In a ruling that widens the divide between federal appellate courts, the Ninth Circuit sided today with the Seventh Circuit and the National Labor Relations Board (“NLRB”) in holding that the class action waiver provision of a company’s arbitration agreement with employees violates the National Labor Relations Act (“NLRA”). Prior to this decision, the Seventh Circuit was alone in its dissention from the federal majority with respect to this issue.

The United States Supreme Court in AT&T Mobility v. Concepcion made clear that class waivers are enforceable under the Federal Arbitration Act (“FAA”), at least in the context of consumer class actions, and that state laws that inhibit the full effectuation of the FAA are void. The NLRB, however, in its continuing bid to establish its relevance in the contemporary workplace, has challenged class waivers executed by employees; in D.R. Horton, Inc. v. NLRB, the NLRB held in 2012 that employees’ Section 7 rights are violated by such waivers, and that the FAA does not override this right. The NLRB’s ruling in D.R. Horton spawned a great deal of commentary and litigation – the NLRB’s ruling that class waivers are unenforceable was itself rejected by an appellate court in the Fifth Circuit. A host of federal appellate courts, as well as lower courts, have also criticized the NLRB’s ruling and refused to adopt its reasoning. Notably, the Fifth Circuit decision emphasized that the use of class action litigation is a procedural, rather than a substantive right, and that prohibiting class action waivers would discourage arbitration and, thus, violate the spirit and purpose of the FAA.

Continue Reading Ninth Circuit Invalidates Class Waiver in Arbitration Agreement

In a precedent-setting decision, the U.S. Court of Appeals for the Seventh Circuit ruled on July 28th that Title VII does not protect against sexual orientation discrimination.  The case is Kimberly Hively v. Ivy Tech Community College, No. 15‐1720 (7th Cir. July 28, 2016).

The 7th Circuit upheld a district court’s decision to dismiss a lawsuit brought by Kimberly Hively, a lesbian professor, who had sued Ivy Tech Community College, in August 2014.  Hively claimed that she was repeatedly passed over for promotions and a full-time position because of her sexual orientation.

The 42-page unanimous decision is interesting, as while the Court upheld the dismissal of the case, it clearly felt conflicted over what it described as “a paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act.”  (Order at 33.)  Indeed, since Obergefell v. Hodges, 135 S. Ct. 2584 (2015), federal law now guarantees anyone the right to marry another person of the same gender.  However, Title VII also permits an employer to fire an employee for exercising this right.

Continue Reading A Conflicted 7th Circuit Holds Title VII Does Not Cover Sexual Orientation Discrimination

The Supreme Court stayed a Fourth Circuit ruling that requires schools to allow transgender students to use the bathroom of the gender they identify as. We are monitoring the case for its impact on employers going forward. For our past analysis on this issue, please refer to the following posts:

In recent years, state and federal courts have consistently ruled in favor of those seeking to define their gender identity.  However, the Supreme Court has yet to weigh in — a situation that is about to change as the accelerating national discussion of transgender rights finally makes its way to the Supreme Court.

In 2015, G.G., a transgender high school student attending school in Gloucester County, Virginia, challenged his school’s policy requiring students to use restrooms and locker rooms that match their genders assigned at birth.  G.G. alleged that the policy violated both the Constitution’s guarantee of equal protection under the laws and Title IX.  The District Court ignored the constitutional claim and ruled that a 1975 regulation that allows school to provide “separate toilets, locker room, and shower facilities on the basis of sex,” barred his Title IX claim.

This April, the Court of Appeals for the Fourth Circuit reversed the lower court’s decision.  It pointed to the Department of Education’s January 7, 2015 opinion letter from the Department of Education’s Office of Civil Rights, which concluded that if schools opt to separate students in restrooms based on their sex, a school generally must treat transgender students consistent with their gender identity.  Ultimately, a divided Fourth Circuit deferred to the Department of Education’s interpretation of its own regulations.  The Fourth Circuit’s ruling was the first by an appeals court to find that transgender students are protected under federal laws that bar sex-based discrimination.  Further, the Fourth Circuit declined to stay its ruling and remanded the case to the District Court, which issued a preliminary injunction requiring the school board to allow G.G. to use the boys’ restroom while the parties litigate the case on its merits.

Continue Reading Supreme Court Poised to Weigh in on Transgender Rights

Wal-Mart may have felt the first aftershock of the Supreme Court’s March 2016 opinion in Tyson Foods, Inc. v. Bouaphakeo, which undercut overbroad interpretations of its landmark 2011 Wal-Mart v. Dukes decision and found that representative sampling of absent class members is not a per se improper method of establishing class-wide liability or damages.

Unless you’ve been living under a rock, you probably are well aware that on June 26, 2015, the U.S. Supreme Court ruled that same sex couples have a constitutional right to marry and have their marriages recognized across the country.  Obergefell v. Hodges, 135 S. Ct. 1039 (2015).  This was a landmark ruling for

As most lawyers and HR professionals know, on June 1, 2015, Justice Antonin Scalia authored a concise opinion, overturning the Tenth Circuit and holding that Abercrombie & Fitch had intentionally discriminated against Samantha Elauf, a young Muslim job applicant, when it refused to hire her because of concerns about her head scarf.  The company had attempted to defend its hiring decision by arguing that Elauf had never disclosed that she was Muslim, or asked to wear the scarf at work.  Thus, it claimed that it could not have discriminated when it had no knowledge that she needed a religious accommodation.

The Court was unmoved by this argument, and held that Abercrombie’s lack of “specific knowledge” of Ms. Elauf’s need for a religious accommodation was not a defense to the claim.  To the contrary, the Court held that a plaintiff need only show that her need for an accommodation was a “motivating factor” in the employer’s decision in order to prevail. Justice Scalia explained:

An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.  For example, suppose that an employer thinks (but does not know for certain) that a job applicant may be an Orthodox Jew who observes the Sabbath, and thus may be unable to work on Saturday. If the applicant actually requires an accommodation of a religious practice, and the employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII.

The Court thus found that since there was evidence that Abercrombie had known, “or at least suspected” that plaintiff’s head scarf was a religious practice, and considered that headscarf when it decided not to hire her because it violated its “Look” policy, Elauf had presented sufficient evidence to support her claim that her religion was a motivating factor in the hiring decision.  In this regard, the Court noted that Title VII had defined the term “religion” broadly, “to include all aspects of religious policy and observance.”

The Court concluded by noting that the company could not hide behind its “neutral” policy: “Title VII does not demand mere neutrality with regard to religious practices …Rather, it gives them favored treatment, affirmatively obligating employers not to ‘fail or refuse to hire or discharge any individual because of … such individual’s religious observance and practice..”  SO, an employer can have a dress code, but that ‘neutral’ dress code “must give way to the need for an accommodation.”

I have two observations about this decision, which conflict with some commentaries I have read from other management-side lawyers:

  • First, is this decision a significant change in the law or a sharp turn to the plaintiff’s side for SCOTUS?  I say NO, as it has always been the law that an employer cannot consider religion or religious accommodations when it makes hiring decisions
  • Second, was this the correct result, in light of the specific facts?  Yes.  In fact, when considering these facts, one could see why the Court reached the result it did.

In short, employers should not be in a panic over this decision and may need to just re-affirm existing policies in order to remain compliant with the law.
Continue Reading Supreme Court Abercrombie & Fitch Ruling: It’s the Motive that Matters

Under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Equal Employment Opportunity Commission (“EEOC”) is obligated to investigate charges of discrimination and retaliation in the workplace filed by a “person claiming to be aggrieved.”  If the EEOC finds “reasonable cause” to believe that the allegations have merit, it must attempt to

Does an employer have to offer a pregnant employee exactly the same physical accommodations as it does to “other” employees?  Which “other” employees? And how many “other” employees? In a case involving the Pregnancy Discrimination Act, the U.S. Supreme Court’s 6-3 decision today in Young v. United Parcel Service, Inc., No. 12–1226, 575 U. S. ___ (2015) raises these questions without really answering them – leaving a lot of work for the lower courts, and parties in litigation, to do. The Court’s decision today, however, makes clear that an employer who grants accommodations to non-pregnant employees should think twice before denying them to pregnant employees. According to the Supreme Court, that denial may amount to evidence of intentional (and unlawful) discrimination.

Peggy Young, a UPS driver, became pregnant in 2006. Her doctor told her that she should not lift packages weighing more than 20 pounds during  her first 20 weeks of pregnancy and not more than 10 pounds after that. UPS allowed light-duty assignments for certain employees, including drivers who had become disabled on the job, drivers who had lost their Department of Transportation (“DOT”) certifications, and employees who had disabilities covered by the Americans with Disabilities Act. But not for anyone else, including Peggy Young.

Young asked for the same light duty. UPS’s occupational health manager told her that she would not be allowed to work during her pregnancy because she couldn’t satisfy the lifting requirements (sometimes of packages weighing up to 70 pounds). Another manager confirmed that she was “too much of a liability.”

So Young stayed home for the remainder of her pregnancy. She also promptly sued UPS, alleging that UPS’s refusal to give her light duty was intentional discrimination. Her theory was that UPS gave light duty to certain other employees, but not pregnant employees. That, she claimed, violated the Pregnancy Discrimination Act (“PDA”), a 1978 law amending Title VII of the Civil Rights Act of 1964, which prohibits intentional sex discrimination. The PDA contains these magic words: “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work[.]”

In court, Young argued that UPS’s refusal to give her light duty meant that she was not “treated the same” as “other persons” (like disabled employees, or those who had lost DOT certifications) who were “similar in their . . . inability to work.”  UPS said that, since Young was not in the categories of employees for whom UPS gave light duty, UPS hadn’t discriminated against her at all – it had simply treated her like any other “relevant” person who didn’t fall within a covered category. UPS’s argument convinced the trial court, which granted summary judgment, and the Fourth Circuit Court of Appeals, which affirmed the lower court’s decision.

But today, the Supreme Court disagreed. Justice Stephen Breyer’s majority opinion was, in some sense, critical of the positions of both Young and UPS. Young’s argument that as long as an employer accommodates only a subset of workers, pregnant workers must receive the same treatment “proves too much”: according to the Court, the fact that the PDA requires an employer to treat pregnant workers the same as “other persons” doesn’t mean it must treat a pregnant worker the same as “any other person.” That means that if an employer grants an accommodation or benefit to a single employee, the law doesn’t require an employer to automatically give pregnant employees the same thing.
Continue Reading What’s Good for the Goose Is Good for the Gander: The Supreme Court’s Decision in Young v. UPS