Company Liable for Lovestruck HR Director

A federal appeals court in Puerto Rico has rejected the narrow limitations imposed by the U.S. Supreme Court on who is considered to be a “supervisor” in employment discrimination cases.

The U.S. Court of Appeals for the First Circuit held that Developers Diversified Realty Corp (DDR) can be held liable for sexual harassment by Rosa Martinez, an HR officer for the company, who engineered the ouster of Antonio Velázquez-Pérez, a company regional general manager, after he rebuffed her advances.

Both Martinez and Velázquez worked in the Puerto Rico offices of DDR, a shopping center management company based in Ohio.

In its ruling , the appeals court acknowledged that the U.S. Supreme Court last year limited employer liability under Title VII of the Civil Rights Act in cases where a non-supervisor causes a discriminatory action. Martinez was not Velázquez’ supervisor.  However, the 1st Circuit court said, DDR should have known that Martinez’s recommendation that Velázquez be fired was the product of discriminatory animus and therefore can be held liable under Title VII for negligently allowing Martinez to cause Velázquez’s termination.

Noting the case presented issues that it had not addressed previously. the appeals court concluded that an employer can be held liable if  the co-worker acted for discriminatory reasons with the intent to cause the plaintiff’s firing; the co-worker’s actions were in fact the proximate cause of the termination; and the employer allowed the co-worker’s acts to achieve their desired effect though it knew (or reasonably should have known) of the discriminatory motivation.

The Court reversed the district court’s grant of summary judgment on Velázquez’s claim of sexual discrimination in violation of Title VII.

According the  opinion, Velázquez and Martinez had mutually flirted with each other when they both went to a company meeting in April 2008 and stayed at the same hotel. That night, Velázquez was walking with two female employees of the company when Martinez appeared in their path and asked where they were going.  Martinez followed Velázquez to his room,  tried to force her way in and refused to leave until Velázquez threatened to call security.  She then telephoned hm several times and sent a jealous email to one of the women that he had been walking with.  Shortly thereafter, Martinez threatened to have Velázquez fired, stating, “I don’t have to take revenge on anyone; if somebody knows your professional weaknesses, that person is me.”

Velázquez complained about Martinez’s behavior to his supervisor, who advised him to send her a “conciliatory” email because “[s]he’s going to get you terminated.” He and another male employee then jokingly suggested that Velázquez have sex with Martinez.

Martinez began a campaign of harsh criticism of Velázquez’s work, culminating with a recommendation that he be terminated. The top company official in Puerto Rico suggested that instead of termination Velázquez be issued a formal warning and placed on a Performance Improvement Plan.  Martinez went over his head and complained to two senior officials at the company’s headquarters in Ohio.

Meanwhile, Velázquez and Martinez went to another business meeting and stayed at the same hotel.  This time Martinez followed Velázquez into an elevator and said  she loved him and “wanted to have a romantic relationship with him.” Velázquez refused. That night, Martinez sent an email to the Ohio officials recommending that Velázquez be terminated immediately “because his behavior has been against the company code of conduct and has already impacted the trust form other team members.”

Four days later, on August 25, 2008, Velázquez was terminated for “[a]bsenteeism,” “[f]ailure to report,” and “[u]nsatisfactory performance.”

Appeals Ct Sides with EEOC in Conciliation Dispute

A federal appeals court in Chicago has departed from several other federal circuits by ruling that judicial review is not appropriate over efforts by the U.S. Equal Employment Opportunity Commission  to settle employment discrimination complaints.

Title VII of the Civil Rights Act directs the EEOC  to try to negotiate an end to an employer’s unlawful employment practices before it seeks a judicial remedy but it does not require the EEOC to actually reach a settlement.

Nevertheless, several federal appeals courts have allowed employers to raise an affirmative defense in employment discrimination cases that the EEOC failed to engage in good faith settlement negotiations  prior to filing a lawsuit. This is referred to as a “failure-to-conciliate” defense.

A three-judge panel of the U.S. Court of Appeals for the Seventh Circuit in Chicago ruled last week that an implied failure-to-conciliate defense would add an “unwarranted mechanism” in Title VII by which employers could avoid liability for unlawful discrimination. “They can do so through protracted and ultimately pointless litigation over whether the EEOC tried hard enough to settle,” said the panel.

In addition, the panel said, the implied failure-to-conciliate defense runs “flatly contrary to the broad statutory prohibition on using what was said and done during the conciliation process  ‘as evidence in a subsequent proceeding.’”

Six other federal circuits – the Second, Fourth, Fifth, Sixth, Tenth and Eleventh Circuits –  allow some form of judicial review over the sufficiency or good faith of the EEOC’s conciliation efforts.

The 7th Circuit ruling came in a 2008 sex discrimination case filed against Mach Mining, which  allegedly refused to hire female applicants  for coal mining jobs. After investigating, the EEOC found there was reasonable cause to believe Mach had discriminated against a class of female job applicants at its Johnston City site. The EEOC engaged in informal conciliation with Mach but in 2011 the EEOC concluded the parties could not agree and filed a lawsuit.

Mach argued the suit should be dismissed because the EEOC failed to conciliate in good faith.  The EEOC did not contend that its efforts were either sincere or reasonable, only that they were not reviewable as a defense to unlawful discrimination.

The 7th Circuit panel said the U.S. Congress gave the EEOC broad discretion to negotiate as it sees fit, including the power to accept or reject any offer or proposed settlement for any reason.  “Nor can Mach Mining explain just how many offers, counteroffers, conferences, or phone calls should be necessary to satisfy judicial review, despite repeated invitations to provide the court with a workable standard,” it added.

The U.S. Chamber of Commerce filed a brief in the case arguing that it was necessary to keep the EEOC on a tight leash to avoid “agency shenanigans” but the 7th Circuit panel noted the EEOC  filed only 122 merit lawsuits in 2012.  “That so few unsuccessful efforts at conciliation end up in court shows how constrained the agency is by practical limits of budget and personnel,” said the appeals court.

The panel remanded the case, EEOC v. Mach Mining, No. 13-2456,  to the lower court for further proceedings.

In brutally harsh decision last fall in  EEOC v. CRST Van Expedited, Inc.,  Chief Judge Linda R. Reade of the U.S. District Court of Iowa ruled  that the  EEOC  must pay CRST, one of the nation’s leading transport companies,  a judgment of $4,694,422.14  stemming from a lawsuit filed by the EEOC alleging sex discrimination.  Judge Reade dismissed at least 67 class members from that case because the EEOC’s allegedly failed to conciliate with CRST with respect to each individual class member.

Library of Congress v. Free Speech

do-not-enterThe Library of Congress (LOC) has closed its doors to a foundation that was created by current and former employees to assist LOC employees in pursing complaints of racial discrimination.

The issue is interesting because it raises concerns about the right to free speech under the First Amendment of the U.S. Constitution, which would appear to be central to the Library’s mission.

A panel of three judges for the U.S. Court of Appeals for the D.C. Circuit recently upheld a lower court’s dismissal of a lawsuit filed against the LOC by The Cook and Shaw Foundation,  a non-profit group formed by present and past employees to assist LOC employees in filing race discrimination lawsuits.

The Library has a policy in which it recognizes certain employee organizations and gives them meeting space, the right to post materials on bulletin boards, etc.  The Foundation’s request for recognition was denied because “the Foundation’s purpose of helping employees bring and maintain lawsuits against the Library is inconsistent with the Library’s policy that recognized employee organizations be ‘concerned only with welfare, financial assistance, recreational, cultural, or professional activities.’”

The Foundation filed a lawsuit alleging the LOC violated the retaliation clause of Title VII of the Civil Rights Act of 1964.  This clause makes it unlawful for an employer to discriminate against any employees (or applicants for employment) because they have opposed any practice made an unlawful by the law or because they have made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing.

There is a certain logic to the Foundation’s view that helping employees file race discrimination lawsuits relates to their welfare and professional activities.  However, the appeals court ruled that Title VII covers only employees and job applicants and not foundations. The appellate panel said the Foundation failed to identify any particular library employee who was subjected to retaliation in violation of Title VII.

“Perhaps such allegations could have formed the makings of a First Amendment claim by the Foundation. But plaintiffs advanced a Title VII claim,” the panel concludes.

The case is Howard R.l. Cook & Tommy Shaw, et al v. James Billington, #12-5193.

Pregnancy Discrimination Act: 35 Years Later

No Accommodation Requirement

Thirty five years ago this week, President Jimmy Carter signed into law the Pregnancy Discrimination Act of 1978 (PDA).

The PDA,  an amendment of Title VII of the Civil Rights Act, has proven to be a weak tool to combat  a major societal problem;  It  requires employers to treat pregnant women like others in the workplace but  it does not require employers to make even minimal accommEEOCodation for pregnancy-related conditions  (such as difficulties standing for long period, lifting restrictions, insufficient bathroom breaks, etc.).

Efforts last year to address the PDA’s shortcomings died in the U.S. Congress but the U.S. Equal Opportunity Employment Commission (EEOC) in its 2013-2016 strategic plan  identified combating pregnancy discrimination as a top priority. The EEOC, which is responsible for enforcing the PDA, characterizes the problem as an “emerging and developing” issue. Specifically, the EEOC said it would address the problem of “accommodating pregnancy-related limitations” under the Americans with Disabilities Act Amendments Act and the PDA.

The EEOC and Fair Employment Practice Agencies around the country reported 5,797 complaints of pregnancy discrimination in 2011.

True to its word, the EEOC has filed a spate of lawsuits this year to combat pregnancy discrimination. Most, if not all,  of these lawsuits involve individual defendants and somewhat minor settlements but the EEOC’s effort raises awareness of the problem and, hopefully, puts employers on notice that they are being watched.

 Lawsuits Filed

Here is a sampling of the lawsuits filed this year by the EEOC involving the PDA:

  •  EEOC v. Reed Pierce’s Sportsman’ Grille:  A woman who was four months pregnant with her first child was fired because, her supervisor allegedly said, “The baby is taking its toll on you.”  The EEOC  filed suit in the U.S. District Court for the Southern District of Mississippi.  After the defendant lost two motions to dismiss the case, it settled for $20,000.
  • EEOC v. Ramin, Inc.:   Ramin Inc., the owner of a Comfort Inn & Suites, allegedly fired a  housekeeper after she reported her pregnancy because of supposed concerns about potential harm that her job could cause the baby.  The EEOC filed suit in U.S. District Court for the Eastern District of Michigan. The defendant agreed to pay $2,500 in back pay and $25,000 in compensatory and punitive damages.
  • EEOC v. Engineering Documentation Systems, Inc.:  A management official allegedly made derogatory remarks about a pregnant worker and  refused her request to move her office closer to the restroom to accommodate her nausea.  While she was out on leave, the company changed her job description and then terminated her.  The EEOC filed suit in the U.S. District Court for the District of Nevada. The defendant agreed to pay $70,000 to settle the case.
  • EEOC v. James E. Brown & Associates, PLLC:  A  Washington based law firm offered Zorayda J. Moreira-Smith a position as an associate attorney in January 2011.  The firm allegedly rescinded its job offer  the same day after when Moreira-Smith told them she was six months pregnant and asked the firm about its maternity leave policies.  The EEOC filed suit in the U.S. District Court for the District of Columbia. The defendant agreed to pay an $18,000 settlement,  to implement a non-discrimination policy and  to provide training to the firm’s personnel.
  • EEOC v. Platinum P.T.S. Inc. D/B/A/ Platinum Production Testing Services:  A clerk  requested time off for medical treatment relating to her miscarriage.  After she missed five days of work,  the defendant fired her.  The EEOC filed suit in the U.S. District Court for the Southern District of Texas. The defendant agreed to pay $100,000 to settle the pregnancy discrimination suit.

U.S. Sen. Robert Casey, Jr., of Pennsylvania proposed the Pregnant Workers Fairness Act (PWFA) in 2012 to guarantee pregnant women the right to reasonable accommodation when the short-term physical effects of pregnancy conflict with the demands of a particular job, as long as the accommodation does not impose an undue hardship on the employer. The bill died in committee.