Affirmative Action Employer Agrees to Pay $1.5M to Settle OFCCP Allegations of Discriminatory Hiring Process

Today, the U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) announced that Dallas-based Vought Aircraft Industries Inc. would be settling “allegations of hiring discrimination based on race and gender and agreed to pay $1.5 million in back wages to 1,045 applicants. . . . OFCCP investigators found that Vought's hiring process disproportionately eliminated African American and Asian males, as well as all females, applying for the assembly trainee/aircraft assembly beginner jobs. OFCCP concluded that two steps in Vought's hiring process — an application screening and a test — were primarily responsible for the discrimination. Under the terms of the consent decree, Vought will pay the 1,045 rejected applicants $1,377,500 in back pay with interest. The company also will pay about $70,000 for applicants interested in participating in a four-week aircraft assembly training program, and from that program 35 applicants will be hired into assembly trainee/aircraft assembly beginner positions. Additionally, in lieu of retroactive seniority salary, the new hires will be paid $1,500 each.”

According to the OFCCP, “Vought, a manufacturer of aircraft parts and auxiliary equipment contracts with the U.S. Department of Defense, has discontinued its use of the test and modified its screening procedures, and will undertake extensive self-monitoring measurements for two years to ensure that all hiring practices fully comply with federal law. Additionally, the company will ensure compliance with recordkeeping requirements.”

The OFCCP is an agency within the United States Department of Labor's Employment Standards Administration and enforces Executive Order 11246 and other laws that prohibit employment discrimination by federal contractors. The agency monitors contractors to ensure that they provide equal employment opportunities without regard to race, sex, color, religion, national origin, disability or veteran status.

Insomniacs can read the OFCCP’s full press release at http://www.dol.gov/opa/media/press/esa/esa20080418.htm.

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 Settles Race Discrimination Case for $250K When HR Fires Employee Based on Racial Bias of Employee’s Supervisor.

The EEOC announced this week that it had settled “a race discrimination lawsuit against BCI Coca-Cola Bottling Company of Los Angeles (BCI) for $250,000 on behalf of an African American former worker in Albuquerque, N.M. The resolution follows a favorable ruling by the U.S. Court of Appeals for the 10th Circuit, which established an important legal doctrine known as “subordinate bias” theory. . . . The EEOC had charged BCI with committing race discrimination against Stephen B. Peters, a black merchandiser, when a supervisor fired him in 2001 for not working his scheduled day off, even though Peters had called in sick and provided medical documentation. Additionally, the EEOC found that the supervisor made racist remarks about blacks generally.”

In initially dismissing the EEOC’s lawsuit on summary judgment, “the district court had said that the BCI official who actually terminated Peters was unaware of his race. However, the 10th Circuit [reversed and] found that a jury might reasonably conclude that Peters’ termination was based on his race because there was evidence that one of his supervisors, Cesar Grado, treated African Americans more harshly than other employees. The EEOC asserted that Grado made racial remarks about African Americans. In a published opinion, 450 F.3rd 476 (10th Cir. 2006), the appeals court observed, “In making the decision to terminate...the human resources official relied exclusively on information provided by Mr. Peters’ immediate supervisor, who not only knew Mr. Peters’ race but allegedly had a history of treating black employees unfavorably and making disparaging racial remarks in the workplace.” . . . Under this legal doctrine, called the “subordinate bias” theory, an employer may be liable for discrimination when it relies on comments from a biased subordinate supervisor when taking adverse employment action against an employee.”

Interestingly, “[a]fter the 10th Circuit ruling, BCI asked the U.S. Supreme Court to hear the case via a petition for a writ of certiorari. The high court accepted the case, and it was fully briefed and set for oral arguments. However, less than a week before the oral argument, BCI withdrew its appeal with no explanation and, subsequently, settled the case with the EEOC.”
“In addition to $250,000 for Peters, the EEOC’s two-year consent decree contains significant injunctive relief which applies to BCI and its managing agents at the Albuquerque facility. The injunctive measures require BCI to:

• Carry out policies and practices that promote a work environment free from race discrimination -- including a review of its existing policies on race discrimination and making any necessary changes so that those policies comply with Title VII of the Civil Rights Act;


• Distribute its policies to current employees and to new employees hired during the duration of the decree;


• Provide its employees with written policy statements regarding reporting and preventing racial bias;


• Post a Notice with a statement that Title VII prohibits race discrimination, and provide employees EEOC’s contact information; and


• Hold training sessions with managers, supervisors and employees of the Albuquerque facility on Title VII and race discrimination.

“The consent decree also prohibits BCI from retaliating against Peters or any witness in this case, and converting the official status of Peters’ firing to a voluntary resignation.”
Insomniacs may read the EEOC’s full press release at http://www.eeoc.gov/press/4-15-08.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.

Ohio Appeals Court: Employee Handbook is Not a Binding Non-compete Agreement.

Last month, the Lake County Court of Appeals affirmed the dismissal of a fraud lawsuit brought by an employer against an employee after the plaintiff-employer incurred substantial litigation expenses in an earlier case brought by the employee’s former employer. Freedom Steel, Inc. v. Rorabaugh, 2008-Ohio-1330 (3/21/08). The employee salesperson left his long-time employer and was hired by the plaintiff-employer after assuring it that he had never signed a non-competition agreement with his long-time employer. However, he did not inform the plaintiff-employer that he had signed an employee handbook acknowledgment because it was not a non-compete agreement and he did not think that handbook’s non-competition provision was enforceable. The court ultimately ruled that the employee was correct.

When the employee resigned his long-time employment, he did not reveal the identity of his new employer. When the long-time employer asked him to not call on any of their customers, he responded that he did not have a non-compete and would do what he had to do to get and keep a job. In response, the long-time promised that it would sue him if he competed against it.

Not surprisingly, the employee generated sales by means of his prior customer relationships. In “March of 2005, [the employee] was served with a lawsuit filed by [his long-time employer] in Summit County. In the complaint, [the long-time employer] alleged violations of Ohio's Trade Secrets Act, interference with contractual business relations, conversion, and breach of contract. Shortly after being served, [the employee] notified [the plaintiff-employer] of the pending lawsuit [and was] questioned . . . again regarding whether he had signed anything "that would drag us into a lawsuit." [The employee] again denied signing such a document insisting "I will prove it to you, and you're going to apologize to me ***." Based on these assurances, the plaintiff-employer did not fire the employee at that time.

“Eventually, however, [the plaintiff-employer] was served with a subpoena from [the long-time employer] seeking disclosure of . . . . the names of ‘customers, where they are located, their addresses, who they are, what they buy, what you're selling them price wise, everything about the customers, it's an open book in other words.’ [The plaintiff-employer] fought the subpoena by filing a motion for protective order; however, the trial court overruled the motion. The trial court rendered the ruling a final appealable order and appellant subsequently filed an appeal with the . . . Court of Appeals. Before the appeal was heard,” the employee settled the lawsuit with his long-time employer.

On April 4, 2006, after the dismissal, [the plaintiff-employer] filed suit against [the employee] in the Lake County Court of Common Pleas alleging fraud. [The plaintiff-employer] asserted [the employee] defrauded [the plaintiff-employer] by concealing relevant information regarding his past employment which caused it to expend over $18,000.00 in attorney's fees to defend against the subpoena issued by [the long-time employer] in the Summit County case. . . . In February of 2007, the matter proceeded to jury trial. After deliberating, the jury returned a verdict” in favor of the employee.

During the trial, the trial court had instructed the jury that as a matter of law the employee handbook signed by the employee was not a binding non-compete or trade secrets agreement. Therefore, the employee had truthfully denied ever signing a non-compete agreement. On appeal, the Court of Appeals agreed that the employee handbook could NOT constitute a binding contract because the Acknowledgment page signed by the employee contained the following disclaimer:

"NOTHING CONTAINED IN THIS HANDBOOK IS INTENDED AS A CONTRACT AND THE POLICIES, RULES AND BENEFITS DESCRIBED IN IT ARE SUBJECT TO CHANGE AT THE SOLE DISCRETION OF FAMOUS ENTERPRISES WITHOUT NOTICE AT ANY TIME."

“Although the document indicates, by signing the receipt, [the employee] agreed to be bound by the statements contained within it, the document does not mention and thus does not bind [the employee] (or any acknowledging employee) to a non-compete clause. Moreover, although the document indicates that, by signing the document, [the employee] would not disseminate or use confidential information "CRITICAL TO THE SUCCESS OF FAMOUS ENTERPRISES" (emphasis sic), it does not use the term nor set forth any general trade secrets any current or past employee must not publish. The document merely states that confidential information, e.g., customer lists, pricing policies or other sensitive information, shall not be disseminated or used "OUTSIDE OF COMPANY PREMISES." As this statement appears in an employee handbook and, moreover, is vague as to what it specifically relates, it is reasonable to conclude that it simply reflects a policy requiring current and past employees not to disclose the information it stipulates as confidential.”

Not discussed by the Court is the fact that the plaintiff-employer likely would have been subpoenaed regardless of the arguable existence of a non-compete agreement because the trade secrets claim does not require the existence of an underlying breach of contract. However, the court of appeals incorrectly noted in a footnote that the use of the customer information from memory (as opposed to taking a list) was not actionable under Ohio's Trade Secret Act. (This issue was previously the subject of an earlier Ohio Supreme Court opinion on February 6, 2008 in Al Minor & Assoc., Inc. v. Martin, 2008-Ohio-292).

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/11/2008/2008-ohio-1330.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.

Sixth Circuit: Title VII Protects Family and Friends of Employees who File EEOC Charge.

[Editors' Note: This decision was reversed by the Sixth Circuit en banc on June 5, 2009.]

On March 31, 2008, the a divided Sixth Circuit recognized associational claims for retaliation after an employer fired the fiancé of an employee about three weeks after it received notice of her EEOC Charge. Thompson v. North Am. Stainless LP, No. 07-5040 (6th Cir. 3/31/08).

“According to the complaint, Regalado filed a charge with the EEOC in September 2002, alleging that her supervisors discriminated against her based on her gender. On February 13, 2003, the EEOC notified [the employer] of Regalado’s charge. Slightly more than three weeks later, on March 7, 2003, the [employer] terminated [the] employment of” Thompson, Regaldo’s fiancé. “Thompson alleges that he was terminated in retaliation for his then-fiancée’s EEOC charge, while [the employer] contends that performance-based reasons supported the plaintiff’s termination.” The employer successfully argued to the trial court on summary judgment that it was not a violation of Title VII to terminate Thompson on account of Regalado’s EEOC Charge.

The Sixth Circuit found the public policy of Title VII supported recognizing a cause of action under these circumstances. ““The anti-retaliation provision seeks to secure [a non-discriminatory workplace] by preventing an employer from interfering (through retaliation) with an employee's efforts to secure or advance enforcement of the Act's basic guarantees.” Clearly, Regalado would have been deterred from filing her EEOC Charge if she had known that it could result in the termination of her fiancé.

The dissent argued that the Court should leave it to Congress to amend Title VII to include within the scope of the anti-retaliation provisions individuals other than the employee who filed the EEOC Charge.

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/08a0129p-06.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.

Cuyahoga Court Affirms Denial of Unemployment Compensation to Employee Who Was Fired for Excessive Absenteeism.

Last month, the Cuyahoga County Court of Appeals affirmed the denial of unemployment compensation to a phlebotomist who was fired in December 2004 after missing 10 days of work in 2003 and 10 days of work in 2004. Although the employee claimed that the employer was prohibited from firing him by federal and state statutes, he never returned (or produced) his FMLA certification forms to show that his unexcused absences were caused by his alleged migraine headaches and never produced a copy of the subpoena to show that he had been subpoenaed to testify in juvenile court (which was the justification he gave for his last unexcused absence). Therefore, he could not show that his absences were protected by the FMLA or state law. Because the employer followed its progressive disciplinary process in addressing the employee’s excessive absenteeism, he had been on warning that he could lose his job if his attendance did not improve or he failed to provide a legitimate reason (such as a doctor’s excuse or subpoena). Bemak v. Ohio Job & Family Servs., 2008-Ohio-906 (3/6/08).

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/8/2008/2008-ohio-906.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.