was an “employee” protected under the federal and state laws, or an “employer” without such protections. The district court held that certain factors of Kirleis’s shareholder position disqualified her from protection as an “employee” as defined by the federal and state laws, including Title VII and the FLSA.

In making its decision, the district court relied upon the six factors set out in a 2003 U.S. Supreme Court decision, Clackamas Gastroenterology Associates, P.C. v. Wells, which the Court used to determine whether a shareholder-director of a professional corporation is an employee or employer for application of federal anti-discrimination laws.  The six factors were based on a standard defined by the Equal Employment Opportunity Commission and focused on the amount of control the employing entity had over the shareholder-directors at issue. 

In affirming the district court’s decision, the Third Circuit agreed with the district court’s application of the Clackamas decision.  In particular the Court held that, because Kirleis was entitled to a percentage of the law firm’s profits and losses, could not be terminated from employment for cause without a three-fourths majority vote of the Board of Directors, and participated in firm governance, she was not a “mere employee” of the firm and therefore did not qualify for protection under federal and state anti-discrimination laws.

Becker Appointed To NLRB

The President filled two of the three vacant seats on the NLRB with Democratic nominees Craig Becker and Mark Pearce.  The President cited the need to promote "the basic functioning of government" as the reason for issuing the appointments.  However, he chose not to appoint Republican Brian Hayes, whose uncontroversial nomination has been pending along with those of Becker and Pearce, to fill the remaining vacancy.  As a result, the NLRB is still not fully constituted.
 
By statute the NLRB is to have five members.  Traditionally, three of the members come from the sitting president's political party and the other two are from the other party.  However, the Board has been functioning for more than two years with only two members--its Chairperson Wilma Liebman (Democrat) and member Peter Schaumber (Republican).  The two have decided more than 500 cases.  The authority of the NLRB to decide cases with only two members was the subject of an argument before the U.S. Supreme Court just last week.  All parties to the case agreed that the Board had the statutory authority to act if it had three or more sitting members.

Before leaving Washington for a two-week, post-healthcare debate recess, 41 Senators, all Republicans, wrote the President requesting that he not issue a recess appointment to Mr. Becker.  Twenty business groups, including the U.S. Chamber of Commerce, echoed the sentiments of the Senate Republicans.

Becker's nomination has been hotly contested since it was announced last fall, as a result of what some call his "extreme" views about the union selection process.  Because of that controversy, just before the Christmas 2009 recess, Senator McCain exercised his Senatorial privilege to put Becker's nomination on hold, although Republicans and Democrats indicated that the nominations of both Pearce and Hayes would be approved without significant debate.  However, the President did not seek a vote on Pearce or Hayes at that time.

Mr. Becker will leave his post as counsel for the Service Employees International Union (“SEIU”) to take his seat on the NLRB; he will remain a Board member until his recess appointment runs out at the end of 2011. With a 3-to-1 pro-labor majority and with no particular timetable for action on Mr. Hayes' nomination, the NLRB is poised to reverse numerous decisions made by the Bush appointed Board on a number of controversial issues.

As we have written in this column on several occasions, Mr. Becker's views are of grave concern to many in the business community.  For example, Mr. Becker opposes participation by employers in the process by which employees decide whether to choose union representation.  Becker does not believe that employers should be allowed to express an opinion, provide any relevant information to their employees, or otherwise participate in the process in any way.

It is difficult to tell whether Becker's appointment signals the President's intent to defer action on the so-called Employee Free Choice Act (“EFCA”).  Some will speculate that the appointment indicates a compromise between the President and Andy Stern, who runs the SEIU and has visited the White House more than anyone else in the last year.  Stern is a staunch supporter of both EFCA and his employee, Mr. Becker.  The President and Secretary of Labor Hilda Solis have repeated their support for passage of EFCA.  However, the proposed law, which would eliminate the right of employees to vote on the question of union representation, has been mired in controversy since the President took office.  Like health care reform legislation, it may require the President to muster all forces at his command to get it passed.

Becker has made clear his view that the NLRB can engage in both rule making and rule changing, which could accomplish much of what EFCA is designed to do without Congressional action.  By failing to appoint Hayes, the NLRB now has a decidedly pro-labor majority which could enact sufficient changes to the union selection process to allow the President to avoid the firestorm which would accompany the debate over EFCA. 

Feldblum Appointed To EEOC

The President also announced that he would use recess appointments to fill slots on the EEOC with controversial Georgetown University law professor Chai Feldblum, Jacqueline A. Berrien, Victoria A. Lipnic, and David Lopez. 

The appointment of Feldblum drew immediate criticism from conservative Republicans.  Feldblum, who will be the first openly gay member of the EEOC, is best known for her support of the rights movement for lesbian, gay, bisexual, and transgender (“LGBT”) persons.  She helped craft the Employment Non-Discrimination Act (“ENDA”), which would prohibit discrimination against employees on the basis of sexual orientation or gender identity by civilian non-religious employers with 15 or more employees. 

The EEOC nominees were approved by a Senate committee in early December, but their confirmation vote was put on indefinite hold by Senate Republicans who viewed Feldblum and other Obama nominees as too extreme.  Supporters of the President’s move to exercise the recess appointment option cite the EEOC’s backlog of discrimination claims and the current absence of a quorum needed to effectively address claims.  In a statement issued with the recess appointments, President Obama said, “The United States Senate has the responsibility to approve or disapprove of my nominees.  But if, in the interest of scoring political points, Republicans in the Senate refuse to exercise that responsibility, I must act in the interest of the American people and exercise my authority to fill these positions on an interim basis.”

Recess appointments last until the end of the next session of Congress.  The White House announced, however, that the nominees will remain in the Senate for confirmation by regular procedures. 

The EEOC took this action in light of two relatively recent decisions by the U.S. Supreme Court relating to claims of disparate impact under the ADEA.  In Smith v. City of Jackson, 544 U.S. 228 (2005), the Court confirmed that an employer can defend against such a claim by showing that the challenged decision was based on a reasonable factor other than age (“RFOA”).  In Meacham v. Knolls Atomic Power Laboratory, 128 S.Ct. 2395 (2008), the Court held that the burden falls on the defendant to prove the affirmative defense of an RFOA.  Neither case specifically stated what factors are “reasonable.” 

The proposed rule explains that a reasonable factor is one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.  It is one that would be used in a like manner by a prudent employer mindful of its responsibilities under the ADEA.  The proposed rule lists six considerations as potentially relevant to the reasonableness determination:

• whether the employment practice and the manner of its implementation are common business practices;
• the extent to which the factor is related to the employer’s stated business goal;
• the extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately;
• the extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
• the severity of the harm to individuals within the protected group, in terms of both the degree of injury and the number of persons adversely affected, and the extent to which the employer took preventative or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
• whether other options were available and the reasons the employer selected the option it did.

Not all criteria must point to reasonableness to establish the RFOA defense; the rule states that the list is illustrative, not exhaustive.  The rule also provides guidance regarding whether the factors considered by the employer were age-related.  The considerations for this inquiry include:

• whether supervisors are given unchecked discretion to subjectively evaluate employees;
• the extent to which supervisors were to evaluate employees based on factors known to be subject to age-based stereotypes; and
• the extent of training received by supervisors in applying evaluative factors and avoiding discrimination.

Assuming that the proposed rule will become final (after the public comment period expires), these considerations can serve as a filter for decision making.  Employers and their counsel who apply these considerations on the front end likely will find that risk is reduced, more sound decisions are reached, and challenges are more likely to be resolved in their favor.

Prior to issuing  its February 9 order, the district court dismissed the EEOC's Complaint, which asserted that 270 women had been sexually harassed by CRST.  By the time the EEOC's Complaint was dismissed, the court had disposed of the claims of all but 67 of the claimants on whose behalf the EEOC had brought suit.  In dismissing the EEOC's Complaint on behalf of the remaining 67 claimants, the court found that the EEOC "did not conduct any investigation of the specific allegations [of the 67 remaining claimants]...let alone issue a reasonable cause determination as to th[eir] allegations or conciliate them."  Specifically, the court found that with respect to the remaining claimants the EEOC failed to:  interview any of them or subpoena any documents to determine the veracity of their claims; make a reasonable cause determination as to their specific allegations; or attempt to conciliate any of their claims prior to filing the Complaint.  According to the court, the EEOC's failure to investigate the claims of the remaining claimants "deprived CRST of a meaningful opportunity to engage in conciliation and foreclosed any possibility that the parties might settle all or some of the dispute without the expense of a federal suit."

In awarding nearly $5 million in attorneys' fees and expenses to CRST, the court held that the substantial award to CRST was necessary to guarantee the observance by the EEOC of Title VII's procedures, particularly in the face of the EEOC's unreasonable conduct, which the court found imposed unnecessary burdens on CRST and the court.

This matter underscores the importance of formulating a sound litigation strategy, particularly as it relates to conciliation, during the EEOC's investigation of Title VII-related claims.  In the absence of such a strategy, an employer may miss a rare opportunity to recoup defense costs that are needlessly increased due to the agency’s failure to fulfill its statutory duties, and investigate the matter responsibly and fairly.  Conciliation should never be used or offered for any purpose other than to reach fair resolution of a case.  But an additional benefit of the conciliation position is that, if the EEOC declines to participate reciprocally, and in good faith, its position may expose the wholesale deficiencies of its litigation approach.  The result, as illustrated above, can be very satisfying to the employer.

These budget increases will allow the EEOC and DOJ to increase enforcement efforts.  EEOC Chairman Stuart Ishimaru noted that budget increases would “allow [the EEOC] to build on the progress [ ] made in hiring frontline staff, reducing a burgeoning inventory of charges, and increasing productivity.” BNA 20 Daily Labor Report AA-8.   Furthermore, Ishimaru, who has made the EEOC’s nationwide systemic enforcement program a top priority, noted that increased funding would enable the agency to “continue [its] focus on systemic enforcement.”  BNA 20 DLR AA-8

Systemic discrimination cases typically involve an employer policy or practice that results in a disparate impact upon a group of persons in a protected class or a class action.  Such cases often focus on employer hiring and promotion policies or practices.  Both the EEOC and the DOJ’s Civil Rights Division have authority to litigate systemic discrimination or pattern or practice cases under Title VII of the 1964 Civil Rights Act.  The EEOC handles systemic discrimination cases on behalf of employees in the private and federal sector while the Civil Rights Division litigates pattern or practice cases on behalf of persons employed by state and local governments.  In addition, the EEOC also has the ability to litigate systemic discrimination cases under many of the other laws that it enforces, such as the Age Discrimination in Employment Act and the Americans with Disabilities Act.

Systemic discrimination cases are important to the EEOC’s goal of eliminating employment discrimination because such cases often gain nationwide attention, can lead to large settlements or damage awards, and can impact a broad section of an industry or a profession.  Private employers should be aware that the EEOC often utilizes information that it gathers from individual charges and requests for information to build a case for potential systemic discrimination claims.

The EEOC’s fiscal year data, which ended September 30, 2009, reflects increases in certain types of discrimination and retaliation complaints.  Notably, disability complaints increased by 10 percent, from 19,453 to 21,451; national origin complaints increased 5 percent, from 10,601 to 11,134; and religious discrimination claims increased 3 percent, from 3,273 to 3,386.  Also, retaliation charges reached a record high of 2009, going from 32,690 to 33,613 over the span of a year.  Meanwhile, although the number of age bias claims decreased from 24,582 in 2008 to 22,778 in 2009, it was still the second-highest total ever. The EEOC also reported that it recovered a record high of $294 million through administrative enforcement and mediation. 

According to Stuart J. Ishimaru, acting chairman of the EEOC, “[t]he latest data tell us that, as the first decade of the 21st century comes to a close, the commission’s work is far from finished….Employers must step up their efforts to foster discrimination-free and inclusive workplaces, or risk enforcement and litigation by the EEOC.” 

Employers will likely see similar rises in liability risks and activity in the area of discrimination and retaliation in year 2010, particularly in light of the ADA Amendments Act of 2008, which went into effect on January 1, 2009, and expands the scope of the Americans with Disabilities Act by reversing or nullifying several Supreme Court rulings that significantly narrowed the scope of protection under the ADA. Similarly, the EEOC’s Fiscal Year 2010 Congressional Budget Justification includes, as the EEOC’s objectives for Year 2010, an increased focus on combating systemic discrimination (unlawful patterns or practices of discrimination which have a broad impact on an industry, profession, company, or geographic location) as well as charges raising priority, novel or emerging legal issues in the context of race discrimination.

To help manage exposure, employers should revisit their handbooks, policies, and day-to-day practices, and should take steps to make certain that their supervisors and human resources staff are trained to both identify and properly address potential discrimination and retaliation issues.
 

Facebook also played a prominent role in another recent legal case, Leduc v. Roman, 2009 CanLII 6838 (ON S.C.).  A plaintiff injured in a car accident alleged that he was suffering severe loss of enjoyment of life.  The defendant argued that photos and text on the plaintiff’s Facebook page might tell a different story.  An appellate court ruled that the material should have been produced in discovery, even if privacy issues might be implicated.

Individuals who post information on Facebook and other social media are not the only ones who face risks.  Currently the Equal Employment Opportunity Commission (EEOC) is considering the role that social media might play in actions under the Genetic Information Nondiscrimination Act (GINA), which became effective in November 2009.  GINA prohibits employers from making decisions based on genetic information, which includes information showing genetic predisposition to medical problems such as family medical history.  Because individuals might post such information on social media sites, employers easily could obtain such information.

Many employers search for information about job applicants and employees on social media sites.  Currently there are no prohibitions against doing so.  The prevailing rationale is that information made available to the public is equally available to employers.  Although GINA does not prohibit employers from obtaining genetic information through lawful internet searches, it does prohibit employers from making adverse employment decisions based on such information.  Once an employer obtains such information, from whatever source, the employee or the EEOC could argue that an adverse decision was motivated by such information. 

While individuals should exercise caution in the type of information they post about themselves on social media sites, employers also should beware of trying to obtain too much information about their employees and applicants.  A possible rationale for a legal challenge would be that employers would not seek such information if they did not intend to use it.  Thus, social media will continue to pose risks for employees and employers alike.

Solis said the DOL will be working with "advocacy groups and other stakeholders" to develop and distribute campaign materials to workers.  She noted that this initiative signifies her intent to increase both employee outreach efforts and enforcement efforts against employers who are accused of violating the law.  Solis had a strong rebuke for employers who are not in compliance with minimum wage and overtime standards: "There is no excuse for employers who disregard federal labor standards - especially those that are designed to protect the most vulnerable in the workplace."
 
To help support this effort, Solis has hired 250 new wage and hour investigators, who she says will ensure that the DOL can properly respond to complaints and "undertake more targeted enforcement."  Solis vows that the DOL "will not rest until the law is followed by every employer."
 
We have commented previously that the federal agencies charged with enforcing workplace protection laws, such as EEOC, OSHA, and NLRB, all have indicated that they will be pursuing employee complaints more aggressively.  Solis' recent announcement is yet another example that the Obama administration is taking a more employee friendly approach to federal enforcement.  Employers should be taking steps now to ensure that their pay practices comply with the FLSA and applicable state wage and hour laws, which may include a privileged pay practices audit by experienced legal counsel.
 

Genetic information includes information about an individual's genetic makeup or propensities (such as predisposition for medical problems) and those of an individual’s family members, and any information about diseases, disorders, or conditions that the individual’s family member has experienced.

Enforcement and remedies under GINA will be similar to those available under Title VII of the Civil Rights Act of 1964, as amended.  Thus, employers will face the possibility of increased litigation over claims of genetic discrimination.  Like other federal equal employment opportunity laws, GINA also prohibits employers from retaliating against a person for opposing or complaining about discrimination, filing a charge of discrimination, or participating in an employment discrimination inquiry, investigation or lawsuit.

Last month, the EEOC revised its “Equal Employment Opportunity is the Law” poster, which is a mandatory posting for covered employers, to include information about GINA.

Travel.  Employers should never require anyone who is exhibiting flu like symptoms to travel.  Also, the CDC has clear guidelines regarding which populations are at most risk for serious complications from H1N1.  Employees who fall within these risk categories may balk at travel to areas that do not have an appropriate level of health care.  Employers should try to work around such issues by postponing travel or using videoconference or other options to avoid travel to areas without sophisticated medical facilities.  For those employees who are able to travel without increased risk, employers should keep them informed of screening issues at their destinations.  For example, Japan and China are screening arriving passengers for flu like symptoms.  

Sickness at Work.  Of course, all employees who are exhibiting flu like symptoms at work should be sent home.  The current CDC guidelines are that individuals who do not work in health care should stay home from work until they have been fever-free for at least 24 hours.  This guidance is not foolproof.  Individuals can continue to spread the flu virus for days after they have stopped running a fever.  However, this approach should at least remove the obviously contagious from the workplace.  Some employers are going further and requiring employees who have family members with H1N1 to stay home due to the risk that the employee may be carrying the virus.  This precaution is not recommended, as it will likely have little impact on disease transmission in the workplace. 

Notifying Co-workers of an Employee’s H1N1 Diagnosis.  The EEOC has taken the position that employers cannot share information that a co-worker has H1N1 to others in the workplace who could have been exposed.  Clearly, this information cannot be shared if the employer only learned of the diagnosis through HIPAA protected information, and management should not ask employees who are out sick what is wrong with them.  However, where an employee with the flu has volunteered to management his or her diagnosis, the EEOC’s gag-rule seems beyond the scope of supporting law.  Employers should understand that there is legal risk associated with sharing this information (due to the EEOC’s position).  However, many employers are sharing the information with co-workers on a case by case basis if the circumstances warrant such steps, such as if the exposed co-workers are known to fall within one of the high risk categories (e.g., pregnancy).

Under Lipnic’s leadership, the agency made the first revisions to the union financial disclosure regulations in forty years, and the Office of Federal Contract Compliance Programs (OFCCP) issued its first compensation guidance and regulations.  Lipnic also served as counsel for the House Committee on Education and Labor.  Before her work for Congress, Lipnic spent six years as in-house labor and employment counsel for the U.S. Postal Service, then the largest employer in the country.  Most recently, 1she has been Of Counsel with law firm Seyfarth Shaw LLP.   She received a B.A. from Allegheny College in 1982, and graduated from the George Mason University School of Law in 1991.  She is admitted to the Pennsylvania bar.

In July 2009, the President named Jacqueline A. Berrien as the next Chair of the EEOC.  Berrien has a strong background in civil rights advocacy, and particularly in the area of voting rights.  Since September, 2004, Berrien has been the Associate Director-Counsel for the National Association for the Advancement of Colored People (NAACP)’s Legal Defense and Educational Fund (LDF).  In that capacity, she supervises litigation, public education, and organizational work.  From 2001-2004, Berrien was a Program Officer in the Governance and Civil Society Unit of the Ford Foundation’s Peace and Social Justice Program.  Before that, she was an attorney with the Voting Rights Projects of the Lawyers’ Committee for Civil Rights and then Assistant Counsel for the LDF, where she coordinated the areas of voting rights and political participation. 

Berrien received a B.A. with high honors in government from Oberlin College.  She graduated from Harvard Law School, where she was General Editor of the Harvard Civil Rights-Civil Liberties Law Review.  She began her legal career by clerking for the Honorable U.W. Clemon, who was the first African-American U.S. District Court Judge in Birmingham, Alabama.  She has represented African-American voters before the United States Supreme Court and various U.S. Courts of Appeals and U.S. District Courts.  She also has taught trial advocacy at the Harvard and Fordham law schools, and is an Adjunct Professor of Law at New York Law School. 

In September 2009, President Obama chose Chai R. Feldblum to fill another vacancy on the EEOC.  Feldblum is a law professor at the Georgetown University Law Center, where she has taught since 1991.  She specializes in disability discrimination and gay and lesbian rights.  If confirmed, she will serve a five-year term.  Before Georgetown, Feldblum was legislative counsel to the American Civil Liberties Union (ACLU)’s AIDS Project, where she led efforts (among others) to draft and negotiate the Americans with Disabilities Act of 1990.  She also has also been instrumental in supporting the more recent ADA Amendments Act of 2008, and is considered an expert on the proposed Employment Nondiscrimination Act, which if enacted would prohibit discrimination based on sexual orientation.

Feldblum received her J.D. from Harvard Law School and her undergraduate degree from Barnard College.  She clerked for Judge Frank M. Coffin on the First Circuit Court of Appeals and for Justice Harry A. Blackmun on the U.S. Supreme Court.

All these nominations require Senate confirmation.  They are currently pending before the Senate’s Health, Education, Labor and Pensions Committee.  Some commentators speculate that Lipnic’s recent nomination will help speed along those of Berrien and Feldblum. 

President Obama has at least one other EEOC appointment on the horizon.  He will need to replace Commissioner Constance Baker, whose term expires in 2011. 

These new EEOC appointments may lead to new enforcement and litigation goals and priorities.  The Commission already has stepped up enforcement activity and likely will continue increasing the overall number of cases filed, particularly those involving systemic discrimination.  Focus likely will turn also to reducing the EEOC’s significant backload of charges, which has more than doubled since 2004.