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

The Supreme Court’s Decision in Gross
In Gross, the Supreme Court ruled that plaintiffs must prove that their age was the “but for” cause of the adverse employment action to establish an age discrimination claim under the ADEA.  By doing so, the Court eliminated the use of the mixed motive theory to prove discrimination in ADEA actions.  As a result, plaintiffs cannot satisfy their burdens of proof by merely showing that age was a motivating factor in the adverse employment action.  Critics of Gross believe that the decision makes it nearly impossible for plaintiffs to win age discrimination claims unless they have the equivalent of a smoking gun. 

Responding to Gross
Currently H.R. 3721 has 32 co-sponsors and S. 1756 has 23 co-sponsors.  The bills are identical and their proponents hope that they will return age discrimination law to pre-Gross standards.  Specifically, the legislation establishes that the standard of proof for claims under the ADEA is “no different” from the mixed motive theory used in Title VII claims.  Additionally, the legislation states that the burden-shifting framework of McDonnell Douglas v. Green, 411 U.S. 792 (1973) applies to ADEA claims. 

Not Just Age Discrimination
Although the title of the legislation refers to age do not be fooled - the Protecting Older Workers Against Discrimination Act involves much more than the protected class of age.  In fact, the Act explicitly states that “the standard for proving unlawful disparate treatment under the [ADEA] and other anti-discrimination and anti-retaliation laws is no different than the standard for making such proof under [T]itle VII.”  With this language, the Act sweeps all other claims of discrimination or retaliation into its scope and as a result it has the potential to significantly impact numerous federal discrimination and retaliation laws.  Based on this, it seems apparent that the Act does more than just return age discrimination claims to the pre-Gross standard of proof. 

Clarification or Confusion?
The Act was created to clarify the standard of proof in age ADEA claims and to correct the perceived “misconceptions” relied on by the Supreme Court in Gross.  Yet, if this legislation is passed in its current form, it is likely that instead of simply bringing clarity to age discrimination claims, it will instead muddy the water in all other discrimination and retaliation claims.  The Act’s reference to “other anti-discrimination and anti-retaliation law” is not only broad but also ambiguous.  It will be necessary to turn to the courts for guidance on this ambiguity.  The Act will need to be further explained and this will likely be done through litigation where plaintiffs will rely on the Act’s broad scope to test the water with their various discrimination and retaliation claims.  Because the reach of this Act is beyond just age discrimination, it is important to track its progress and be alert to its potential affect on all “other anti-discrimination and anti-retaliation laws.”

This Ninth Circuit ruling on remedies for an ADA retaliation claim is significant for several reasons.  The Ninth Circuit is generally one of the most pro-employee jurisdictions.  It is, therefore, noteworthy that the Alvarado Court declined an opportunity to expand the kinds of relief awarded for an ADA retaliation claim.  The court had a relatively easy opportunity to read into the ADA statute the remedy of punitive and compensatory damages for a retaliation claim, but instead used the tools of statutory construction and avoided reading language into the statute that is not already there.  In doing so, the Ninth Circuit overruled several district court decisions that previously found punitive and compensatory damages for ADA retaliation claims when it could easily have opted to uphold those pro-employee decisions.  This holding suggests that at least one panel of the court is receptive to arguments for strict statutory interpretation.  Here, the court properly followed the tenets of statutory construction -- where a statute is unambiguous, the court must interpret it as written.  The decision is an encouraging sign that strict construction arguments remain a robust defense to expansive damages claims, even in traditionally plaintiff-friendly jurisdictions.

Employee’s Administrative Claim and District Court Claim Dismissed
David Stone filed a retaliation claim against his former employer, Instrumentation Laboratory Company, with the Occupational Safety and Health Administration pursuant to the Sarbanes-Oxley Act.  After OSHA issued its preliminary findings, Stone timely objected to them and requested a hearing before an ALJ.  ILC filed a motion for summary decision before the ALJ, which the ALJ granted.  The Administrative Review Board thereafter granted Stone’s petition for review of the ALJ’s order.  Before his initial brief to the Administrative Review Board was due, Stone notified the Board that he was going to bring a de novo action in federal district court, and the Board thereafter dismissed the appeal.

ILC filed a motion to dismiss in the district court pursuant to Federal Rule of Civil Procedure 12(b)(6), which the court granted, finding that the ALJ’s ruling was a “final judgment on the merits” for the purposes of collateral estoppel.  The court found that permitting Stone to pursue relief in district court would be “wasteful,” required the Administrative Review Board to rule on Stone’s appeal, and stayed Stone’s federal court proceedings.  When Stone refused to further prosecute his appeal before the Administrative Review Board, the Board entered a final order of dismissal and the district court entered a final judgment also dismissing his claim.

Court of Appeals Restores Employee’s Claim
Stone appealed the district court’s dismissal of his claim arguing “that as a Sarbanes-Oxley whistleblower complainant, he is entitled to a de novo review in federal district court because the Secretary of Labor did not reach a ‘final decision’ within 180 days, as required by the Sarbanes-Oxley Act.  ILC argued the Act does not “abrogate the district court’s long-recognized power to apply principles of preclusion to avoid duplicative litigation.”

The court first looked to the plain language of the statute and concluded that it unambiguously permits a whistleblower complainant to bring an action for de novo review in district court if the Secretary of Labor has not issued a final decision within 180 days of the complainant filing an administrative complaint.  The court held that “[i]n applying preclusion principles, the district court strayed from the plain and unambiguous meaning of [the Sarbanes-Oxley Act]” which does not merely give the federal district court jurisdiction over a complainant’s action, but rather gives a complainant a “statutory right” to a federal district court’s de novo review.  The court explained that the district court should not have looked to any Department of Labor interpretive regulations or the Secretary’s comments to such regulations to come to a different conclusion because the statute itself is clear.  Citing Astoria Federal Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108 (1991), the court noted that courts do not have free rein to impose preclusion if it was not intended by the legislature.

The court next considered whether the plain language of the statute would lead to an “absurd result” because of the likely duplication of efforts by the ALJ and district court.  The Secretary of Labor had previously commented that it “anticipates that Federal courts will apply [preclusion] principles if a complainant brings a new action in Federal court following extensive litigation before the Department that has resulted in a decision by an administrative law judge or the Secretary.”  However, the court ruled that the Secretary’s comments “cannot be squared with the statutory language chosen by Congress,” nor does the Secretary or ILC “present a compelling argument as to why such duplication is ‘absurd.’”  The Court explained that Congress purposely chose an “aggressive timetable for resolving whistleblower claims,” a “natural result” of which is duplication if the Department does not resolve the claim within the prescribed timeframe.  If the timetable does not work in practice, it must be resolved by Congress, not the courts.

Given the unambiguous language of the Sarbanes-Oxley Act and the absence of the potential for an “absurd result,” the court held that Stone was entitled to de novo review of his whistleblower claim in the district court and, accordingly, vacated the dismissal and remanded to the district court.  The result for employers is the proverbial “second bite at the apple” for Sarbanes-Oxley plaintiffs.

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.
 

In Convertino, the plaintiff, Assistant U. S. Attorney Richard Convertino, filed suit against his employer, the U. S. Department of Justice (“DOJ”), and against Eastern District of Michigan First Assistant U. S. Attorney Jonathan Tukel.  The complaint alleged that Convertino was retaliated against for certain testimony before Congress and that, in violation of the Privacy Act, the DOJ improperly leaked information regarding an investigation into Convertino’s potential prosecutorial misconduct.  The retaliation claim (the only claim alleged against Tukel) ultimately was dismissed for lack of subject matter jurisdiction; however, the parties conducted discovery related to the Privacy Act claim. 

Although the claim against Tukel was dismissed, a discovery dispute resulted in the Court’s review of 36 emails between Tukel and his personal counsel, sent and received using Tukel’s DOJ email account, to determine whether they were protected by the attorney-client privilege.  Tukel intervened in the discovery dispute to assert privilege over the email communications.  Plaintiff Convertino took the position that Tukel waived his right to assert the attorney-client privilege because the communications were made using the DOJ’s email account. 

Judge Lamberth upheld the privilege.  In so doing, he articulated that application of the privilege requires a case by case analysis to determine whether there is a subjective expectation of confidentiality that is objectively reasonable, based on the following:  (1) whether the employer maintains a policy banning personal or other objectionable use; (2) whether the employer monitors the use of the employee’s computer or email; (3) whether third parties have a right of access to the computer or email; and (4) whether the employer notified the employee, or whether the employee was aware, of the employer’s use and monitoring policies.  The Court found that Tukel’s expectation of privacy was reasonable because, according to the opinion, the DOJ does not ban personal use of its email system, Tukel attempted to delete the email, and Tukel was unaware the DOJ “would be regularly accessing and saving e-mails sent from his account.” 

This opinion highlights why employers should develop, maintain, disseminate, and periodically update clear policies regarding acceptable practices for company information technology.  Such policies should include, among other things, guidelines governing personal and prohibited uses and statements related to privacy and confidentiality.  Taking such steps can reduce any arguable expectation of privacy and prevent employees from shielding their personal use of company resources from discovery in litigation against the company.