Walmart Dodges Bullet on Sex Discrimination

Scale of JusticeWal-Mart may have dodged the bullet for alleged systemic sex discrimination dating back at least a decade.

Last week a federal judge in San Francisco denied class certification in a statewide class action lawsuit filed by five female Wal-Mart employees in California on behalf of 150,000 past and present female workers in that state who  allegedly were denied equal treatment in pay and promotions.

This is the second defeat for plaintiffs seeking to file class action lawsuits against Wal-Mart on a state or regional basis. Wal-Mart won dismissal of a lawsuit in October that sought to represent female Wal-Mart workers in Texas.

 The U.S. Supreme Court last year rejected a 12-year-old class action lawsuit filed by six female employees of Wal-Mart on behalf of  1.6 million past and present female workers around the country. 

What’s left for the plaintiffs?

Class action lawsuits often are the only realistic way of addressing systematic discrimination by corporations because of  the high cost of litigation, the defendant’s “deep pockets,”  and the relatively paltry amount of damages typically available in individual cases.

Underwhelmed

Senior U.S. District Judge Charles R. Breyer ruled the California lawsuit failed to meet the  U.S. Supreme Court’s criteria for a collective legal action, including evidence of a company policy or decisions by higher-ups that affect all workers in the class. He the statistics “still do not reflect significant proof of a general policy of discrimination.”

Judge Breyer concluded the following evidence from the plaintiff’s is “underwhelming”:

  • About three-quarters of the stores paid women, on average, the same hourly rates as men. (Note: of course, this means that a quarter of Wal-Mart stores pay women, on average, a lower hourly rate than men. PGB)
  • Eighty-six female Wal-Mart employees in California described personal experiences of discrimination  – that represents only one woman for every 1,745 members of the proposed statewide class. (It’s unclear what number would be sufficient  for class action status- PGB)
  • The plaintiff’s produced evidence that Wal-Mart’s then-chief executive, Thomas Coughlin, in a 2004 meeting attended by district managers who approve pay and promotional decisions, said the key to success in choosing leaders was “a single focus to get the job done,” and that “men are better at focus.”
  • The plaintiffs said they had evidence of disparities throughout California and biased statements by top managers.

The U.S. Supreme Court ruled unanimously in June 2011 that the original lawsuit against Wal-Mart in 2001 failed to show any company-wide policy or attitude of discrimination  and said there were too many women in too many jobs at Wal-Mart to wrap into one lawsuit. The high court overturned lower court decisions that allowed nationwide class-action status.

Judge Breyer said the California lawsuit “is essentially a scaled-down version of the (nationwide) case with new labels on old arguments.” He said the plaintiffs challenged “the discretionary decisions of hundreds of decision-makers,” which, according to the U.S. Supreme Court, cannot be the basis of a class-action suit.  

Breyer said the remarks attributed to former Wal-Mart CEO Coughlin may have come from an outside consultant and were made after the period covered by the lawsuit.

Breyer, 72, was appointed to the federal bench in 1997 by then-President Bill Clinton.  His brother is U.S. Supreme Court  Justice Stephen Breyer.

Dodged a Bullet?

At one point, Wal-Mart, the nation’s leading retailer, was concerned about potentially serious liability for alleged sex discrimination.

In  2010, the New York Times published an article on a 1995 memorandum issued by Wal-Mart’s then counsel, Akin Gump Strauss Hauer & Feld,  that reported widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores.

The NYT reported the memo said that “women employed by Wal-Mart earned less than men in numerous job categories, with men in salaried jobs earning 19 percent more than women..”

By one measure, the memo states “. . . men were five and a half times as likely as women to be promoted into salaried, management positions.” Furthermore, in 1993, men employed by Wal-Mart as department managers were paid an hourly rate 5.8 percent higher than women in those positions. 

The Memo estimated that Wal-Mart’s potential legal exposure in a class-action sex discrimination suit was $185 million to $740 million for 1993 alone.

The  overall disparities in job assignments, the memo states, were “statistically significant and sufficient to warrant a finding of discrimination unless the company can demonstrate at trial that the statistical disparities are caused by legitimate, nondiscriminatory factors.”

At this point it appears that Wal-Mart has dodged that bullet.

Wal-Mart was “pleased” by California Judge Breyer’s ruling and said it has a had a  “strong policy” against discrimination in place for many years.

Mediation Goes Awry for Worker

After Outburst, He Won’t See Employer in Court

There is a new way for a worker to lose a lawsuit in federal court.

A three-judge panel of the U.S. 7th Circuit Court of Appeals in Chicago, IL, ruled recently that a worker could be fired for misbehaving during a mediation session called to resolve his complaint of sex discrimination.

Michael Benes had charged his Wisconsin employer, A.B. Data, Ltd. with sexgaveldiscrimination after working for the company for four months.

 The U.S. Equal Employment Opportunity Commission arranged for mediation in which, after an initial joint session, the parties separated into different rooms and a go-between relayed offers.

Upon receiving a settlement proposal that he thought too low, court papers say Benes “stormed” into the room used by A.B. Data Ltd. representatives, and said loudly: “You can take your proposal and shove it up your ass and fire me and I’ll see you in court.”

The company accepted Benes’ counterproposal but then fired him.

Retaliation

Benes filed suit under the anti-retaliation provision of Title VII of the Civil Rights Act, 42 U.S.C. 2000e–3(a), which bans retaliation because a person “has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” [Emphasis supplied].

A magistrate judge upheld Benes’ dismissal, finding that Benes was fired for misconduct during the mediation, not for making or supporting a charge of discrimination.

The appeals court agreed and upheld Benes termination.

In the past, Benes’ misbehavior might have resulted in a sanction by the court or his employer.

Ignores the Employer’s Behavior

An opinion written by Chief Judge Frank A. Easterbrook states – without explanation – that Benes “abandoned” his claim of sex discrimination upon filing the retaliation complaint. This is somewhat baffling in that the original complaint of sex discrimination obviously was the underlying basis for the retaliation complaint.  Benes would never have been engaged in mediation if he had not filed the discrimination complaint. And Benes would not have been fired if he had not engaged in mediation.

The appellate panel proceeded to completely ignore A.B. Data’s  behavior and to focus only upon Benes’ conduct. 

Judge Easterbrook said Benes’ actions constituted a “serious breach” of the mediation protocol, adding, “If A.B. Data would have fired a person who barged into his superior’s office in violation of instructions, and said what Benes did, then it was entitled to fire someone who did the same thing during a mediation.”

The appellate panel said that Title VII does not establish a “privilege to misbehave” in mediation.

Chief Judge Easterbrook writes that the prospect of being fired for an egregious violation of a mediator’s protocols would not discourage a reasonable worker from making a charge of discrimination or from participating in the EEOC’s investigation.

Impact of Harassment

The details of the alleged discrimination suffered by Benes were not included in the appellate decision, nor are the details of the offer submitted by A.B. Data to resolve Benes’ complaint.

Those of us who work in the area of workplace bullying and abuse are familiar with the well-documented mental and physical stress suffered by targets over time, which occasionally results in erratic or self-defeating behavior. For these and other reasons,  mediation is not ideal in these cases.

Benes clearly did himself no favors with his hotheaded behavior. Still, this decision appears to be yet another indicator of the lack of sympathy for the problem of workplace abuse in the federal courts, where, coincidentally,  judges have lifetime tenure.

Research shows that employment discrimination cases are dismissed at a far higher rate than other types of cases in federal courts before they ever reach a jury.

Workers beware – any breach of civility on your part at any point in the proceedings can have severe consequences. 

Still OK to Fire Irresistable Attraction

The all-male Supreme Court of Iowa has upheld its earlier decision that a dentist did not discriminate when he fired his long-time dental hygienist whom he found to be an irresistible attraction. 

 In its decision, the Court focused upon the purported reason that the dentist fired the hygienist, rather than the dentist’s behavior. 

The Court said the legal question it must decide was: “Can a male employer terminate a long-time female employee because the employer’s wife, due to no fault of the employee, is concerned about the nature of the relationship between the employer and the employee?” 

The Court concluded that Dr. James H. Knight did nothing illegal when he fired  hygienist Melissa Nelson because Knight’s wife insisted that he do so –  not because of sex discrimination.

The Court upheld the firing last December but agreed to reconsider the case after a the ruling was widely criticized. (Ms. Nelson appeared in a skit lampooning the decision  on  Comedy Central.)  At that time, this blog observed that employees  often have little protections against discriminatory behavior when the employer is the boss.

Even though  Knight admitted that  the alleged threat to his marriage would not have existed if Nelson were male, the Iowa Court said the record did not support a conclusion that Knight took an adverse employment action against  Nelson “because of a gender-specific characteristic.” 

Nelson, who worked for  Knight, for about ten years,  alleged he violated the Iowa Civil Rights Act because she would not have been fired if she had been male.

The Court said Knight’s motive for firing Nelson was his desire to allay his wife’s concerns over Nelson’s “perceived”  threat to their marriage. “The civil rights laws seek to insure that employees are treated the same regardless of their sex or other protected status … , Dr. Knight’s unfair decision to terminate Nelson (while paying her a rather ungenerous one month’s severance) does not jeopardize that goal,” said the Court.

Nelson, who was 20 when she began working for Knight in 1999, denied ever flirting with Knight and said she considered him to be a friend and father figure.

 During the last year and a half of her employment, Knight began making sexual comments to her. Among other things, he complained that her clothing was too tight and asking her to put on a lab coat.  Knight acknowledged he told Nelson that “if she saw his pants bulging, she would know her clothing was too revealing.”

Nelson and Knight began texting during the last six months of Nelson’s employment.  Knight admits he asked her how often she experienced an orgasm. The Court found it significant that Nelson, who did not answer the text, “does not remember ever telling Dr. Knight not to text her or telling him that she was offended.”

Knight’s wife, Jeanne, discovered that Knight and Nelson were texting and demanded that he terminate Nelson’s employment because Nelson “was a big threat to our marriage.”

In both of its rulings the Court upheld a pre-trial ruling by a lower court judge, who granted Knight’s request for summary judgment in Nelson v. Knight, No. 11–1857 (Dec. 21, 2012).. Thus, the Court has twice concluded that there is absolutely no way that a jury could legally  decide against Knight and hold in favor Nelson. The Court’s holding means that there will be no trial in the case.

The Court notes that Nelson, did not file a sexual harassment lawsuit. or allege a hostile work environment.

 

Oregon Interns Get Harrassment/Discrimination Protection

InternsUnpaid interns are especially vulnerable to predatory behavior in the workplace because they are young and inexperienced.

However, many courts have ruled that unpaid interns are not protected by state and federal harassment and discrimination laws.

This week the Oregon legislature agreed to extend workplace protections against harassment and discrimination to unpaid interns.  These protections formerly were reserved only for employees.

The Oregon Senate unanimously passed HB 2669, sending it to Gov. John Kitzhaber for signature. The Oregon house unanimously passed the bill last month. Kitzhaber has indicated that he will sign the bill. 

The new law will give unpaid interns legal recourse against employers for workplace violations including sexual harassment; discrimination based on race, color, religion, gender, sexual orientation, national origin, marital status or age; and retaliation for whistleblowing, among other things.

With no protection in state law, you might think that unpaid interns could turn to federal law. You’d be wrong.

The Equal Employment Opportunity Commission has issued  guidelines that provide coverage to volunteers under Title VII of the Civil Rights Act of 1964 “if the volunteer work is required for regular employment or regularly leads to employment with the same entity.”  However, unpaid interns have been unable to bring sexual harassment or civil rights complaints under Title VII  because judges have not found them to be “employees”  to whom protections are explicitly afforded.

According to a  2010 study by the Economic Policy Institute (EPI), federal courts have consistently found that the question of whether an individual is compensated for his or her work by an employer is the first test for determining employee status. Accordingly, unpaid interns, or even interns paid by an entity other than an employer, do not receive workplace discrimination protection.

The EPI study reports that the leading precedent for the failure to protect unpaid interns is the case of O’Connor v. Davis,  126 F.3d 112 (2d Cir. 1997).  Bridget O’Connor was required to complete an internship for her college degree and chose to work at a local psychiatric center. There, O’Connor allegedly was subject to repeated sexual harassment by one of her supervisors, Dr. James Davis. The district court summarily dismissed O’Connor’s complaint because the plaintiff, as an unpaid intern, did not receive compensation from the center, and thus did not qualify as an employee protected under Title VII. The decision was upheld on appeal.

Oregon Labor Commissioner Brad Avakian told the Associated Press that interns had contacted his office looking for help in the past and “we had to tell them that the law did not protect them.”

Under the measure, an intern who alleges workplace harassment or discrimination, among other violations, can bring a lawsuit against the employer or file a formal complaint with the Oregon Bureau of Labor and Industries.

Avakian said the idea for the bill came from a legislative intern at the Bureau of Labor and Industries. He said the intern discovered the loophole and brought it to his attention.  In 2011, a similar bill failed to gain traction. This year, however, the bill passed with broad support from civil rights groups and a student advocacy group.

The Oregon law  does not create an employment relationship and does not affect wage or workers’ compensation laws.

 Photo by: John Amis

 

 

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