Congress Amends FAA to Restrict Mandatory Arbitration and Class Action Waivers of Sexual Assault and Harassment Claims

President Biden is expected to sign H.R.4445, “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” to amend the Federal Arbitration Act in Chapter 9 of the U.S. Code and permit sexual harassment victims to reject mandatory pre-dispute arbitration and class action waivers of sexual assault, sexual contact and harassment claims.   It will apply to any disputes or claims which arise or accrue after the Act’s enactment.  Courts and not arbitrators will determine the applicability of the statute, regardless of the terms of any agreement to the contrary.  “An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law.”

The text of the statute applies only to pre-dispute waivers, such as contained in employment and separation agreements.  Only named class representatives can make the decision, not unnamed members of the class.  The Act applies to sexual harassment that arises under any federal, state or tribal law. The criminal statute cited by the statute defines sexual contact to include:

the intentional touching, either directly or through the clothing, of the  . . . , groin, breast, inner thigh, or buttocks of any person with an intent to abuse, humiliate, harass, degrade, or arouse or gratify the sexual desire of any person;

(I have edited this quotation to avoid getting caught in spam software, which is why I am also not quoting the criminal statute for sexual assault at 18 U.S.C. §2246).

The “meat” of the Act is as follows:

§ 402. No validity or enforceability.

“(a) In General.—Notwithstanding any other provision of this title, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.

“(b) Determination Of Applicability.—An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law. The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to which this chapter applies shall be determined by a court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator.”.

As mentioned, it also amends the Federal Arbitration Act by adding the new Chapter 4 to the Table and as follows:

§  2 A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract OR AS OTHERWISE PROVIDED IN CHAPTER 4.

§208  APPLICATION.  Chapter 1 applies to actions and proceedings brought under this chapter to the extent that chapter is not in conflict with this chapter or the Convention as ratified by the United States. THIS CHAPTER APPLIES TO THE EXTENT THAT THIS CHAPTER IS NOT IN CONFLICT WITH CHAPTER 4.

§307. APPLICATION. Chapter 1 applies to actions and proceedings brought under this chapter to the extent chapter 1 is not in conflict with this chapter or the Inter-American Convention as ratified by the United States. THIS CHAPTER APPLIES TO THE EXTENT THAT THIS CHAPTER IS NOT IN CONFLICT WITH CHAPTER 4.

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: Reassigning Shifts to Achieve Racial Diversity Can Constitute Actionable Race Discrimination.

Last July, the Sixth Circuit reversed an employer’s summary judgment, finding that considering race when making shift assignments in order to ensure a diverse management team could constitute actionable race discrimination and was not a de minimis matter.  Threat v. City of Cleveland, 6 F.4^th 672 (6^th Cir. 2021).  “When an employee’s race is a basis for a shift change that denies the privileges of that employee’s seniority, the employer has discriminated on the basis of race in the terms and privileges of employment.”  It rejected the argument that a shift assignment was never a material adverse employment action. “The point of our cases is to convey that an employer’s alteration of the ‘terms’ or ‘privileges’ of an employee’s work is actionable only when it is ‘adverse’ and ‘material’ to the work.” Moreover, “to give the de minimis rule too broad a reach would contradict congressional intent by denying proper effect to a statute.” The Court also dismissed the argument that Title VII only reaches employment decisions which cause economic harm when the statute reaches not only discrimination in compensation but also discrimination in other terms, conditions and privileges of employment.

According to the Court’s opinion, EMS captains were permitted by the bargaining agreement to choose their shifts according to their respective seniority, but the City could change up to four of them for any reason even if it conflicted with the captain’s first choice.  After the shift bid process, it turned out that the day shifts were staffed with all black captains.  In order to ensure racial diversity on the shift, the EMS Commissioner moved one to the night shift and replaced him with a white captain (even though it interfered with that captain’s child visitation schedule).  Discrimination and unfair labor practice charges, public accusations and litigation ensued.

There is little room for debate that the city discriminated against the plaintiffs—that it treated them differently.  . . . .

There also is little room for debate that the city treated the black captains differently “because of” their “race.” [The EMS Commissioner] admitted that she switched out a black captain for a white one to adjust the shift’s racial makeup. That counts as direct evidence of discrimination based on race. . . .

The main debate in this case turns on the meaning of “compensation, terms, conditions, or privileges of employment.” 42 U.S.C. § 2000e-2(a)(1). Do the city’s shift schedules amount to “terms” of employment? Does getting priority because of seniority in choosing shifts amount to a “privilege” of employment?

At one level, that seems easy. If the words of Title VII are our compass, it is straightforward to say that a shift schedule—whether, for example, the employee works the night shift or the day shift—counts as a term of employment. It’s not even clear that we need dictionaries to confirm what fluent speakers of English know. A shift schedule is a term of employment . . .

 . . .

Pulling the meaning of these key terms together, the city decided when Anderson had to work based on his race—and in the process discriminated against him based on race with respect to his terms and privileges of employment. The race-based shift change controlled when and with whom he worked, prohibited him from exercising his seniority rights, and diminished his supervisory responsibilities when the city imposed the night shift on him. All told, the action amounted to discrimination with respect to his terms and privileges of employment under § 703(a)(1).

The City argued that the shift assignments were not materially adverse employment actions that could be litigated under Title VII.  However, the Court found that the City underestimated the importance of a shift assignment.

We do not see the same gap between the words of Title VII and our liquidation of those words. The point of our cases is to convey that an employer’s alteration of the “terms” or “privileges” of an employee’s work is actionable only when it is “adverse” and “material” to the work. To “discriminate” reasonably sweeps in some form of an adversity and a materiality threshold. It prevents “the undefined word ‘discrimination’” from “command[ing] judges to supervise the minutiae of personnel management.” . . . It ensures that a discrimination claim involves a meaningful difference in the terms of employment and one that injures the affected employee. And it ensures that any claim under Title VII involves an Article III injury—and not, for example, differential treatment that helps the employee or perhaps even was requested by the employee. . . .. Surely those are reasonable assumptions.

At the same time, our approach honors a de minimis exception that forms the backdrop of all laws. The “doctrine de minimis non curat lex (the law does not take account of trifles)” has “roots [that] stretch to ancient soil.” . . . So ancient, the “old law maxim” was already venerable at the founding. Ware v. Hylton, 3 U.S. (3 Dall.) 199, 268 (1796). From the beginning, the de minimis canon has been “part of the established background of legal principles against which all enactments are adopted, and which all enactments (absent contrary indication) are deemed to accept.” . . . .

When Congress enacted Title VII, the National Legislature provided no indication that it sought to disregard these considerations or to use the word “discriminate” to cover any difference in personnel matters. Yes, “hundreds if not thousands of decisions say that an ‘adverse employment action’ is essential to the plaintiff’s prima facie case” even though “that term does not appear in any employment-discrimination statute.”. . . . And, yes, the same could be said about a “materiality” requirement. But we take these innovations to be shorthand for the operative words in the statute and otherwise to incorporate a de minimis exception to Title VII.

But de minimis means de minimis, and shorthand characterizations of laws should not stray. Else, like “the children’s game of telephone,” we risk “converting the ultimate message into something quite different from the original message—indeed sometimes into the opposite message.” . . . “[T]o give the de minimis rule too broad a reach would contradict congressional intent by denying proper effect to a statute.” . . . That concern, however, must be balanced against the reality that “we cannot just toss the de minimis rule aside.” Id.

In this instance, employer-required shift changes from a preferred day to another day or from day shifts to night shifts exceed any de minimis exception, any fair construction of the anchoring words of Title VII, and for that matter any Article III injury requirement. Whether we refer to claims of discrimination based on race in “terms” or “privileges” of employment or to claims of discrimination based on race in “materially adverse” terms of employment, the conclusion is the same: They state a cognizable claim under Title VII when they refer to shift changes of this sort and under these circumstances.

While acknowledging that some prior Sixth Circuit cases have dismissed challenges to shift assignments as not implicating a material adverse employment action, the Court concluded:

Not all shift changes are the same. And some shift changes and reassignments may constitute, say, race-based discrimination in “terms,” “privileges,” and other aspects of employment.

The Court also dismissed the argument that Title VII only reaches employment decisions that cause economic harm when the statute reaches not only discrimination in compensation but also discrimination in other terms, conditions and privileges of employment.

Cabining the provision to pocketbook harms would render meaningless many of the words in the statutory phrase “compensation, terms, conditions, or privileges of employment.” As the words after “compensation” suggest, Title VII indeed extends beyond “economic” discrimination.

The Court also remanded the claims of the other captains who were not reassigned so that the trial court could consider whether the reassignments controlled with whom they could work.   The Court affirmed dismissal of the retaliation claim based on the unfair labor practice charge filed against their union.

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.

Vague Requests and Failure to Comply with Accommodation Procedures Doomed ADA Failure-To-Accommodate Claim

Last month, the Sixth Circuit affirmed an employer’s summary judgment on an ADA failure-to-accommodate claim when the employee failed to obtain medical information clarifying his sought accommodation as requested by the defendant employer. Stover v. Amazon.com LLC, No. 21-5421 (6th Cir. 1/10/22).   His initial inquiries were deemed too vague to constitute a request for a reasonable accommodation and his failure to support his own clarification with any medical documentation from his physician constituted an abandonment of the reasonable accommodation process.   Therefore, the employer was not required to grant his requests.  

According to the Court’s opinion, the plaintiff call center employee requested a reduced work schedule to accommodate his gastrointestinal impairment and need for unscheduled restroom breaks.   After he failed to submit any medical documentation to support his first request, his request was administratively closed.   He later submitted a second request, supported with note from his physician indicating that he needed to have a restroom “readily available.”  When asked for clarification, the employee indicated that his work hours should be reduced from 40 to 32 and approval to use the restroom whenever he has an episode, but never provided any medical documentation to support this clarification.  Accordingly, his request was closed without approval.  Dissatisfied with the employer’s process, the plaintiff never sought another accommodation.

Meanwhile, his job performance was found to be deficient, which he usually blamed on his hardware, etc.   He was observed, among other things, being rude to customers and avoiding new calls near the end of his shifts.   Although his equipment was replaced, he continued to have performance issues. He was then warned about his excessive breaks, but he refused to pursue the reasonable accommodation process again even when encouraged to do so.   When his performance did not improve, he was terminated.

The Court found that the plaintiff could not show that he had requested a reasonable accommodation when he had abandoned the reasonable accommodation process.   His initial requests and physician notes – for “more breaks” and a “readily accessible” restroom – lacked

specificity, so much so that they were tantamount to failing to make any accommodation request whatsoever. An employee, after all, must “reasonably inform” an employer about the nature of the requested accommodation, thereby putting the employer on notice of whether and what type of accommodation might be appropriate.

When the plaintiff later requested a reduced work schedule and ability to use the restroom whenever he had an episode, he failed to provide the supporting medical documentation reasonably requested by the employer.

[He] did not follow up, however, with supporting medical documentation to give Amazon fair notice of his needs. Instead, he repeatedly disclaimed any interest in seeking an accommodation. [His] failures in this regard rendered his bathroom-accommodations claims subject to summary judgment.

In litigation, he claimed that he had made another request  -- for leave to seek medical treatment every 8 weeks.  However, there was no evidence that he had ever requested this accommodation.  Moreover, there was no evidence of any medical information submitted by any physician to support this request.

To avoid the weakness of his evidence, the plaintiff argued that he was not required to participate in the employer’s process when he deemed them to be futile:

employees poured cold water on his initial accommodation inquiries, justifying his decision to deem the process futile. But Stover cannot dictate the terms of his accommodation or refuse reasonable requests by those designated to evaluate his accommodation inquiries.

The Court also rejected his retaliation claim because he could not show that the reason for his termination – his manipulation of the computer system to avoid taking customer calls near the end of his shift.”  This is a basic reason to terminate employment.   The employer was able to articulate its belief in his misconduct.  “Under the settled “honest belief rule,” so long as Amazon made a “reasonably informed and considered decision” based on “particularized facts,” no reasonable juror could infer that its reason for firing Stover was pretextual.”  He essentially admitted the infractions, which were similar enough to his other misconduct – being rude to customers – to mirror his pattern of rude behavior.  His “bathroom needs, in other words, were the least of Amazon’s problems with him.”  Moreover, he had given a variety of reasons for taking excessive breaks – a malfunctioning computer and food poisoning, etc. – that undermined his claim that his disability motivated the termination decision.

True, [the plaintiff] did, on one occasion, tell [his manager] that his Crohn’s disease was the cause of his excessive breaks. But that was one cause among many, including food poisoning and a mischievous computer. There is no evidence to suggest that [his] Crohn’s disease motivated [her] to initiate [his] separation any more than any other reason [he] provided for his misconduct. More to the point, far from showcasing a discriminatory intent, [his manager], in her discussion with [him] about his excessive breaks, encouraged [him] to seek an ADA accommodation, hardly the makings of a discrimination claim. [The plaintiff], for the most part, viewed his dispute with [his manager] as personal in nature, not one motivated by some sort of hidden discriminatory intent. In short, no reasonable jury could conclude that Amazon’s proffered reasons for cutting ties with [him] were pretextual.

 

 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.

Title VII Protects HR Employees, Too

Last summer, the Sixth Circuit reversed summary judgments given to two employers on claims brought by human resources employees.   In Briggs v. UC, 11 F.4^th 498 (6^th Cir. 2021), the Court ruled that a jury should evaluate a compensation analyst’s claim of wage discrimination within a college human resources department based on race and gender.  In Jackson v. Genesee County Road Commission, 999 F.3d 333 (6^th Cir. 2021), the Court ruled in favor of a fired HR Director who had advocated on behalf of employees alleging unlawful discrimination and asserted that her termination had been in retaliation for her opposing unlawful discrimination and engaging in those protected activities.  More interestingly, the Court found that Title VII – governing employment discrimination --  protected her role as the EEO Officer in ensuring EEO compliance by the employer’s vendors: as EEO Officer, her “actions could reasonably be viewed as steps to ensure there was no discrimination in hiring both within GCRC and among its vendors, and, thus, were protected activity under Title VII.”

According to the Court's analysis of the plaintiff's allegations in Briggs, the HR department hired a new compensation analyst in 2015 who possessed a college degree but no compensation experience.  She was paid significantly more than the incumbent-plaintiff, who had significant compensation experience but no college degree.   Part of the reason for the disparity was a policy requiring a 5% raise for any promotion and part was to entice her to leave her current position.  Although the manager advocated for an equity adjustment for the plaintiff (who was paid both less than the new peer and also below market) in 2015, the new VP allegedly refused because of his “inconsistent” 2016 performance evaluation (which apparently did not explain objectively the basis for the lower evaluation).  It was implied that the plaintiff had performed only his basic expectations before understanding that advancement came with exceeding expectations.  Ultimately, the manager claimed that he suffered retaliation for advocating on behalf of the plaintiff’s equity adjustment.  The new employee exceeded expectations, was promoted again and ultimately left.  When the plaintiff applied for her former position, the VP apparently revised the job description in an alleged attempt to render him unqualified.  There was also an implication that the VP contended that the plaintiff was not even qualified for his own position.  The VP gave the plaintiff the lowest possible performance bonus.

The Court rejected the employer’s argument that the compensation difference was based on a factor other than sex or race:

no authority supports the concept that an employee’s prior salary or demand for a specific salary is sufficient in isolation to justify a wage differential. Such a rule would simply perpetuate existing sex-based pay disparities and undercut the purpose of the Act—to require that those doing the same work receive the same pay. . . .

Though a defendant need not offer contemporaneously produced evidence of its rationale, there must be evidence in the record proving that the employer’s proffered justification was the reason for the wage differential’s existence. . .

                . .  .

The record does not show beyond dispute that Wittwer’s bachelor’s degree and higher performance ratings than Briggs, or any other specified factors, were the reason for the salary disparity between her and Briggs.   [The employer] has therefore failed to meet its burden of proving that these distinctions were “the reason for the pay disparity.”

The Court also rejected the employer’s argument regarding the new employee’s higher education and better attitude towards self-improvement and working outside the job description because of the lack of documentary evidence regarding the plaintiff’s purported performance issues until after he requested an equity adjustment and because of the lack of evidence that these issues actually motivated the pay disparity.  The Court explained that an employer is required to submit evidence “beyond dispute” from which “a factfinder could conclude that the proffered reasons “in fact” explain the wage disparity—not just that the reasons could explain it.” The Court also found sufficient evidence of pretext in that the employer’s explanation was not credible:

The record contains no contemporaneous evidence that the cited distinctions between Wittwer and Briggs actually motivated their salary disparity, and it contains disputes of fact among [the employer’s] own witnesses as to whether performance is, in practice, a consideration for employees’ base pay. The post-hoc nature of the justifications contained in Stidham’s affidavit further support an inference of pretext, particularly given that several of the statements contradict statements made by Stidham in Briggs’s performance reviews and cannot be squared with the undisputed fact that Stidham recognized Briggs’s pay was below market and requested an equity adjustment for him. “An employer’s changing rationale for making an adverse employment decision can be evidence of pretext.”

The Court also rejected the employer’s honest belief defense on the retaliation claim because the VP could not show a factual basis for her mistaken belief about the incumbent’s qualifications and his experience before being hired by the college and the fact that she pulled the job posting soon after he made his discrimination complaint.   

a reasonable jury could conclude that [the VP’s] alteration of the posting was retaliatory rather than innocent. Contemporaneous e-mails and other evidence suggest that [her] decision-making about Briggs’s complaint and the job posting were linked. Briggs made his complaint on November 8. . . .

Then, on November 13, [she] e-mailed [the manager] directing him to pull the senior compensation analyst job posting. Although in retaliation cases “temporal proximity cannot be the sole basis for finding pretext,” it can be “a strong indicator of pretext when accompanied by some other, independent evidence.”

According to the Court's evaluation of the plaintiff's allegations in Jackson, the employer had fired its HR Director without any explanation or investigation following a number of complaints about her communication skills, including some from individuals who had been investigated and/or counselled by her.   The employer had previously supported all of the actions she had taken.  One of the complaints was from a vendor which incorrectly claimed that she had frozen its payments based on a discrimination complaint it had received from one of its own employees.   The employer’s outside counsel had also complained about her insistence that all communications go through her when he was attempting to meet with witnesses and prepare for hearings, etc.  The employer did not investigate any of the complaints or give her any explanation for why she was being terminated.  Without being able to identify that it had relied only on accurate complaints or on complaints that did not implicate her investigating and remedying unlawful discrimination, the Court found that a jury should determine whether she had been terminated in retaliation for engaging in protected activities.

The opposition clause of Title VII makes it “unlawful . . . for an employer to discriminate against any of his employees . . . because he has opposed any practice made . . . unlawful . . . by this [title.]” 42 U.S.C. § 2000e-3(a). The Supreme Court has held that the term “oppose” should be interpreted based on its ordinary meaning: “[t]o resist or antagonize . . . ; to contend against; to confront; resist; withstand.” . . .

This court and the Supreme Court have imposed limited restrictions on what activity constitutes opposition activity. While the plaintiff’s allegations of protected activity do not need to “be lodged with absolute formality, clarity, or precision,” the plaintiff must allege more than a “vague charge of discrimination.” . . . The plaintiff also must express her opposition in a reasonable manner. Johnson, 215 F.3d at 580. For example, “[a]n employee is not protected when he violates legitimate rules and orders of his employer, disrupts the employment environment, or interferes with the attainment of his employer’s goals.”. . .

. . .the district court held that the opposition clause is limited to conduct that goes beyond the plaintiff’s regular job duties. However, the district court’s assertion is contrary to both the text of the opposition clause and this court’s interpretation of Title VII for two reasons. First, the text of § 2000e-3(a) states that it “shall be an unlawful employment practice for an employer to discriminate against any of his employees,” which suggests that all employees are subject to the same standard. 42 U.S.C. § 2000e-3(a) (emphasis added). The statute also does not state that the employee’s conduct must fall outside of her regular job duties. . . .

                . . . this court has previously allowed plaintiffs to bring a retaliation claim for conduct related to their job responsibilities. . . . In Johnson, the vice president of human resources brought a Title VII claim . . . for allegedly firing him in part because of his advocacy on behalf of minorities related to his management of the university’s affirmative action program. . . . The Johnson court found that “the fact that Plaintiff may have had a contractual duty to voice [his concerns about the affirmative action program] is of no consequence to his claim.” . . . Excluding the vice president from the protection of Title VII would “run[] counter to the broad approach used when considering a claim for retaliation under this clause, as well the spirit and purpose behind Title VII as a broad remedial measure.” . . . The court worried that narrowing the scope of Title VII could create perverse incentives for employers and leave the employees specifically hired to do the often difficult work of combating discrimination with fewer protections than general employees. . . . In sum, both the text of Title VII and our precedent reject the district court’s additional restriction that the opposition clause does not extend to an employee’s regular job duties.

That being said, the Court did not find that all of the plaintiff’s investigations amounted to protected activity because she had not concluded that some of the alleged misconduct was the result of unlawful race discrimination.   Where she had concluded that unlawful race discrimination had occurred, her conduct in that investigation, informing management and negotiating a severance agreement for the offending manager constituted protected conduct.

Interestingly, the Court also found her role as EEO officer in working with vendors (not employees) was similarly protected conduct. “Jackson’s actions could reasonably be viewed as steps to ensure there was no discrimination in hiring both within GCRC and among its vendors, and, thus, were protected activity under Title VII.”

The Court also found sufficient evidence of causation from the temporal proximity of her protected activities (i.e., 2.5 months) and her termination.

The temporal proximity between Jackson’s protected activities and her termination is strong circumstantial evidence. In addition, many of the same people who complained to Daly about Jackson’s communication style were involved either in the negotiations with Bennett, such as Derderian, or communication about EEOPs, such as Plamondon, Peivandi, and two outside vendors. A reasonable juror could infer that these individuals described Jackson’s communication style as offensive and abrasive because they took issue with her handling of the investigation into Bennett’s or Jackson’s efforts to ensure EEOP compliance. Thus, Jackson has met the relatively light burden of demonstrating causation at the prima facie stage.

While there was some evidence supporting the employer’s explanation for her termination, she was also able to produce sufficient evidence of pretext to go to a jury.  Some employees, vendors and Board members contended that they had an excellent relationship with her.  “This evidence contradicts GCRC’s claim that Jackson’s communication style was inflexible and abrasive and could lead a juror to conclude Jackson’s communication style was not the true reason she was fired.”

Furthermore, several of the GCRC employees who complained about Jackson’s communication style also complained about Jackson’s protected activities, so a reasonable juror could conclude that their complaints about Jackson’s style were motivated to some degree by their opposition to her protected activities. . . . Although it is true that some of the employees who complained about Jackson’s communication style were not directly involved in her protected activities, there is enough overlap between the employees who complained to Daly and the individuals objecting to Jackson’s protected activities to call into question the strength of GCRC’s nondiscriminatory proffered reason.

  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.

Although Plaintiff Was Not Plainly Superior Candidate, He Could Still Prove Pretext With Disputed Comments

On Monday, the Sixth Circuit Court of Appeals reversed an employer’s summary judgment in an age discrimination failure-to-hire case, but affirmed dismissal of the plaintiff’s retaliation claim.   Aday v. Westfield Ins. Co., No. 21-3115 (6^th Cir. 1/24/22).   The Court discussed alternative ways for a plaintiff to prove that an employer’s explanation is pretextual in a failure to hire case and permitted the case the be resolved by a jury based on only two ageist comments from debatable decisionmakers.  The Court agreed that the plaintiff had not proven that he was the plainly superior candidate, in part because of the comparative leadership experience and because that he wanted to remotely manage his team from Seattle, far away from any company office.  However, when considering what would typically be “stray remarks” from arguably non-decisionmakers that may have indicated an age bias and a discriminatory atmosphere together with evidence that he had comparable qualifications to the successful candidates, the Court found sufficient evidence of pretext to let a jury decide the outcome.  The Court also rejected the argument that the employer's counterclaim was objectively baseless. 

Background

According to the Court’s decision, the 63-year old plaintiff has worked successfully for 40 years and received both promotions and transfers into leadership and other significant positions.  When his domestic partner accepted a job in Seattle, he sought authorization to work remotely from there or, in the alternative, to be transferred into a different management position for the Central U.S. which he would manage remotely from Seattle.  His own manager supported his efforts.  While he was denied authorization to work remotely, he was permitted to work from Ohio as long as he wished.   Although he interviewed well for the new management position, a 50-year old employee from Toledo with 22 years of comparable experience who had been a direct report of the hiring manager was chosen.   The employer later explained that there were questions about his passion for the position and his intent to manage his team from Seattle.

The plaintiff claimed that the hiring manager’s superior once joked to him over a lunch that he would be the next person to retire.  He also alleged that a co-worker claimed to have spoken with the interviewing/draft management team about the hiring decision and reported that they felt that it was time for the plaintiff to retire. He eventually retired, moved to Seattle and brought suit for age discrimination.  The employer filed a counterclaim for misappropriation of trade secrets and the plaintiff responded by amending his complaint to add a retaliation claim.  The trial court granted summary judgment dismissing the claims and the plaintiff appealed.

There was no dispute about whether the plaintiff had alleged a prima facie case of age discrimination and the focus of the Court’s opinion was on whether or not he had created a factual dispute (for a jury to resolve) about whether the employer’s explanation was pretextual.  The standard way to show pretext is “that the proffered reason (1) has no basis in fact, (2) did not actually motivate the defendant’s challenged conduct, or (3) was insufficient to warrant the challenged conduct.”  However, in a failure-to-hire context, a plaintiff

may prove pretext through the relative-qualifications test. . . . that either (1) he was the “plainly superior candidate, such that no reasonable employer would have chosen the latter applicant over the former,” or (2) he “was as qualified as if not better qualified” than Somogyi and Zito and the record contains “other probative evidence of discrimination.”

Not a Plainly Superior Candidate

The Court found that the plaintiff failed to produce objective evidence that he was plainly superior candidate. Courts will not act as a super-personnel department to second guess business decisions.   “If two reasonable decisionmakers could consider the candidates’ qualifications and arrive at opposite conclusions as to who is more qualified, then clearly one candidate’s qualifications are not significantly better than the others.” In other words, “[s]imply being “more qualified” is not sufficient to prove Plaintiff is the plainly superior candidate.”  Similarly, giving a good job interview does not make one plainly superior.

While the plaintiff had more industry and technical expertise than the other candidates, simply being more qualified than them on one aspect of the job was insufficient by itself to satisfy his burden of proof.  “[E]ven if Plaintiff were considered the candidate with marginally better technical experience, no reasonable juror could conclude he was the plainly superior candidate under the Sixth Circuit’s exacting standard, especially considering technical experience is only one facet of the job.”

The Court was less impressed with his prior “leadership experience.”  The hiring manager recalled his six years leading a team and he had seemed stressed and overworked.  Indeed, he had left that position to become an individual contributor as an claims specialist and this contributed to the decision that he lacked sufficient desire for a leadership role.  One of the other candidates had 11 years of “incredible” leadership experience and the other had comparable leadership experience.  “In terms of leadership experience, no reasonable jury could find that Plaintiff was the plainly superior candidate.”

The Court also disagreed that plaintiff’s desired work location in Seatle made him more qualified to supervise a team in Arizona, Colorado, Minnesota and Illinois.  However, “anything requiring in-person attendance would incur a greater expense” because the other candidates were working more closely to the rest of the company.  This concern with his remote work location had been expressed to the plaintiff repeatedly throughout the process.

In his best-case scenario, a reasonable juror could conclude that Plaintiff had marginally better technical training, had better leadership experience than Zito , and was in a marginally better geographic location. This is not enough.

Plaintiff has not produced enough evidence from which any reasonable juror could conclude that he had better leadership experience than Somogyi.

Comparative Qualifications with Some Other Evidence

Plaintiff could not show that he was plainly superior because of his comparable leadership experience and questions about his ability to effectively manage remotely from Seattle.  To prevail on the alternative argument, the plaintiff need not show that he was the indisputably best candidate; he need only show that his qualifications made him arguably “as qualified.”  He satisfied this burden with the employer’s admission that he had been ranked as one of the top four candidates.  

The second prong requires other probative evidence of discrimination.  For this, the plaintiff proffered two statements made to him: a joke about him being the next to retire and a disputed allegation by a co-worker that the hiring managers had expressed their belief that he should retire.  The Court held this was sufficient evidence:

By themselves, neither  . . . .  comment would likely be sufficient to create a genuine dispute. However, considering the comments together, we believe Plaintiff has produced probative evidence of discrimination.

The parties disputed whether the joke was made by anyone involved in the decision to hire the plaintiff.  However, the jokester was the hiring manager’s manager and had the authority to override her decision (although he had rarely done so). “Nevertheless, we need not determine whether Bowers was a decisionmaker because this Court has ‘held that discriminatory remarks, even by a nondecisionmaker, can serve as probative evidence of pretext.’” Further, it was irrelevant at this stage that everyone admitted the comment was a joke. “This Court has held, however, that statements may be probative evidence of discrimination even if they are made as a joke.”  This joke could contribute to a discriminatory atmosphere where discriminatory decisions are made.

We noted that evidence of a discriminatory atmosphere “may serve as circumstantial evidence of individualized discrimination directed at the plaintiff.” . . . And while a workplace atmosphere replete with discrimination is not conclusive proof that an individual plaintiff is the victim of age discrimination, a discriminatory atmosphere “‘tend[s] to add “color” to the employer’s decisionmaking processes and to the influences behind the actions taken with respect to the individual plaintiff.’” . . .  Here, Bowers was a very senior leader at Westfield and his willingness to comment on and “joke” about a junior employee’s retirement status in the midst of that employee’s search for a new position could reasonably be interpreted as contributing to a discriminatory atmosphere at Westfiel

While the co-worker admitted telling the plaintiff that he should retire, he denied ever speaking with any of the hiring managers about the decision.   Nonetheless, the Court found that a jury could decide to credit the plaintiff’s memory – that his co-worker had in fact claimed to have spoken with the hiring managers – over the co-worker’s denial that he had ever done so. 

General Pretext

The Court rejected the plaintiff’s other evidence of pretext.  Although he was able to cast sufficient doubt on one of the employer’s explanations, he did not have evidence showing that the other explanations lacked a basis in fact, etc.

With respect to plaintiff’s perceived lack of passion for the position, he pointed out that one of the successful candidates had applied for any and every position after her current position had been eliminated.    The other candidate had previously left the industry altogether at one point to pursue a different field.   The plaintiff had also scored highly on an assessment.  “Considering all this, a reasonable juror could conclude that Lilly’s explanation that Plaintiff lacked passion for the Unit Leader position had no basis in fact and was pretextual.”

Plaintiff has cast doubt on some—but not all—of the reasons Defendants articulated for not hiring him. While [the hiring manager’s] explanation that he lacked passion for the Unit Leader position arguably has no basis in fact, Plaintiff has failed to cast doubt on [her] subjective beliefs that one candidate had more relevant experience and the other candidate presented a more creative plan. Since these are both nondiscriminatory bases for choosing to hire [them] over Plaintiff, Plaintiff has not created a genuine dispute under the general pretext test.

No Retaliation for Counterclaim

The plaintiff’s retaliation claim was based on the employer’s filing of a counterclaim for misappropriation of trade secrets.  The Court rejected this argument as well. 

While ‘”an employer is not barred from filing a well-grounded, objectively based action against an employee who has engaged in a protected activity,”. in some situations, the filing of counterclaims may constitute adverse employment action.  . . . The central question is whether the counterclaims are filed “not in good faith and instead motivated by retaliation.” . . . Stated differently, the Court must find (1) “the employer acted with retaliatory motive” and (2) that the employer’s counterclaims “lack a reasonable basis in fact or law.”

The employer’s claim was based on the plaintiff emailing trade secrets to the personal email accounts of himself and his domestic partner.   The trial court concluded that the plaintiff had not used improper means to access the information in violation of any policy and there was no evidence that anyone other than the plaintiff had accessed any trade secrets.   The plaintiff argued that the claims were “objectively baseless” because of the lack of precedent condemning emailing confidential information to an employee’s personal email account. “A claim is not objectively baseless simply because it fails.”

Defendants’ argument is not nearly as outlandish as Plaintiff tries to make it seem. Courts around the country have considered whether emails sent to oneself can constitute misappropriation. For example, in Aon PLC v. Infinite Equity, Inc., No. 19 C 7504, 2021 WL 4192072, at *14 (N.D. Ill. Sept. 15, 2021), the court found there was a reasonable likelihood of success on a misappropriation claim when an employee “forwarded emails from his Aon email address to his personal email address.” See generally
Mintz v. Mark Bartelstein & Assocs. Inc., No. 2:12-CV-02554-SVW-SS, 2013 WL 12182602, at *4 (C.D. Cal. June 14, 2013); CPI Card Grp., Inc. v. Dwyer, 294 F. Supp. 3d 791, 809 (D. Minn. 2018). Having failed to prove Defendants’ counterclaims lack a reasonable basis in fact or law, for this reason alone, Plaintiff’s claim of retaliation must fail.

The Court also rejected the argument that the employer’s counterclaim was retaliatory because it knew that other employees emailed information to themselves but only sued him for it after he brought an age discrimination claim.

There are many reasons an employer would not litigate every infraction employees commit. However, after an employee has hauled an employer into court, it is entirely reasonable for the employer to file its claims for minor infractions. Additionally, Defendants only filed the counterclaims after Plaintiff brought the conduct to their attention. During the parties’ initial disclosures, Plaintiff mentioned he had emailed documents to his personal email account. Defendants sought leave to file the counterclaims after taking the time to audit Plaintiff’s email account. Finally, these were compulsory counterclaims that, if not filed in the present action, would be barred in future litigation.

 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.