Sixth Circuit Affirms Dismissal of Race Discrimination Claims Where Newly Hired Co-Workers Were Paid More and Had More Job Related Education and Experience

Last week, the Sixth Circuit affirmed an employer’s summary judgment on race discrimination claims challenging common pay and promotional practices. Woods v. FacilitySource LLC, No. 15-3138 (6^th Cir. 2-3-16).  The Court also clarified what constitutes a Charge of Discrimination.  In affirming dismissal of the claims, the Court found that it was not discriminatory for the employer to pay new hires – with higher and more job-related college education – more than long-time employees without a college education or with only a fine arts degree.   The Court also recognized that when an employer fails to post promotional openings for Senior Account Managers, a plaintiff need not prove that he applied for a promotion in order to challenge promotions that were given to those outside his protected class.  Nonetheless, the Court found that individuals with higher levels and/or more job-related education and prior job experience were more qualified for those promotions than the plaintiffs.  Finally, while the Court found that a plaintiff – who was the only African-American manager - identified inappropriate racial comments and racial insensitivity in the workplace, it was not severe or pervasive enough to constitute a hostile work environment.   

According to the Court’s opinion, one of the plaintiffs was the employer’s only African-American supervisor and the other plaintiff was his domestic partner who alleged that he was discriminated against because of his association with the other plaintiff.  They had been hired in 2005 at approximately $10/hour, had been promoted to the positions of Account Manager and were making approximately $42,000/year at the time that they filed their Charges.  Of the 26 other Account Managers, all but one was hired after them, 12 were hired after 2010 and most were paid significantly more than them, including 11 of the newly hired managers.   The employer defended the higher salaries paid to the other Account Managers on the basis that the market after 2010 was competitive and that they needed to increase the level of college education and prior management experience required for the positions and the starting salaries.  While the plaintiffs conceded the fairness of paying more for greater education and experience, they felt that their salaries should have been increased as well to reflect their greater seniority with the employer.   During pre-trial discovery, the employer discovered that one of the plaintiffs had made misrepresentations on his job application about having a high school diploma (which he lacked) and voluntarily leaving a job from which he was actually involuntarily terminated (when he had similarly lied on a job application).

Charge of Discrimination.  The plaintiffs sent notarized letters (signed under penalty of perjury) to the EEOC and OCRC and completed intake questionnaires, but never signed or dated official Charge of Discrimination forms.  Instead, they requested and received right-to-sue letters from the EEOC and filed suit.  The district court found that they exhausted their administrative remedies because, among other things, the EEOC treated their letters and questionnaires as Charges, but the EEOC filed an amicus brief indicating that this factor was irrelevant. The Court agreed that the EEOC’s treatment of the letters and questionnaires was irrelevant, but still found that the plaintiffs had exhausted their administrative remedies because the plaintiffs had filed Charges giving notice of their allegations and requesting the agencies to take action.

Pay Discrimination.  The employer conceded that the plaintiffs had alleged a prima facie case because they were paid less than all of their fellow Account Managers.  On appeal, the employer contended that the other Account Managers were more qualified than the plaintiffs and were paid more on account of a factor other than race.  In particular, the employer increased the starting salary for the position in 2010 to reflect increased requirements for college and job-related prior experience.  This resulted in virtually all of the new hires being paid more than most of the existing Account Managers, including plaintiffs.  The Court found this to be a non-discriminatory reason: The plaintiffs’

belief that seniority should have been given equal or greater weight than educational and experiential accomplishments does not mean that the defendants were guilty of wage discrimination simply because they viewed other criteria as more germane to their salary-determination decision.

As for the other Account Managers hired before 2010 who were also paid more than the plaintiffs, the Court found that they similarly possessed greater education (i.e., college degrees) and more relevant job experience than the plaintiffs.  One of the plaintiffs did not even have a high school degree and the other had a fine arts degree, unlike business, marketing or communications majors who had higher salaries.   In other words, the court found that a fine arts degree did not justify the same amount of salary paid to co-workers with a marketing degree or business classes:

Clearly, skills gained from such a [fine arts] degree were not as immediately transferrable to Lorenzo’s job at FacilitySource as were those from the degrees obtained and courses taken by other individuals in management and business related subjects.

Promotions.  The employer promoted a few Account Managers in to Senior Account Manager positions.  Even though the plaintiffs did not apply for these promotions, the Court found this was unnecessary in light of the employer’s failure to post the positions:

[I]n failure to promote cases a plaintiff does not have to establish that he applied for and was considered for the promotion when the employer does not notify its employees of the available promotion or does not provide a formal mechanism for expressing interest in the promotion. Instead, the company is held to a duty to consider all those who might reasonably be interested in a promotion were its availability made generally known.

Nonetheless, the plaintiffs could not prevail because one of them lacked the requisite college degree and the other was less qualified than the individuals ultimately promoted due to their more relevant college courses.

Hostile Work Environment.  The plaintiff was able to identify race-based comments and that clients were rarely introduced to him during walk-arounds unless they were also African-American or specifically requested to meet with him. “When directed toward or used to describe an African-American employee, especially the sole African-American employee in a management position, such comments and conduct must be considered both inappropriate and racially insensitive.”  However, the plaintiff never explained how this conduct was so offensive that it interfered with his work.   He was ultimately fired because of dishonesty on his job application, not because of his job performance.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Divided Supreme Court: Does a Charge by Any Other Name Still Smell As Sweet?

On Wednesday, a divided Supreme Court ruled that the ADEA requirement for filing a Charge with the EEOC at least 60 days before initiating an ADEA lawsuit can be satisfied by the mere filing of an intake questionnaire and affidavit with the EEOC even when the EEOC never created a Charge form, never notified or served a Charge or other document with the Charging Party’s allegations to the employer and the plaintiff never signed or filed an actual Charge form with the EEOC. Federal Express Corp. v. Holowecki, No. 06-1322 (2/27/08).

The ADEA – at 29 U.S.C. § 626(d) – provides that “[n]o civil action may be commenced by an individual under this section until 60 days after a charge alleging unlawful discrimination has been filed with the” EEOC. The ADEA also requires the charge to be filed by the employee within so many days of the unlawful employment practice. Once the Charge has been filed, the ADEA requires the EEOC to “promptly notify all persons named in such charge as prospective defendants in the action and shall promptly seek to eliminate any alleged unlawful practice by informal methods of conciliation, conference, and persuasion." 29 U. S. C. §626(d). However, the ADEA does not define “charge.”

In this case, the plaintiff employee completed and submitted an Intake Questionnaire to the EEOC on December 11, 2001, along with a signed affidavit setting forth her allegations in more detail. The EEOC did not promptly process the Intake Questionnaire, prepare a formal Charge form or notify the employer of the plaintiff’s allegations or serve it with a Charge. Nonetheless, the plaintiff -- along with several other employees – filed her ADEA lawsuit on April 30, 2002. Only then did the EEOC prepare, file and serve a Charge on the employer. The trial court dismissed the plaintiff’s claims on the grounds that her Intake Questionnaire was not a “charge” as required by the ADEA. The Second Circuit Court of Appeals reversed and, recognizing a conflict among the various Circuits on this issue, the Supreme Court affirmed the appellate court.

The Court found that the EEOC regulatory definition of Charge was scattered among several regulations and was vague. For instance, “one of the regulations, 29 CFR §1626.3 . . . says: "charge shall mean a statement filed with the Commission by or on behalf of an aggrieved person which alleges that the named prospective defendant has engaged in or is about to engage in actions in violation of the Act." Another regulation – § 1626.8(a) indicates that a "charge should contain": (1)-(2) the names, addresses, and telephone numbers of the Charging Party and the Respondent; (3) a statement of facts describing the alleged discriminatory act; (4) the number of employees of the charged employer; and (5) a statement indicating whether the charging party has initiated state proceedings. Yet another regulation -- §1626.8(b) – limits the prior requirements “by stating that a charge is ‘sufficient’ if it meets the requirements of §1626.6--i.e., if it is ‘in writing and ... name[s] the prospective respondent and ... generally allege[s] the discriminatory act(s).’" The EEOC asserted on its own behalf that the regulations governed only the filing of a Charge and did not define Charge itself or what it must contain. While the EEOC asserted that the plaintiff’s document satisfied the requirement of a Charge, not all documents necessarily would or should do so. In particular, the EEOC expressed concern with interpreting all documents as Charges if they contain the name of an employer and allegations of discrimination because some employees merely want information from the EEOC and do not want their employer to be notified of the allegations.

While the Court recognized the EEOC’s deficiencies in administering the ADEA, it still deferred to the EEOC’s greater familiarity with the statute. The Court concluded “In addition to the information required by the regulations, i.e., an allegation and the name of the charged party, if a filing is to be deemed a charge it must be reasonably construed as a request for the agency to take remedial action to protect the employee's rights or otherwise settle a dispute between the employer and the employee.”

The Court refused to condition “charge” on being served on the employer and giving the employer the chance to conciliate or mediate the allegations before the employee gained the right to file an ADEA lawsuit. “The statute requires the aggrieved individual to file a charge before filing a lawsuit; it does not condition the individual's right to sue upon the agency taking any action.” Moreover, it would be impractical and unfair to the employee to condition a “charge” on the EEOC taking action after the employee has done everything he or she is required to do by the statute when the employee has no control over the EEOC.

Applying this new standard to the facts of the lawsuit, the Court found that the plaintiff’s Intake Questionnaire by itself did not satisfy the new test because, although it provided most of the necessary information, it did not request the EEOC to remedy the alleged discrimination. However, the affidavit which was attached to the Intake Questionnaire ended with the sentence: "[p]lease force Federal Express to end their age discrimination plan so we can finish out our careers absent the unfairness and hostile work environment created within their application of Best Practice/High-Velocity Culture Change." Taken together, the Court construed the Intake Questionnaire and attached affidavit as satisfying the “charge” requirement. The Court did so even though the plaintiff had specifically requested the EEOC to keep the affidavit confidential until formal proceedings were commenced because the plaintiff had also authorized the EEOC in the Intake Questionnaire to notify her employer.

Even though the Court deferred to the EEOC’s administration of the plaintiff’s claim, it also found that the EEOC gave “short shrift” to the employer’s interests as set forth in the ADEA because it was given no notice of the employee’s Charge before she filed suit. “The court that hears the merits of this litigation can attempt to remedy this deficiency by staying the proceedings to allow an opportunity for conciliation and settlement. True, that remedy would be imperfect. Once the adversary process has begun a dispute may be in a more rigid cast than if conciliation had been attempted at the outset.” Of course, that is an understatement since any employer faced with a lawsuit knows that it is much easier to resolve the dispute at the agency stage than after the employee’s attorney had taken control and has expended significant sums in preparing the lawsuit. The Court also encouraged the EEOC to improve its regulations to avoid similar miscommunications in the future.

Employers may find little consolation in the dissent:

“Today the Court decides that a “charge” of age discrimination under the Age Discrimination in Employment Act of 1967 (ADEA) is whatever the Equal Employment Opportunity Commission (EEOC) says it is. The filing at issue in this case did not state that it was a charge and did not include a charge form; to the contrary, it included a form that expressly stated it was for the purpose of ‘precharge’ counseling. What is more, the EEOC did not assign it a charge number, notify the employer of the complainant’s allegations, or commence enforcement proceedings. Notwithstanding these facts, the Court concludes, counterintuitively, that respondent’s filing is a charge because it manifests an intent for the EEOC to take ‘some action.’”

Insomniacs can read the full decision (and dissent by Justices Thomas and Scalia) at http://www.supremecourtus.gov/opinions/07pdf/06-1322.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.