Sixth Circuit Affirms §1927 Sanctions on Plaintiff’s Attorney for Maintaining Untimely ADA Lawsuit Where Plaintiff Failed to Notify EEOC of Changed Address

Yesterday, the Sixth Circuit affirmed sanctions against a plaintiff’s attorney under §1927 in the amount of $25,995.32 for pursuing an ADA lawsuit that was not filed until more than nine months after the EEOC mailed his client its right-to-sue letter.  Carter v. Hickory Healthcare, Inc. No. 17-4199 (6th Cir. 9-27-18).  The plaintiff had notified the OCRC of her change of address, but had failed to similarly notify the EEOC. Thus, when the EEOC finally mailed her RTS letter, it was sent to her former address and her attorney did not discover this mistake for months.  The Court rejected a tolling argument based on the EEOC’s failure to mail a copy to her attorney (whose address had not changed). “It thus is not true that “a failure by the EEOC to copy counsel on a right-to-sue letter prevents the ninety-day period from running.”  Ball v. Abbott Advert., Inc., 864 F.2d 419, 421 (6th Cir. 1988).”

According to the Court’s opinion, the plaintiff had filed her Charge of Discrimination six years earlier in 2007 with the Ohio Civil Rights Commission and it was dual filed with the EEOC.  The OCRC ultimately found in 2013 that she had been subject to unlawful discrimination when she was terminated for refusing to monitor client smoking breaks that aggravated her asthma after previously notifying the defendant employer of her medical condition, which it had accommodated until she was assigned a new supervisor.   While the OCRC processed her dual-filed charge, the plaintiff had moved, had notified the OCRC of her change of address, but failed to similarly notify the EEOC.  Although her attorney requested that the EEOC issue her a RTS letter, he apparently similarly failed to notify the EEOC of her new address.  The EEOC mailed the RTS letter to her former address and this was not discovered by her attorney for approximately six months, even though the statute of limitations to file an ADA action is 90 days after the RTS letter has been issued.  The 90 days begins to run on the fifth day after the EEOC mails the RTS.  

[A] judge may impose sanctions under § 1927 when a lawyer objectively “falls short of the obligations owed by a member of the bar to the court.”  Red Carpet Studios Div. of Source Advantage, Ltd. v. Sater, 465 F.3d 642, 646 (6th Cir. 2006) (quotation omitted).  The lawyer need not have “subjective bad faith” but must act with “something more than negligence or incompetence.”  Id.  A court may impose the sanction if an attorney “abuses the judicial process or knowingly disregards the risk” that he will needlessly multiply the proceedings.  Id.  Maintaining a clearly time-barred lawsuit constitutes a classic example of conduct that warrants a sanction.  See, e.g., Davis v. Bowron, 30 F. App’x 373, 376 (6th Cir. 2002).

The Court rejected the argument that the employer defendant failed to mitigate its expenses by waiting to file a summary judgment motion instead of a motion to dismiss soon after the Complaint was filed.  The defendant employer’s attorneys had notified the plaintiff’s attorney in writing that the lawsuit was clearly untimely and so the attorney’s liability began upon the receipt of that letter.   Interestingly, the district court denied the employer’s Motion for Rule 11 sanctions and that decision was not appealed.

The Court similarly rejected the plaintiff’s argument that her notification to the OCRC of her new address should have been sufficient after the OCRC informed her that it would share information with the EEOC because the EEOC rules clearly provide that it must be provided with separate notice. 29 C.F.R. § 1601.7(b).  While her mistake was understandable, it was not excusable.  She could have, for instance, inquired much earlier about why she had not received the RTS notice.

The Court also rejected the attorney’s argument that he thought that equitable tolling would apply to suspend the 90 days due to the mistaken address and the EEOC’s failure to also send him a copy of the RTS letter when it was mailed to his client’s former address.

But these arguments were leaky at best, frivolous at worst.  That a regulation required the Commission to send some types of attorneys a copy of the right-to-sue letter does not justify equitable tolling.  The regulation applies only to public sector claims, not private sector ones like Carter’s.  See 29 C.F.R. §§ 1614.103(b), 1614.605(d).  It thus is not true that “a failure by the EEOC to copy counsel on a right-to-sue letter prevents the ninety-day period from running.”  Ball v. Abbott Advert., Inc., 864 F.2d 419, 421 (6th Cir. 1988).

Much of the opinion discusses the appropriate standard of review of a Magistrate recommendation and appellate jurisdiction.  Neither party raised this on appeal.

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. 

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.

Sixth Circuit Reverses Dismissal of Race Discrimination Claim Where Plaintiff Might Show Continuity of Interests Between Defendants and Respondent Named in EEOC Charge

Two weeks ago, the Sixth Circuit Court of Appeals in Cincinnati reversed the dismissal of a race discrimination complaint where the plaintiff had not named all of the defendants as respondents in her EEOC Charge.  Lockhart v. Holiday Inn Express Southwind, No. 12-6309 (6^th Cir. 7-29-13).  In her EEOC Charge, the plaintiff had named only the trade name of the hotel, as opposed to the name of the partnership or partners who owned it.  In response to her amended complaint (which was filed and served two years after she first filed her lawsuit), the individual defendants raised the affirmative defense that she had failed to exhaust her administrative remedies by first filing an EEOC Charge against them and then successfully moved to dismiss the complaint.   The Sixth Circuit found that the amended complaint’s allegations about ownership were sufficient to survive a motion to dismiss because it asserted a possible identity of interest between the named defendants and EEOC respondent.  Moreover, the Court concluded that the new allegations might relate back to the date that the original complaint had been filed and that the trial court had erred in not considering whether the plaintiff had good cause in failing to serve the complaint upon the defendants within 120 days.

According to the Court’s opinion, after the plaintiff had been fired from her job at the defendant hotel, she filed a Charge of Discrimination with the EEOC naming the trade name of the hotel as the respondent.  When she filed suit pro se, the trial court ordered her to amend her complaint because the defendant hotel was not registered to do business under that name.  She then amended her complaint to name the partnership and the individual partners who owned the hotel.   The individual partners moved to dismiss the amended complaint on the grounds that they had not been named as respondents in her EEOC Charge and it was too late (i.e., more than 300 days since her termination) to do so now.   In other words, the plaintiff had failed to exhaust her administrative remedies by first filing an EEOC Charge against them.  The trial court granted their motion and the Sixth Circuit reversed.

As a general rule, a plaintiff “may only sue an entity for violating civil rights statutes such as Title VII . . . if it named the same entity in its prior EEOC charge.” Szoke v. United Parcel Serv. of Am., Inc., 398 F. App’x 145, 153 (6th Cir. 2010)  . . .  see also 42 U.S.C. § 2000e-5(f)(1). This rule is, however, susceptible to a “limited exception” where there exists a “clear identity of interest” between the party named in the EEOC charge and the unnamed party that was actually sued.

The Sixth Circuit follows tests established by the Seventh and Third Circuits to determine whether a sufficient “identity of interest” exists between the defendant and respondent named in the EEOC Charge.  Under the Seventh Circuit’s test “an identity of interest exists when the unnamed party possesses sufficient notice of the claim to participate in voluntary conciliation proceedings.” Under the Third Circuit’s test, the court will consider the following factors:

 (1) Whether the role of the unnamed party could through reasonable effort by the complainant be ascertained at the time of the filing of the EEOC complaint;

(2) Whether, under the circumstances, the interests of a named [party] are so similar as the unnamed party’s that for the purpose of obtaining voluntary conciliation and compliance it would be unnecessary to include the unnamed party in the EEOC proceedings;

(3) Whether its absence from the EEOC proceedings resulted in actual prejudice to the interests of the unnamed party;

(4) Whether the unnamed party has in some way represented to the complainant that its relationship with the complainant is to be through the named party.

The Sixth Circuit noted that it is inappropriate to dismiss a complaint based on an affirmative defense unless the complaint’s own allegations reveal the defense and legally defeats the claim for relief.  In this case, the complaint alleged that the individual defendants were co-owner/operators of the hotel that employed her.  

This Court has held that there may be an identity of interest between a corporation and its owners. . . . at this stage, the record is insufficiently developed to allow us to conduct the identity-of-interest analyses under Eggleston and Glus. Some, potentially limited, discovery is necessary before it may be determined whether Defendants have a “clear identity of interest” with the party named in Plaintiff’s EEOC charge. Therefore, it was error for the district court to have dismissed Plaintiff’s Title VII claims at this stage in the litigation.

The defendants  also argued that it was too late for her to amend her complaint to include them as defendants because she was required to file suit within 90 days of receiving her EEOC right-to-sue letter and her complaint was not amended and served on them for another two years.

When a plaintiff seeks to amend a complaint to add a party against whom the claim would otherwise be barred by the statute of limitations, the amended pleading is considered to relate back to the date of the original, timely pleading where:

1. “the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading,” see Fed. R. Civ. P. 15(c)(1)(B), and

2. the added party is “served within 120 days after the [initial] complaint is filed . . . [or] the plaintiff shows good cause for the failure [to serve the added party within 120 days], see Fed. R. Civ. P. 4(m).

Fed. R. Civ. P. 15(c)(1)(C). If both these criteria are satisfied, then the party may be added so long as the added party,

3. “received such notice of the action that it will not be prejudiced in defending on the merits,” see Fed. R. Civ. P. 15(c)(1)(C)(i), and

4. “knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity,” see Fed. R. Civ. P. 15(c)(1)(C)(ii).

The Court found the district court erred in applying the 120-day rule “because it can be excused for good cause.”  However, the trial court failed to consider in this case whether the plaintiff had good cause to excuse her non-compliance with the 120-day period.

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.

EEOC Receives and Resolves Record Number of Discrimination Charges in FY 2011

In January, the EEOC reported that it received a record 99,947 Charges of Discrimination and resolved 112,499 pending claims (reducing its backlog for the first time since 2002). Although many Charges cite multiple legal violations, retaliation remains the most frequent cited basis (at 37.4%) followed by race (at 35.4%). The number of sex and race discrimination allegations declined over FY 2010, but the number of age and disability discrimination allegations increased.

"Through its combined enforcement, mediation and litigation programs, the EEOC . . . obtain[ed] a record $455.6 million in relief for private sector, state, and local employees and applicants, a more than $51 million increase from the past fiscal year." The EEOC also filed 300 lawsuits (almost 6/week on average).

Monetary relief for violations of the ADA increased the most over the prior fiscal year, with the EEOC collecting $103.4 million. Back impairments were the most frequently cited impairment under the ADA, followed by other orthopedic impairments, depression, anxiety disorder and diabetes.

This was the first full year for the Genetic Information Nondiscrimination Act (GINA) and the EEOC received 245 charges under this new statute.

More detailed statistics are available from the EEOC's website.

EEOC Obtains $904K Settlement on Behalf of 10 Employees Fired in a RIF Who Alleged Age Discrimination and/or Retaliation.

Yesterday, the EEOC “announced the settlement of its age discrimination lawsuit against Lockheed Martin Global Telecommunications for $773,000 for a class of eight older employees” in addition to the severance pay already received by the eight employees. In addition, “through a separate consent decree filed last year to settle retaliation claims brought in the same lawsuit, “Lockheed Martin has paid $131,000 in damages to two former employees whose severance was withheld because they had pursued administrative complaints with the EEOC.”

"In its suit (05-cv-00287-RWT), filed in the U.S. District Court for the District of Maryland, Southern Division, the EEOC charged that the . . . employer violated the Age Discrimination in Employment Act (ADEA) when it discriminated against the employees, ages 65, 62, 61 (three), 53 and 47. The eight workers were fired during a reduction in force implemented in the COMSAT Mobile Communications Division in October 2000. The back pay remedies received by the claimants are in addition to severance pay already received.”

“In Fiscal Year 2007, the EEOC received 19,103 age discrimination charge filings, a 15% increase from the prior year and the biggest annual increase in five years. Allegations of age bias account for 23% of the agency’s private sector caseload.”

Insomniacs can read the EEOC’s full press release at http://www.eeoc.gov/press/4-7-08a.html.
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.