Category Archives: Discrimination

March 12, 2015

EEOC Strategic Enforcement Priorities: More Insight from Denver’s Director (Part Two)

As we wrote last week, John Lowrie, the new director of the EEOC’s Denver Field Office, recently offered insight into the agency’s national Strategic Enforcement Plan (SEP) and how his office will approach those enforcement goals. Here is the second article in the series exploring the third and fourth priorities in the EEOC’s SEP.

Priority #3 – Developing Issues

Field Director Lowrie explained the EEOC and its individual field offices are working to advance a number of developing issues. These include:

Reasonable ADA accommodations – one example is telecommuting, where an employee’s physical presence at the company is not an essential job function. The EEOC has successfully pursued this in a case against the Ford Motor Company but the case is being reexamined by the full Sixth Circuit Court of Appeals so may not stand.
Pregnancy discrimination – Mr. Lowrie discussed the lengthy Pregnancy Discrimination Act (PDA) enforcement guidance issued last July. The guidance document contains many hypothetical situations that the agency deems would violate the PDA as well as a section on employer best practices.
Title VII accommodations – Mr. Lowrie pointed to the Abercrombie & Fitch religious accommodation case which is currently before the U.S. Supreme Court as an example of how the agency looks to ensure employers make reasonable accommodations for characteristics protected by Title VII. At issue in the Abercrombie case is whether a Muslim job applicant who wore a headscarf to her job interview and was denied employment was required to request a reasonable accommodation on religious grounds in light of the company’s “look policy” which would not have permitted wearing the headscarf at work.

Priority #4 – Equal Pay Act

The fourth priority in the EEOC’s SEP is enforcement of the Equal Pay Act (EPA). Mr. Lowrie noted that Jenny Yang, who was appointed as the EEOC’s new chairperson last September, had made a recent visit to the Denver field office during which she specifically mentioned EPA issues to the Denver investigators and staff. Because equal pay issues are high on the Chair’s agenda, charges involving allegations of unequal pay based on gender will receive additional attention by EEOC investigators and attorneys.

Mr. Lowrie also noted that Wyoming is the worst state in the nation for pay disparity issues. Because the Denver field office has jurisdiction over Wyoming (as well as Colorado), the Denver field office may look to change Wyoming’s poor ranking through vigilant enforcement of equal pay charges that come into its office.

Steps to Avoid Additional Scrutiny

Because the EEOC is giving priority status to these types of charges, you need to take time to review your compliance efforts related to these issues. First, take a look at your reasonable accommodation process. Have you trained your managers and supervisors to recognize when an accommodation is being requested? Do you engage in an interactive process with the applicants and employees who make accommodation requests? Be certain to document your interactive process and all accommodations decisions you make. Second, review your policies as they relate to pregnant employees. Make sure that you do not treat pregnancy less favorably than other medical conditions and consider possible ADA accommodations if circumstances so warrant. Third, audit your pay grades and compensation structure to make sure that you are paying workers doing the same work equally, regardless of gender.

Next Installment Will Focus on Final Two EEOC Priorities

In the next and final article in this series, we will offer insight into the last two of the EEOC’s strategic priorities. Both are areas in which the EEOC has vigorously sued employers whose policies and practices it deems are discriminatory, so stay tuned.

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March 2, 2015

EEOC Strategic Enforcement Priorities: Insight from Denver’s Director (Part One)

By Jude Biggs

Knowing the Equal Employment Opportunity Commission’s (EEOC’s) top priorities can help you direct your risk management efforts and avoid enhanced scrutiny. John Lowrie, the new director of the EEOC’s Denver Field Office, recently spoke to the Labor and Employment Section of the Colorado Bar Association about the agency’s national Strategic Enforcement Plan (SEP) and how his office will approach those enforcement goals. This article is the first in a series that will share Mr. Lowrie’s insight into how EEOC investigators and attorneys in the Denver Field Office work toward fulfilling the national enforcement priorities.

Certain EEOC Charges Get Immediate Attention

The Denver field office currently has 12.5 investigators, 7 attorneys, 3 mediators and 1 administrative law judge. With the volume of charges received by the Denver office remaining steady at between 1,800 to 2,000 charges each year, charges alleging certain types of claims get enhanced attention which can include immediate review by the legal staff, up to and including the director himself.

Which charges receive this immediate attention? Any charge that touches on one of the EEOC’s six national strategic enforcement priorities. Here we discuss the first two priorities in the national SEP, including Mr. Lowrie’s perspective from the Denver Field Office.

Priority #1 – Remove Barriers to Employment

According to Field Director Lowrie, there are two main components to the EEOC’s first enforcement priority of removing barriers to employment: (1) arrest and conviction records, and (2) medical screening questions and procedures. If a charge alleges discriminatory use of criminal background checks in hiring or the inappropriate timing or use of medical questions or exams, the EEOC will escalate that charge for immediate review.

The EEOC has brought several high-profile lawsuits in the past few years alleging that blanket “no hire” policies that prohibit hiring an applicant with a criminal record have a discriminatory impact on African Americans and other protected classes in violation of Title VII. In the Peoplemark case, however, the EEOC was ordered to pay the prevailing employer over $750,000 in attorneys’ and expert witness fees when the court ruled that no company-wide criminal background check policy existed, an allegation that was essential to the EEOC’s case. Similarly, in the Freeman case, a federal appeals court recently upheld the dismissal of the EEOC’s case, calling its expert’s analysis “utterly unreliable.” Despite its losses, the EEOC is pursuing claims based on criminal background checks, with lawsuits against BMW, Dollar General and other companies still ongoing.

Priority #2 – Vulnerable Workers

The second strategic enforcement priority is the protection of vulnerable workers. Field Director Lowrie explained that this includes agricultural workers, immigrant and migrant workers and mentally disabled workers.

When discussing immigrant and migrant workers, Mr. Lowrie noted the EEOC does not look at whether the workers are authorized to work in the U.S. or if they are in the country illegally, commenting that the EEOC is not ICE or Homeland Security. Instead, the EEOC looks to enforce the anti-discrimination laws under its jurisdiction so that employers do not escape enforcement just because they use unauthorized workers.

As for protecting mentally disabled workers, Mr. Lowrie specifically mentioned the EEOC’s win in a case against a turkey farm in the Midwest in which over thirty men with intellectual disabilities were housed in substandard facilities, denied medical care and harassed both verbally and physically for years.

Stay Tuned for Insight into Other Top EEOC Priorities

In the next few weeks, we will explore the EEOC’s remaining strategic priorities. In the meantime, review your background check policy to ensure you do not have a blanket “no hire” criminal record exclusion. Check that your employment application does not state that applicants will be automatically excluded if they have a criminal record. Make sure that you do not ask for medical information, such as family medical history, or send applicants for a medical exam until after a conditional job offer has been made. Be careful with wellness programs, ensuring they are voluntary. And if you employ vulnerable workers, make certain that your policies and practices do not single them out for disparate treatment in pay, job assignments or other conditions of employment.

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February 16, 2015

Lessons From a $15M Discrimination Verdict

By Mark Wiletsky

A Colorado federal jury reportedly awarded $15 million last week to 11 workers who claimed they had been subject to workplace harassment, discrimination and retaliation because of their race and national origin. Ten of the 11 current and former workers who sued their employer, a trucking and mail-sorting company at Denver International Airport, were black men. Three had been born in the United States and the remaining seven were from Mali, Guinea and Brazil. Their allegations included that racist comments pervaded the workplace, that they were discriminated in work assignments, layoffs and pay and were segregated into certain unfavorable job categories and shifts, and that they faced retaliation after complaining about the harassment and discrimination.

Although we do not know exactly which facts or claims persuaded the jury to award this large sum, the fact that the jury awarded $13 million dollars for punitive damages suggests that it believed the company’s actions (or inactions) were particularly bad.

What can you learn from this significant discrimination verdict? Even if the verdict is later reversed or reduced, you can learn what not to do when managing a racially and ethnically diverse workforce.

Ignoring Complaints and Promoting the Harassers

The workers in this case alleged that they complained internally about racist comments and slurs made by supervisors, leads and co-workers and that nothing was done. Examples of some supposed comments directed toward the workers were “lazy, stupid Africans,” “go back to your f***ing country,” “they need to fire all the n***ers here” as well as regular use of the N-word. Instead of stopping the comments, management supposedly turned a deaf ear and even promoted some of those who made the slurs.

Don’t ignore inappropriate comments when you hear them. It is up to you to stop racial and ethnic slurs immediately and take action to ensure they are not pervasive in your workplace. If an employee complains about discriminatory name-calling and threats, you need to investigate the report and take appropriate action. Be sure to confirm—in writing—that you met with the accuser(s) to discuss the results of your investigation, and ensure there is no retaliation. Then follow-up again to ensure things have improved. Doing so will demonstrate your commitment to a workplace free from discrimination and harassment – so long as you are prepared to take action against those who violate your policies.

Failing to Enforce EEO and Harassment Policies

You likely have an Equal Employment Opportunity and a Harassment policy in your employee handbook, but they do no good if you fail to enforce them. Review your policies, train your supervisors on them and enforce them uniformly and consistently.

Retaliating Against Those Who Complain or Their Supporters

The eleventh worker who sued the trucking company in this case was a white man who offered support for the African workers and provided evidence supporting their allegations. After being terminated from his job, he alleged his firing was in retaliation for his support.

Retaliation is within company control and in many cases, is preventable. Train your supervisors not to treat an employee who has complained of discrimination or harassment, or who has participated in a charge or lawsuit, differently than other employees are treated. Carefully analyze any adverse decision that would affect such an employee and make sure your decision is based on legitimate business reasons and is well-documented, in case you have to defend a retaliation complaint.

Fifteen Million Reasons To Do It Right

You don’t want to end up in front of a jury defending your employment practices, but if you find yourself in that position, you want to be able to show a jury you did everything you could to prevent discrimination and harassment in your workplace. If you don’t take those actions, a jury may very well punish you for it.

October 21, 2014

EEOC’s Failure to Engage in Conciliation Dooms Its Separation Agreement Lawsuit Against CVS Pharmacy

By Mark Wiletsky

Chalk up a loss for the Equal Employment Opportunity Commission (EEOC) in its lawsuit against CVS Pharmacy’s separation agreements. As we reported earlier, the EEOC sued CVS alleging that CVS’s separation agreements deterred employees from filing charges and communicating with the EEOC about discrimination and retaliation. Dismissing the case, a federal judge recently ruled that the EEOC failed to engage in the required procedural steps, including conciliation, before filing its lawsuit.

EEOC Dismissed Employee’s Charge, Then Went After Employer

This lawsuit is an example of the aggressive, proactive nature of the EEOC in extending the protections of Title VII to new and novel claims. The case arose after CVS terminated Tonia Ramos, a pharmacy manager. Ms. Ramos signed CVS’s standard separation agreement, which included a release of claims and a covenant not to sue. She then proceeded to file a charge with the EEOC claiming that her discharge was based on sex and race in violation of Title VII. Almost two years later, the EEOC dismissed Ms. Ramos’s charge.

The EEOC then contacted CVS asserting that based on the separation agreement, CVS was engaging in a pattern or practice of resistance to their employees’ full enjoyment of rights under Title VII. In other words, the EEOC concluded that even though the individual employee did not have a valid discrimination claim against CVS, it would bring a pattern or practice case against CVS based on the language in its standard separation agreement used with potentially hundreds of former employees.

No Conciliation, No Lawsuit

Under Title VII enforcement procedures, the EEOC has the authority to investigate and act on a charge of a pattern or practice of discrimination, whether filed on behalf of an allegedly harmed employee or by the EEOC itself. The procedures require that the EEOC try to resolve any alleged unlawful employment practices through informal means before filing a lawsuit. Such means include conferences, conciliation and persuasion. Although the EEOC and CVS discussed potential settlement by telephone twice before the EEOC filed suit, the EEOC failed to engage in conciliation, which proved fatal to its case. Because an attempt at reaching a conciliation agreement is a prerequisite to the EEOC filing suit and it was undisputed that the EEOC did not engage in any conciliation process, the federal court dismissed the EEOC’s case against CVS.

Judge’s Guidance is in the Footnotes

The case was dismissed on procedural grounds, but the judge took the opportunity to offer his view on the merits of the EEOC’s arguments in several footnotes in the opinion. First, the EEOC argued that the term “resistance” as used in Title VII should be interpreted broadly to extend to the language in CVS’s separation agreement even if that language did not amount to discrimination or retaliation under the Act. The judge rejected that argument, stating that the term “resistance” requires some retaliatory or discriminatory act.

Second, the judge discussed the “covenant not to sue” provision in CVS’s separation agreement. Even though the provision stated that an employee could not “initiate or file . . . a complaint or proceeding asserting any of the Released Claims,” the release of claims (in another paragraph of the separation agreement) stated that it did not limit “any rights that the Employee cannot lawfully waive.” In addition, the agreement contained two carve out provisions specifying an employee’s “right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws” and that the agreement did not prohibit the employee from cooperating with any such agency in its investigation. The judge wrote that these provisions would allow an employee to file an EEOC charge. He went on to write that even if the separation agreement explicitly banned filing charges, those provisions would be unenforceable and could not constitute “resistance” under Title VII.

One Case Down; One Still Pending

The dismissal of the CVS lawsuit is good news for employers who use separation agreements, especially in light of the judge’s comments signaling that the EEOC’s arguments were without merit. However, a similar case filed by the EEOC against College America is still proceeding through the federal court in the District of Colorado. (We wrote about the College America case here.) Like CVS, College America has asked the court to dismiss the EEOC’s case. We will let you know when the court rules on that motion. In the meantime, employers should review their separation agreements to ensure they include a provision that the agreement does not prohibit employees from filing a charge, participating in an investigation or otherwise cooperating with an appropriate federal, state or local government agency that enforces discrimination laws.

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September 23, 2014

Cheyenne Jury Awards $1,481,000+ On FMLA Retaliation Claim

By Brad Cave

The series of large verdicts for Wyoming employees seems to be marching forward. The most recent example occurred recently when a Cheyenne jury awarded over $740,000 to a trona miner after deciding that he was fired because he took FMLA leave. With liquidated damages available in an FMLA case, the Wyoming court entered judgment in an amount in excess of $1.48 million in favor of the employee. This case stands as yet another example about the importance of supervisor training and careful, well-documented and consistent decision making.

Long Term Employee With A Pain in the Neck. We first told you about this case in March of this year, when the Tenth Circuit Court of Appeals sent the case back to Wyoming for trial after reversing the trial court’s dismissal of the case. (Safety Violation or Too Much Intermittent FMLA Leave?). Here is a short recap of the facts.

Steven Smothers had been employed by Solvay Chemical for 18 years when his employment was terminated. Smothers had experienced back problems since 1994 resulting in three surgeries on his neck and other medical procedures, and an extended course of medical treatment by specialists. Over the years, Smothers took intermittent FMLA leave for his medical appointments and when he was unable to work due to the pain. The amount of FMLA leave he took did not go unnoticed. He was pressured by the production superintendent to change shifts to lessen the additional overtime cost caused by his absences, but such a change would have cost him about $7,000 per year in shift differential pay. Solvay also gave Smothers a negative rating on his performance evaluation because of his absences, and he was told that he was rejected for a promotion because of the leave.

Smothers’ Safety Rule Violation. In August 2008, Smothers and his coworkers were performing an acid wash, which Solvay did every six months to clean residual trona out of the equipment. When Smothers noticed that a damaged spool piece had caused a leak, he began to fix it without obtaining a line break permit which was required by Solvay safety rules. Smothers and a co-worker, Mahaffey, argued about whether the permit was necessary, and after Smothers removed the spool piece without first getting the permit, Mahaffey immediately reported Smothers’ actions to a supervisor.

Solvay terminated Smothers’ employment on August 28, 2008, based on a joint decision of six Solvay managers. Five of the six decision makers testified that the argument between Smothers and Mahaffey weighed heavily in the group’s decision to fire Smothers. Although the trial court originally dismissed the case, the Tenth Circuit believed that Smothers had presented enough evidence to create doubt about the real reasons for Smothers’ termination. So, the case was sent back to the trial court for trial.

What’s the Real Reason for Smothers’ termination? Like all retaliation cases, the jury in this trial was asked to decide whether Smothers was fired for a safety rule violation, as the employer contended, or because his employer retaliated against him for using intermittent FMLA leave or discriminated against him because of his disability. We don’t have a transcript of the trial, so we cannot tell you what evidence the jury heard or what facts persuaded the jury. We do know that the Tenth Circuit reasoned that the jury could disbelieve Solvay’s reasons because:

Supervisors criticized Smothers informally and in his performance evaluation for taking FMLA-protected leave, and rejected him for a promotion because of his time off;
Solvay did not give Smothers an opportunity to describe or explain his side of the argument with Mahaffey, even though the argument was a central reason for the decision to terminate Smothers’ employment;
Other Solvay employees who committed safety rule violations were not terminated.

And the Jury Returns.The jury found in favor of Smothers on his FMLA claim, and awarded Smothers the amount of $740,535 for his lost wages and benefits from the date of his termination, August 27, 2008, through the date of trial. But the potential damages don’t stop with the lost wages. Under the FMLA, the successful employee may be entitled to an additional amount equivalent to the jury’s award for liquidated damages – in other words, a penalty against the employer for the violation. As a result, the court has entered judgment against Solvay in the total amount of $1,481,070, twice the amount of the jury’s verdict, plus interest since the date of termination. The trial court declined to award Smothers any future lost wages. However, Smothers is entitled to an additional judgment for his reasonable attorneys’ fees and costs, which could add hundreds of thousands of dollars to the total.

Bottom Line. Regardless of the final number after adding prejudgment interest and attorneys’ fees, this is one of the largest judgments ever entered against a Wyoming employer. We cannot speculate about what evidence led the jury to its verdict, but we can share some lessons, with the benefit of twenty-twenty hindsight, that will help any employer avoid this kind of result:

Managers and supervisors must be trained and committed to the fact that taking FMLA leave is protected by federal law, and must not be the reason for formal criticism, denied opportunities, or informal complaining. FMLA-protected leave cannot be held against an employee for any reason whatsoever. Any comment or suggestion to the contrary can be used as evidence of pretext.
Investigations must be thorough and even-handed. While we don’t know all the evidence in this case, the jury may have heard that Solvay spent much more time asking Mahaffey about the argument with Smothers, while never asking Smothers for his side of the argument. Everybody should get the same opportunity to tell their side of the story. An inadequate investigation can be used as evidence of pretext.
Employees must be treated consistently. Smothers had evidence that other Solvay employees intentionally violated safety rules without being terminated. Employers need to mete out comparable discipline for comparable violations, or have a compelling reason why an employee gets tougher punishment.
Employers must respect long years of service. Of course, keeping a job for eighteen years does nothing to technically change the legal relationship or create any new rights or protection for the employee. But, after that length of time with a good performance record, it becomes difficult for a jury to believe that termination is an appropriate response for one incident.

Wyoming juries have delivered substantial employee verdicts over the last few years. Employers should pay attention.

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August 7, 2014

Favoritism to Paramour is Not Gender Discrimination

By Brad Cave

Friendship, cronyism, nepotism, affairs – many types of personal relationships may result in one employee being treated better than another employee. But is that favoritism discriminatory? Does the non-favored employee have a discrimination claim against the employer? No, Title VII does not prohibit favoritism based on a special relationship, says the Tenth Circuit Court of Appeals.

“I Like You Best”

If an employer pays the CFO’s sister a higher wage than other employees doing similar work, offers the most lucrative deals to an employee who is the boss’s best friend or gives playoff tickets as a bonus to the manager’s boyfriend who works at the company, that special treatment is permissible because it is based on the special relationship or bond between the parties, not on a protected characteristic. It is only when the differential treatment is based on an impermissible classification, such as gender, race or age, that it crosses the line into unlawful discrimination. In a recent decision, the Tenth Circuit Court of Appeals affirmed that distinction, ruling that a supervisor’s favoritism toward a female subordinate based on their purported intimate relationship did not amount to reverse gender discrimination against her male counterpart. Clark v. Cache Valley Elec. Co., No. 13-4119 (10th Cir. July 25, 2014).

Reverse Gender Discrimination Under Title VII

Project manager Kenyon Brady Clark sued his employer, Cache Valley Electric Company, alleging violations of Title VII. Clark’s discrimination claim alleged that his supervisor, Myron Perschon, favored a female project manager, Melissa Silver, over him because Perschon and Silver were in a romantic relationship. Clark asserted that Perschon gave Silver better work assignments, paid her more for performing less work and performed most of Silver’s job duties himself. Although it turned out that there had been no affair, Clark still asserted that “whether they were having sex or not, there was favoritism.” When asked about the reason for the favoritism at his deposition, Clark admitted that if the favoritism was not due to a romantic relationship, he did not know the reason for it.

The Court analyzed Clark’s claim as a reverse gender discrimination case under which Clark needed to show circumstances that would support an inference that his employer discriminates against the majority (i.e., males) or that “but for [his] status the challenged decision would not have occurred.” Significantly, Clark did not assert that the favoritism was due to Silver being a female or that Cache Valley treated women more favorably than men. Instead, Clark focused on the preferential treatment that his supervisor offered to one specific female employee. That deficit was fatal to his reverse gender discrimination claim. The Court cited numerous cases where the motives for preferential treatment were other special relationships, such as friendship, nepotism or personal fondness or intimacy, in which it had ruled that such favoritism was not within the purview of Title VII’s anti-discrimination provisions. Because Clark’s discrimination claim was based only on the favoritism shown to a special friend and not on a protected characteristic, his claim was not covered by Title VII. The Court affirmed summary judgment in favor of Cache Valley.

Retaliation Claim Fails Too

Clark also raised a retaliation claim in his lawsuit against Cache Valley. Clark asserted that his supervisor, Perschon, retaliated against him by trying to get a competitor to hire him, refusing to communicate with him and otherwise distancing himself from Clark. Clark also alleged that he was fired in retaliation for complaining about Perschon’s favoritism and retaliation. He had complained to management about the alleged affair between Perschon and Silver, stating that it was difficult to continually respond to vendors and suppliers who had questions about the purported relationship. He reported that they were acting like a married couple. He later complained about the preferential treatment that Silver received from Perschon, including receiving better job assignments and higher bonuses. In a letter to the company’s CEO and to human resources, Clark wrote that over the past three years, he had personally and professionally suffered serious and real adverse effects to his employment due to the alleged affair. He wrote that the affair created a hostile work environment and that it was the company’s responsibility to ensure that the workplace was free of harassment and retaliation. Shortly after meeting with HR and the company’s legal counsel to discuss his letter, Clark was terminated.

The Court rejected Clark’s retaliation claim. To make out a Title VII retaliation claim, Clark needed to show that (1) he engaged in protected opposition to discrimination, (2) a reasonable employee would have found the challenged action materially adverse, and (3) a causal connection existed between the protected activity and the materially adverse action. The Court concluded that Clark failed to show that he engaged in protected opposition to discrimination. He needed to show that he had a reasonable good-faith belief when he complained to the company that he was engaging in protected opposition to discrimination and that his good-faith belief was reasonable both subjectively and objectively. He failed to do so. Although he made statements about a “hostile work environment” and “discrimination” in his complaints to the company, the Court found such statements to be conclusory and not related to gender discrimination. The statements were about Perschon’s favoritism to Silver based on the alleged inappropriate relationship, which was not gender discrimination. Therefore, Clark’s retaliation claim failed.

Just ‘Cuz It’s Legal Doesn’t Make It Smart

Clark’s reverse discrimination claim was a little more cut and dried than most because he essentially admitted that the preferential treatment shown by his supervisor to a female colleague was not due to her status as a female. Consider whether the outcome would have been different had Clark provided evidence that the supervisor historically treated women better than men. Or think about other situations where special relationships result in favoritism, such as when the boss takes all his male cronies to play golf with clients while the female employees toil away at work. Even though the courts have been clear about distinguishing favoritism based on special relationships from discrimination based on a protected class, employers are wise to steer clear from favoring some employees over others, especially when it comes to pay, bonuses and benefits where the non-favored employees can prove financial harm. Keeping the terms and conditions of employment on an even footing will help keep your workplace productive, the morale of employees high and your company out of court.

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June 16, 2014

Sexual Orientation Discrimination By Federal Contractors To Be Prohibited, According to News Reports

By Brad Cave

Major news sources are reporting that President Barack Obama plans to issue an executive order prohibiting federal contractors from discriminating against employees based on sexual orientation and gender identity. The specific details of the executive order have not been finalized and the signing date is not yet known. The planned order was revealed by administration officials on Monday, June 16, 2014, just before the President attends a lesbian, gay, bisexual and transgender (LGBT) event sponsored by the Democratic National Committee in New York City on Tuesday.

For twenty years, various federal lawmakers have introduced and tried to pass ENDA, the Employment Non-Discrimination Act, which would prohibit employment discrimination on the basis of sexual orientation by all employers with 15 or more employees. The most recent ENDA bill passed in the Senate but is dead in the House, as House Speaker John Boehner reportedly has said he will not allow the bill to come to a vote. Like it has done with its minimum wage and other pay initiatives that stalled in Congress, the White House is furthering its goals for U.S. workers outside the legislative process by issuing an executive order. Although the executive order applies only to federal contractors, many of whom already have policies prohibiting discrimination based on sexual orientation, the prohibition for contractors on this basis is seen as a step toward protection for LGBT workers in all work contexts.

Hearing word of the impending executive order, lawmakers and various groups appear to be urging the administration to include an exemption for religious reasons. That is unlikely to happen with the executive order but until we see the final order, it is unclear if any federal contractors and subcontractors will be exempt. We will keep you posted as this unfolds.

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June 13, 2014

Forced “Onionhead” Practices At Work Result in EEOC Religious Discrimination Lawsuit

By Brad Cave

“I love you, man.” Appropriate for beer commercials but perhaps not for the workplace. A New York employer who allegedly required employees to participate in prayer circles, thank God for their job and say “I love you” to managers and co-workers faces a religious discrimination lawsuit filed recently by the Equal Employment Opportunity Commission (EEOC). The EEOC seeks compensatory and punitive damages on behalf of three employees who were fired, allegedly for opposing the required “Onionhead” practices, and a class of similarly harmed individuals. EEOC v. United Health Programs of America, No. 14-cv-3673 (E.D.N.Y. filed June 11, 2014).

Company Required “Harnessing Happiness” or “Onionhead” Practices

According to the EEOC complaint, three former employees of United Health Programs of America filed charges alleging religious discrimination in violation of Title VII because the company required employees to engage in practices under a belief system called “Harnessing Happiness” or “Onionhead.” According to the Harnessing Happiness website, Onionhead is an “incredibly pure, wise and adorable character” who “wants everyone to know how they feel and then know what to do with those feelings.” The three women claim that the company required them to participate in various Onionhead-related activities on a daily and weekly basis, including praying, reading spiritual texts, burning candles, keeping lights at work very dim, thanking God for their employment and saying “I love you” to colleagues and managers. They assert that every day, employees were asked to select Onionhead-related cards to keep next to their computers and to wear Onionhead-related pins. In addition, one of the company’s upper managers and the aunt of the company owner, “Denali,” was the leader of the Onionhead practices and allegedly would require employees to attend one-on-one sessions with her in order to read and discuss books about “divine plans,” “moral codes” and “enlightenment.”

Fired – Allegedly for Opposing Onionhead Practices

Each of the three Charging Parties, Elizabeth Ontaneda, Francine Pennisi and Faith Pabon, were allegedly fired for objecting to the Onionhead practices. Pennisi, an Account Manager and IT Project Manager, spoke up at a managers’ meeting in July 2010, stating that she was Catholic and did not want to participate in the Onionhead activities. Ontaneda, a Senior Accounting Manager for Customer Service, also spoke up at the meeting, saying she felt the same way. A few weeks later, both women were relocated to work in an open area on the customer service floor, rather than in their offices, and their duties were changed to require answering phones. Denali placed a large statue of Buddha in Pennisi’s empty office. Denali also spoke of “demons” in connection with Ontaneda’s and Pennisi’s resistance to Onionhead practices. The day after losing their offices, the women called in sick and were terminated by the company owner by phone and voicemail.

Pabon, a Customer Care Consultant, attended a spa weekend in Connecticut with Denali and about 20 other customer service employees. Pabon alleges that Denali stated that the purpose of the trip was spiritual enlightenment and that they were to be together at all times, holding hands, praying and chanting. Pabon refused to participate in some of the group activities and on Monday following the spa weekend, Denali fired Pabon for “insubordination.”

Hostile Work Environment, Failure to Accommodate and Retaliation

The EEOC asserts numerous religious discrimination claims against the company, including creating a hostile work environment based on religion, failure to accommodate the employees’ own religious beliefs or lack thereof, terminating employees based on religion and retaliating against employees for opposing the required Onionhead practices in the workplace. The EEOC also alleges that some employees were constructively discharged when they felt compelled to leave the company to avoid participating in the required Onionhead activities.

Reports suggest that the company denies any merit to the lawsuit and that they expect it to be dismissed. We don’t yet know the basis of their defense and must remember that at present, the allegations are unproven. It will be an interesting case to follow. We will keep you posted as it proceeds through the court

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June 2, 2014

Disabled Employee Not Entitled to Additional Leave as Reasonable Accommodation

By Jude Biggs

After Kansas State University denied her request to extend a leave of absence for longer than six months, assistant professor Grace Hwang, who suffers from cancer, filed suit against the University alleging disability discrimination and retaliation under the Rehabilitation Act. The Tenth Circuit Court of Appeals ruled that the University had not violated the Rehabilitation Act because Ms. Hwang could not show that she was able to perform the essential functions of her job. In addition, the Tenth Circuit held that requiring the University to extend the six-month’s leave was not a reasonable accommodation. Hwang v. Kansas State Univ., No. 13-2070 (10th Cir. May 29, 2014).

Policy Provided Six-Month’s Paid Leave of Absence

Ms. Hwang was set to teach classes at Kansas State University under a one-year contract that covered all three academic terms — fall, spring and summer. Before the fall term, Ms. Hwang was diagnosed with cancer. She asked for a leave of absence to seek medical treatment. The University granted her a paid six-month leave under its regular policy which capped the length of a leave at six months.

As the six-month leave was coming to an end, Ms. Hwang’s doctor advised her to seek more time off of work. She asked the University to extend her leave through the end of the spring semester, intending to return before the summer term. The University refused to extend her leave but instead arranged for Ms. Hwang to receive long-term disability benefits, effectively ending her employment with the University.

Ms. Hwang sued the University in federal court alleging that the University’s denial of her request for extended leave constituted disability discrimination under the Rehabilitation Act. The Rehabilitation Act prohibits disability discrimination by entities that receive federal funds, such as Kansas State. 29 U.S.C. § 794(a). The federal district court dismissed her lawsuit on a motion to dismiss (before any discovery was done), and Ms. Hwang appealed to the Tenth Circuit Court of Appeals, which covers the states of Colorado, Utah, Wyoming, Kansas, Oklahoma and New Mexico.

Extended Leave Not A Reasonable Accommodation Under Rehabilitation Act

The University did not dispute that Ms. Hwang was a capable teacher and that her cancer rendered her disabled as defined by the Rehabilitation Act. The central issue in the appeal was whether the University was required to ignore the six-month time limit in its leave policy to extend Ms. Hwang’s leave of absence beyond six months. The Court said no. Because Ms. Hwang wasn’t able to work for an extended period of time, she was not capable of performing the essential functions of her job. In addition, requiring the University to keep her job open for that extended period of time did not qualify as a reasonable accommodation. The Court wrote: “[a]fter all, reasonable accommodations – typically things like adding ramps or allowing more flexible working hours – are all about enabling employees to work, not to not work.”

The Court noted that a “brief absence from work” for medical care may be required as a reasonable accommodation, as it likely allows the employee to continue to perform the essential functions of the job. Determining how long employers must provide for leave as a reasonable accommodation depends on factors such as the duties essential to the job in question, the nature and length of the leave sought and the impact of the leave on co-workers. That said, the Court stated that it would be difficult to find a six-month leave of absence in which the employee performs no work (e.g., no part-time hours or work from home) reasonable in any job in the national economy today. Ms. Hwang’s terrible problem, in the Court’s view, was one other forms of social security aim to address. In addition, the Court noted that the aim of the Rehabilitation Act is to prevent employers from denying reasonable accommodations that would allow disabled employees to work, not to turn employers into a “safety net” for those who cannot work.

“Inflexible” Six-Month Leave Policy Not Inherently Discriminatory

Ms. Hwang asserted that the University’s “inflexible” sick leave policy that capped the maximum length of sick leave at six months violated the Act. She cited the EEOC’s guidance manual which states that if a disabled employee needs additional unpaid leave as a reasonable accommodation, the employer must modify its “no-fault” leave policy to provide the additional leave, unless the employer can show that there is another effective accommodation that would allow the individual to perform the essential functions of her job, or that granting additional leave would cause the employer an undue hardship. The Court, however, pointed to another section of the EEOC’s guidance manual to counter Ms. Hwang’s argument, as the EEOC manual states “ . . . six months is beyond a reasonable amount of time.” In fact, the Court stated that an “inflexible” leave policy can actually help protect the rights of disabled employees rather than discriminate against them because such a policy does not permit individual requests for leave to be singled out for discriminatory treatment.

Not all leave policies will past muster, however. The Court stated that policies that provide an unreasonably short sick leave period may not provide enough accommodation for a disabled employee who would be capable of performing his or her job with just a bit more time off. Alternatively, policies that are applied inconsistently, such as where some employees are allowed more time off and others are held to a strict time limit, could be discriminatory. In this case, however, the Court found that Ms. Hwang did not allege any facts to support a claim that she was treated differently than other similarly situated employees.

Retaliation Claim Fails As Well

Ms. Hwang also asserted that she was unlawfully retaliated against for reporting disability discrimination. In particular, she based her claims on two theories : (1) the University failed to explain her COBRA health benefits before or immediately after her termination; and (2) she wasn’t hired for two other positions at the University that she applied for after losing her teaching job. The Court easily dispensed with both theories.

First, COBRA allows thirty days for an employer to provide separating employees with a COBRA notice. Consequently, the University was not required to provide Ms. Hwang with notice of her COBRA benefits before or immediately after her termination of employment. Second, although Ms. Hwang alleged that she was not hired for two other University positions for which she applied, she failed to allege any facts suggesting that the University’s decision not to hire her was because she had engaged in legally protected opposition to discrimination. She not only failed to provide facts showing that she was qualified for the two jobs, but she also failed to offer facts suggesting that the University officials who decided not to hire her knew about her disability and her complaint about disability discrimination. Without such allegations, the Court ruled that Ms. Hwang’s retaliation claim failed.

ADA Application

Although this case alleged a violation of the Rehabilitation Act, courts typically analyze such claims similarly to those alleging a violation of the Americans With Disabilities Act (ADA). Consequently, this case may prove helpful to employers defending ADA claims where the employer denies an employee’s request for an extended leave of absence. Employers should heed the Court’s warning about leave policies that may be discriminatory if they provide an unreasonably short leave or are inconsistently applied. However, lengthy leaves of six months or more, or leaves of an unlimited duration in which the disabled employee provides no work, will likely not be considered a reasonable accommodation.

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May 9, 2014

Colorado Legislative Wrap-Up: Wage Theft, Disability Definition and Workers’ Comp Physician Choice Bills Pass

By Emily Hobbs-Wright

The Colorado General Assembly wrapped up its 2014 Legislative Session this week, passing a number of bills that change the landscape for Colorado employers. Here is a look at the significant employment-related bills that passed and are expected to be signed into law by Governor Hickenlooper as well as other bills that were introduced but did not make it through the legislative process.

Bills that Passed This Session.

Wage Protection Act of 2014. Senate Bill 14-005 establishes an administrative procedure to adjudicate wage claims under Colorado law. For wages and compensation earned on or after January 1, 2015, the Colorado Division of Labor may receive complaints and adjudicate claims for nonpayment of wages or compensation of $7,500 or less. The written demand for unpaid wages to the employer may come from or on behalf of the employee and is satisfied if a notice of complaint filed with the Division is sent to the employer. In addition to existing fines that may be levied against employers who fail to pay wages, the new law allows the Director of the Division of Labor or a hearing officer to impose a fine of $250 on an employer who fails to respond to a notice of complaint or any other notice from the Division when a response is required. All fines collected will be credited to the State Wage Theft Enforcement Fund to be used for enforcement of this law.

The Wage Protection Act also requires Colorado employers to keep payroll records, including the information contained in an employee’s itemized pay statement, for at least 3 years after payment of wages and to make such records available to the employee and the Division of Labor. (C.R.S. §8-4-103 (4.5)). Employers who violate this record retention requirement are subject to a fine of $250 per employee per month, up to a maximum fine of $7,500.

This new law also provides for the recovery of reasonable attorney fees and court costs for an employee who recovers unpaid wages under Colorado’s minimum wage requirement. Additionally, the new law sets forth procedural requirements for employers responding to a demand for payment and procedures for resolving wage disputes through the administrative procedure. The majority of the new provisions in this law go into effect on January 1, 2015.

Definition of Disabled Individuals Aligned with Americans With Disabilities Act. Senate Bill 14-118 conforms state law definitions of a disability to match definitions under the federal Americans with Disabilities Act (ADA). Specifically, the terms “disability” and “qualified individual with a disability” under Colorado Revised Statute section 24-34-301 are given the same meaning as under the ADA. This bill also moves the definition of “sexual orientation” out of the Employment Practices definition section (C.R.S. § 24-34-401) and into the general definition section for the Civil Rights Division (C.R.S. § 24-34-301.) It also changes the term “assistance dog” to “service animal” and provides additional penalties for violations of the rights of an individual with a disability who uses a service animal and for persons who cause harm to service animals. The law also expanded the available remedies for retaliation and violations of the fair housing and public accommodations discrimination prohibitions. Once signed into law by the Governor, these provisions will go into effect on August 6, 2014.

Expanded Doctor Choice for Workers’ Compensation. House Bill 14-1383 changes the Colorado workers’ compensation law to allow injured workers more choice of doctors. Currently, an employer or workers’ compensation insurer must provide a list of at least 2 physicians or corporate medical providers from which an injured employee may select a treating physician. This bill expands that number to 4. There are additional provisions related to the location and shared ownership status of the health care providers. After signed into law by the Governor, this law will become effective on April 1, 2015.

Clarification of Credit Report Restriction Allowing Employment Use By Financial Institutions. Senate Bill 14-102 amends last year’s Employment Opportunity Act which restricts an employer’s use of credit reports. This amendment clarifies that all positions at a bank or financial institution are jobs for which credit information is deemed to be “substantially related to the employee’s current or potential job.” As a result, financial institutions will be able to obtain and use credit information on employees and applicants when making employment decisions for all job positions. Governor Hickenlooper signed this bill into law on March 27, 2014 and it became effective immediately.

Bills that Failed to Pass This Session.

Paid Sick Leave. Called the Family and Medical Leave Insurance Act (FAMLI), Senate Bill 14-196 sought to create an insurance program to provide pay to employees who take unpaid FMLA or sick leave. The program would be paid for by employees who pay premiums into a “fund” in the state treasury; employers would not be funding it. Eligible employees would be able to receive a percentage of their pay while on leave, not to exceed $1,000 per week. The bill would have prohibited Colorado employers from discharging, discriminating or retaliating against employees who seek to use benefits under the program or assist in a related-proceeding. Advocated by the Colorado chapter of 9 to 5, this bill, introduced on April 15th, differed from previous paid sick leave bills as it did not require employers to fund the program. On May 1, this bill was postponed indefinitely in committee and therefore, did not make it to a vote.

Drug Testing Misdemeanor. House Bill 14-1040 would have established a drug misdemeanor for an employee who is legally required to undergo drug testing as a condition of his or her job and either tests positive for a controlled substance without a prescription, or knowingly defrauds the administration of the drug test by an employer. To “defraud the administration of a drug test” is defined in the bill to include submitting a sample from someone else or a sample collected at a different time or some other conduct intended to produce a false or misleading outcome. This bill passed the House but the Senate sent it to committee where it was postponed indefinitely.

Anti-Union Bills. – House Bills 14-1087 would have prohibited collective bargaining for the state’s public employees. House Bill 14-1098 and Senate Bill 14-113 would have prohibited employers from entering into agreements to require employees to join a union. All three bills failed shortly after introduction as expected due to the democratic majority in both chambers of Colorado’s legislature.

The bills that passed in the 2014 Legislative Session reflect a continued trend at the state level to implement new or refine existing employment-related laws. We will keep you posted on any further developments.

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