A Couple of Recent Trial Court Decisions Shows that Truth Can Be Stranger Than Fiction

There have been a few notable trial court decisions within the last month that may interest you.  One deals with a $500K+ age discrimination award and the other concerns vegans and flu shots.   I usually do not report on these  decisions because they sometimes change on appeal and are not binding on other trial courts.  However, they can be indicative of legal issues invading the workplace and demonstrate why it is often best to avoid litigation if possible. 

The verdict receiving the most local media buzz is the $500K+ age discrimination award in Warden v. Ohio Department of Natural Resources.   The Ohio Court of Claims ruled in favor of a retired employee who was rejected for his application to be rehired into his old job (for which he was undeniably the most qualified applicant) because the ODNR applied a new and unpublicized policy during the last recession of not rehiring retirees into their former jobs while they were also collecting a pension – a practice referred to as “double dipping.”  A review of the court docket shows that this case is even more interesting (to employment attorneys at least) than the significant monetary judgment reflects or the local media has reported.

As explained in the plaintiff’s summary judgment motion, and the Court’s liability opinion, the plaintiff accepted a two-year buy out and retired in 2006. He was re-hired as an independent contractor to essentially perform his old job for a series of short-term contracts.  When a job similar to his old job was posted, he was encouraged to apply and did so.  His application made it through the screening process and he was interviewed.  The plaintiff received the highest interview scores and several managers/directors went to bat for him to be hired (both before and during the litigation).  At no time during the process was he told about a policy to not hire retirees.  (There was also a factual dispute as to whether the interviewers had been informed of the policy).  The HR Director refused to hire him because he was a retiree.  Therefore, the job went to the next most qualified applicant who was 15 years younger.  The plaintiff’s complaint alleged that his age was a motivating factor in the decision.

The ODNR explained that it had enacted the policy because “double dipping creates a distrust with the public.”  Re-employment of retirees was to be allowed only for short-term contracts where the job required specialized knowledge or experience and a number of factors were to be considered in evaluating exceptions. (The Court only noted one exception which had been made).  While the policy was memorialized in a memorandum by one HR Director, there was no written directive distributed to division heads or HR staff.  The court found that the policy -- against re-hiring retirees collecting a pension -- did not constitute direct evidence of discrimination, but rather, was a legitimate and non-discriminatory reason to reject the plaintiff’s application.  Moreover, the Court also concluded that the plaintiff failed to show that the ODNR’s explanation was pretextual for age discrimination.   Accordingly, the Court rejected the plaintiff’s disparate treatment theory of recovery.

Shockingly, the Court then concluded that the plaintiff should prevail on a disparate impact theory of liability even though this theory was not plead in the Complaint or  even mentioned in the plaintiff’s post-trial brief and no statistical evidence had been presented.  (In fact, the plaintiff’s post-trial brief even cites in its first footnote  to another Court of Claims summary judgment opinion from three years ago which had saved a similar policy from legal challenge).  The Court concluded that any policy which precludes employment on the basis of retirement under Ohio Revised Code § 145.32 necessarily is based on the fact that the individual is over the age of 40 (because no one is eligible to retire below the age of 55 or 30 years of service).  It then disputed the whole basis for public condemnation of double-dipping on the premise that it is legal and saves money because the state contributes less to the pension accrual of an already-retired employee, etc.   Therefore, the  Court found that the policy did not constitute a reasonable factor other than age which could justify the non-hire of the plaintiff.

The defendant employer argued in its Motion for Reconsideration that the evidence showed that the plaintiff was the only individual adversely affected by the ODNR policy.  (It even pointed out that the only time that the plaintiff’s counsel ever mentioned the words “disparate impact,” it was done by mistake and he quickly corrected himself).   Nonetheless, the Court ruled that the plaintiff could prevail on any legal theory supported by the facts and that statistical evidence was not necessary in a disparate impact claim.

Instead of ordering the ODNR to hire the plaintiff, the Court ordered the payment of back and front pay instead.  The plaintiff had indicated that he had only intended to work another five years and the new employee had been working in the job for three years at this point.   This judgment amounted to more than $507K and included his $64K annual starting salary, presumed annual step increases, fringe benefits calculated to equal 34.5% of his salary, $17.3K for the increased tax liability from a lump sum payment, pension accrual, repayment of court costs (including the costs of litigating) and attorney fees of $53,545.   He was also awarded 3% judgment interest.

I expect this decision to be appealed.

Religious Discrimination/Vegans/Flu Shots.  In an opinion written by federal Judge Spiegel in Cincinnati, the Court refused to dismiss a complaint which alleged that a hospital employer violated the plaintiff’s rights under Title VII to exercise her vegan religion by firing her in 2010 for refusing to take a flu shot. (Until the last week, most flu shots could only be manufactured using eggs).   Chenzira v. Cincinnati Children’s Hospital Medical Center, No. 11-CV-917 (S.D. Oh. 12-27-12).  Complaints such as this can only be dismissed if there is no set of facts which could sustain the legal theory.  This is a difficult standard to meet, but many observers were still surprised because veganism is not usually considered to be a religion and a hospital ‘s undue hardship for such a religious accommodation seems to be obvious (although, here, the hospital allegedly used to accommodate the plaintiff in the past).  The result of the Court’s opinion is that the case will proceed with discovery, summary judgment motions and possibly trial if the parties do not first settle the case. 

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.

Supreme Court: Fear of Race Discrimination Lawsuit Cannot Justify Reverse or Other Intentional Race Discrimination if Employer Has Valid Defenses.

In a highly anticipated decision, a 5-4 Supreme Court today reversed a summary judgment decision previously approved by the Supreme Court nominee Sonia Sotomayor. Ricci v. DeStafano, No. 07-1428. The lower courts had upheld the City of New Haven, Connecticut in failing to certify the results of a civil service promotional examination for firefighters on the grounds that the City was concerned that it would be sued for disparate impact race discrimination if it promoted any firefighters based on the test because mostly white and Hispanic firefighters passed the exam and only 9 of the 27 African-American firefighters passed. Because the City’s decision was based entirely on the race of the successful and unsuccessful test takers, it necessarily implicated the intentional discrimination provisions of Title VII of the Civil Right Act. The Court held that “race-based action like the City’s in this case is impermissible under Title VII unless the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute.” The employer cannot justify its actions based solely on the fact that the potential plaintiffs can prove only a prima facie case of discrimination; rather, the employer must also consider its potential defenses before making a race-conscious decision. Because that “strong evidence” was lacking in this case, the Court not only reversed summary judgment for the City it directed that the plaintiffs were entitled to summary judgment on liability.

The Background

According to the Court’s decision, the City Charter required the City to promote firefighters into officer positions based on how they ranked on promotional examinations. The examination consisted of both written and oral portions and required a certain amount of prior job experience and education. The experienced consulting firm hired to design the test analyzed the jobs at issue by interviewing, questioning and observing the incumbent officers.

At every stage of the job analyses, IOS, by deliberate choice, oversampled minority firefighters to ensure that the results—which IOS would use to develop the examinations—would not unintentionally favor white candidates. . . .

For each test, IOS compiled a list of training manuals, Department procedures, and other materials to use as sources for the test questions. IOS presented the proposed sources to the New Haven fire chief and assistant fire chief for their approval. Then, using the approved sources, IOS drafted a multiple-choice test for each position. [Each test consisted of 100 questions and] was written below a 10th grade reading level. After IOS prepared the tests, the City opened a 3-month study period. It gave candidates a list that identified the source material for the questions, including the specific chapters from which the questions were taken.

IOS developed the oral examinations as well. These concentrated on job skills and abilities. Using the job analysis information, IOS wrote hypothetical situations to test incident-command skills, firefighting tactics, interpersonal skills, leadership, and management ability, among other things. Candidates would be presented with these hypotheticals and asked to respond before a panel of three assessors.

All of the assessors were from outside Connecticut and received special training. “Sixty-six percent of the panelists were minorities, and each of the nine three-member assessment panels contained two minority members” (i.e., one white, one Hispanic and one black).

Following the November 2003 examinations, 34 out of the 77 (or 44%) of the candidates passed the lieutenant examination: 25 out of 43 [58%] whites, 6 out of 19 [ 31.5%] blacks, and 3 out of 15 [20%] Hispanics. Because there were 8 vacancies at the time of the examination, the top ten scores were eligible for immediate promotion. All of them were white.

As for the captain exam, 22 of the 41 (or 54%) of the candidates passed: 16 out of 25 whites (64%), 3 out of 8 blacks (37.5%), and 3 out of 8 Hispanics (37.5%). Because there were seven captain vacancies at the time of the examination, 9 candidates were eligible to be considered for an immediate promotion to captain—7 whites and 2 Hispanics.

Although the City had a contractual right to a technical report from the consultant analyzing the test results, instead the City immediately objected to the facial racial disparity in the results. The City told the Civil Service Board that the test results had a disparate impact. Some firefighters – without knowing how they scored – advocated certifying the test results because they had spent a lot of money buying studying materials and a lot of time studying and a new test would take years to develop and administer. Others objected on the grounds that the study materials were too long and expensive. Some suggested that a validation study be conducted.

The Board ultimately requested the consultant to explain how the test had been developed and conducted and also requested an outside panel of experts to review the situation. One of those experts was a competitor of the consultant and he opined that the test results were not surprising, criticized the lack of local input into the test questions and suggested the use of an assessment center which required the candidates to demonstrate their knowledge instead of merely answering questions on a test or in an interview. Another witness – who was black – from the Department of Homeland Security said that the test reviewed relevant and job related information. He suggested that the disparity was somewhat related to the fact that more white candidates took the exam than black candidates. The final “expert” was a college professor who know nothing about firefighting, but who opined that “regardless of what kind of written test we give in this country . . . we can just about predict how many people will pass who are members of under-represented groups. And your data are not that inconsistent with what predictions would say were the case.” Although the results may have been influenced by the fact that the job analysis surveys were initially completed mostly by white firefighters, “no matter what test the City had administered, it would have revealed “a disparity between blacks and whites, Hispanics and whites,” particularly on a written test.” The Board deadlocked on whether to certify the test results, which meant that the results were not certified.

The Litigation

The plaintiffs – 17 white firefighters and 1 Hispanic firefighter – filed suit under §§ 1983 and 1985 and under Title VII against the City and other defendants. The District Court granted summary judgment to the defendants and it was affirmed on appeal. The Second Circuit then considered whether to reconsider the decision en banc, but voted 7-6 against reconsideration.

The issue as framed by the Supreme Court:

The City’s actions would violate the disparate-treatment prohibition of Title VII absent some valid defense. All the evidence demonstrates that the City chose not to certify the examination results because of the statistical disparity based on race—i.e., how minority candidates had performed when compared to white candidates. As the District Court put it, the City rejected the test results because “too many whites and not enough minorities would be promoted were the lists to be certified . . . Without some other justification, this express, race-based decisionmaking violates Title VII’s command that employers cannot take adverse employment actions because of an individual’s race.

While the lower courts found that intentional discrimination could be excused in order to potentially avoid disparate impact liability under Title VII, the Court did not think that this was necessarily so. The plaintiffs argued that it should never be a defense to intentional racial discrimination that the employer was attempting to avoid unintentional discrimination. The defense argued that good faith efforts to avoid unintentional disparate impact should excuse intentional race discrimination. The court found both parties’ arguments to be simplistic and unrealistic. It rejected racial quotas or employer practices seeking a preferred racial balance. It also refused to prefer the disparate treatment provisions of Title VII over the disparate impact provisions.

If an employer cannot rescore a test based on the candidates’ race, §2000e–2(l), then it follows a fortiori that it may not take the greater step of discarding the test altogether to achieve a more desirable racial distribution of promotion-eligible candidates—absent a strong basis in evidence that the test was deficient and that discarding the results is necessary to avoid violating the disparate impact provision. Restricting an employer’s ability to discard test results (and thereby discriminate against qualified candidates on the basis of their race) also is in keeping with Title VII’s express protection of bona fide promotional examinations.
. . .
We consider, therefore, whether the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination. Our task is to provide guidance to employers and courts for situations when these two prohibitions could be in conflict absent a rule to reconcile them. In providing this guidance our decision must be consistent with the important purpose of Title VII—that the workplace be an environment free of discrimination, where race is not a barrier to opportunity.

In reaching a compromise, the Court considered decisions in other areas where it had permitted intentional discrimination. “The Court has held that certain government actions to remedy past racial discrimination—actions that are themselves based on race—are constitutional only where there is a “‘strong basis in evidence’” that the remedial actions were necessary.”

Applying the strong-basis-in-evidence standard to Title VII gives effect to both the disparate-treatment and disparate-impact provisions, allowing violations of one in the name of compliance with the other only in certain, narrow circumstances. The standard leaves ample room for employers’ voluntary compliance efforts, which are essential to the statutory scheme and to Congress’s efforts to eradicate workplace discrimination. . . . And the standard appropriately constrains employers’ discretion in making race-based decisions: It limits that discretion to cases in which there is a strong basis in evidence of disparate-impact liability, but it is not so restrictive that it allows employers to act only when there is a provable, actual violation.

In this case, the City defended its actions on the grounds that the test results had a disparate impact on a racial class (i.e., a neutral practice has a statistically disproportionate affect on a particular group). However, the Court pointed out that the disparate statistics constituted only a prima facie case and that the employer could have defended the results by showing that the test was job related and consistent with business necessity. At that point, the plaintiffs would have had to show that “the employer refuses to adopt an available alternative employment practice that has less disparate impact and serves the employer’s legitimate needs.” In this case, there was no dispute that the group opposing the test results could have met a prima facie case and there was overwhelming evidence that the City could have met its burden of showing the job-related/business necessity defense. There was, however, a question about whether a reasonable alternative existed. The Court rejected challenges that weighing the written and oral portions of the exam differently might have produced different results or that utilizing an assessment center would have been available to the City at the time or produced a different result.

The problem for respondents is that a prima facie case of disparate-impact liability—essentially, a threshold showing of a significant statistical disparity, . . . and nothing more—is far from a strong basis in evidence that the City would have been liable under Title VII had it certified the results. That is because the City could be liable for disparate-impact discrimination only if the examinations were not job related and consistent with business necessity, or if there existed an equally valid, less-discriminatory alternative that served the City’s needs but that the City refused to adopt. §2000e–2(k)(1)(A), (C). We conclude there is no strong basis in evidence to establish that the test was deficient in either of these respects.
. . .
On the record before us, there is no genuine dispute that the City lacked a strong basis in evidence to believe it would face disparate-impact liability if it certified the examination results. In other words, there is no evidence —let alone the required strong basis in evidence—that the tests were flawed because they were not job-related or because other, equally valid and less discriminatory tests were available to the City. Fear of litigation alone cannot justify an employer’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. The City’s discarding the test results was impermissible under Title VII, and summary judgment is appropriate for petitioners on their disparate-treatment claim.

The Court did not address the plaintiffs’ Equal Protection arguments and did

not hold that meeting the strong-basis-in-evidence standard would satisfy the Equal Protection Clause in a future case. . . . Nor do we question an employer’s affirmative efforts to ensure that all groups have a fair opportunity to apply for promotions and to participate in the process by which promotions will be made. But once that process has been established and employers have made clear their selection criteria, they may not then invalidate the test results, thus upsetting an employee’s legitimate expectation not to be judged on the basis of race. Doing so, absent a strong basis in evidence of an impermissible disparate impact, amounts to the sort of racial preference

While employers may consider how to make its employment testing and processes more fair, “under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.”

Insomniacs can read the full decision at http://http://Ricci.

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.