Category Archives: Discrimination

October 9, 2013

Idaho Supreme Court Changes Tack and Applies McDonnell Douglas Burden Shifting Analysis at Summary Judgment Stage

Since 2008, employers defending employment claims in Idaho have faced a higher burden of proof, thanks to the Curlee v. Kootenai County Fire & Rescue decision of the Idaho Supreme Court. In that case, the Court decided that the well-known McDonnell Douglas burden shifting analysis used in employment cases did not apply at the summary judgment stage, making it more difficult for employers to get a favorable outcome without going to trial. Recently, however, the Idaho Supreme Court changed its position, deciding that the McDonnell Douglas burden shifting analysis did apply at the summary judgment stage, resolving a five-year debacle in which Idaho employers faced different burdens of proof depending on whether employment claims were litigated in state or federal court. See Hatheway v. Bd. of Regents of the Univ. of Idaho, No. 39507 (Idaho Sept. 6, 2013).

Federal Framework Applied to Age Discrimination Claim Under the Idaho Human Rights Act (IHRA)

The McDonnell Douglas burden shifting analysis has been widely used to resolve a variety of federal employment law claims since 1973. The analysis allows a plaintiff to put forth indirect evidence of discrimination to establish a prima facie case. The burden of production then shifts to the employer to articulate a legitimate, nondiscriminatory reason for the employer’s actions. If the employer provides such reason, the burden of production then swings back to the plaintiff to show that the proffered reason is in fact pretext for unlawful discrimination. At all times, the plaintiff bears the burden of persuasion, meaning the plaintiff must convince the judge or jury that his or her position is correct.

Many state courts have adopted the McDonnell Douglas burden shifting analysis when adjudicating employment claims brought under analogous state laws. In Curlee, the Idaho Supreme Court appeared to adopt the McDonnell Douglas analysis, but went on to rule that the analysis explicitly governed the burden of persuasion at tria, and did not apply at the summary judgment stage.

The Hatheway decision appears to change that. Without specifically mentioning or overruling its Curlee decision, the Court applied the McDonnell Douglas burden shifting analysis at the summary judgment stage of Hatheway’s IHRA discrimination claims against the University of Idaho. The Court reiterated that federal law guides the interpretation of the IHRA and applied the same degree of proof and standards to an IHRA age discrimination claim as is used to analyze discrimination claims under the federal Age Discrimination in Employment Act.

Why Employers Should Care

If this all sounds like legal mumbo-jumbo, let’s put it in practical, real-life terms. Employers want to get employment claims dismissed at the earliest possible stage for numerous reasons, including avoiding expensive litigation, disruption to their operations and unfavorable publicity. Following the 2008 Curlee decision, Idaho employers had to prove more of their case early on, making it difficult to get a favorable judgment prior to trial. This prolonged meritless cases and cost employers more in legal fees and litigation-related expenses. Now, with the application of the traditional burden shifting analysis at the summary judgment stage, employers facing employment claims in Idaho state courts will have a better chance of getting employment claims dismissed earlier in the legal process with fewer cases proceeding to trial.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

October 4, 2013

EEOC’s Religious Accommodation Claim Fails Despite Retailer’s Assumption that a Female Job Applicant Wore a Headscarf for Religious Reasons

By John M. Husband

Does an employer have to engage in an interactive discussion about reasonably accommodating the wearing of a headscarf (i.e., hijab) in contravention of its dress code simply because a job applicant wears a headscarf to the job interview? No, according to a recent decision by the Tenth Circuit Court of Appeals. The Court ruled that to establish a religious accommodation claim under Title VII, the plaintiff must establish that he/she informed the employer that he/she adheres to a particular practice for religious reasons and that the plaintiff needs an accommodation for that practice, due to a conflict between the practice and the employer’s neutral work rule. EEOC v. Abercrombie & Fitch Stores, Inc., No. 11-5110 (10th Cir. October 1, 2013).

In the Abercrombie case, an assistant manager named Heather Cooke interviewed Samantha Elauf, a seventeen-year old applicant for an in-store sales position. Ms. Elauf wore a headscarf to the interview. Though they did not discuss religion, Ms. Cooke assumed that Ms. Elauf was Muslim and that her Muslim religion was the reason she wore a headscarf. During the interview, Ms. Cooke described some of the dress requirements expected of Abercrombie employees but neither she nor Ms. Elauf specifically referred to or discussed the wearing of a headscarf. After the interview, Ms. Cooke believed Ms. Elauf was a good candidate for the job but was unsure whether it would be a problem for her to wear a headscarf since Abercrombie has a strict “Look Policy” that forbids wearing of “caps” and black clothing. Ms. Cooke consulted with her district manager who rejected Ms. Elauf for hire because she wore a headscarf which was inconsistent with the Look Policy.

EEOC Files Lawsuit Alleging Retailer Failed to Accommodate Applicant’s Religious Practice

In 2009, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit in federal court in Oklahoma alleging that Abercrombie violated Title VII by refusing to hire Ms. Elauf because she wore a headscarf and failing to accommodate her religious beliefs because it failed to make an exception to its Look Policy. The Oklahoma court ruled in favor of the EEOC on summary judgment, reasoning that Abercrombie had enough information to make it aware that there was a conflict between the applicant’s religious practice and its Look Policy that would require an accommodation. It emphasized that Abercrombie had made numerous exceptions to its Look Policy over the past decade or so, including eight or nine headscarf exceptions. The parties went to trial on the issue of damages where a jury awarded the EEOC $20,000 in compensatory damages.

Religious Accommodation Claim Requires Plaintiff to Inform Employer of Conflict between Religious Practice and Employer Policy

On appeal to the Tenth Circuit, Abercrombie argued that it was entitled to summary judgment because there was no dispute that Ms. Elauf never informed the company that her practice of wearing a headscarf was based on her religious beliefs and that she would need an accommodation for the practice based on the conflict between it and the Look Policy. A divided Tenth Circuit agreed. Two of the three judges on the panel ruled that the plaintiff in a religious accommodation case must establish that he or she informedthe employer of his/her religious belief that contradicts with an employment requirement and the plaintiff must request an accommodation. Because Ms. Elauf never informed Abercrombie that she wore a headscarf for religious reasons and never requested an exception from the dress code, the court reversed the grant of summary judgment to the EEOC and vacated the jury award with instructions to enter judgment in favor of Abercrombie. The majority stated that it is only after an employer is put on notice of the need for a religious accommodation that it must actively engage in a dialogue with applicants or employees concerning their conflicting religious practices and possible accommodations.

Dissenting Opinion and Conflicting Circuit Court Decisions Set Up Possible Appeal to Supreme Court

The dissenting judge strongly disagreed with his two colleagues on the panel, believing that Abercrombie should not be permitted to avoid discussing reasonable accommodations for Ms. Elauf’s religious practice when it knew that she wore a headscarf, assumed she was Muslim and wore the headscarf for religious reasons and knew that its Look Policy prohibited its sales models from wearing headwear. The dissent noted that Ms. Elauf could not inform Abercrombie of a conflict between her religious practice and its dress code because she did not know the details of the Look Policy or that headwear, including a headscarf, was prohibited. The dissenting judge would have sent the entire matter to a jury to decide if Abercrombie was liable for religious discrimination.

The dissenting opinion points out that other circuit courts of appeal have held that a job applicant or employee can establish a religious failure-to-accommodate claim if he/she can show that the employer knew of a conflict between the plaintiff’s religious beliefs and a job requirement, regardless of how the employer acquired knowledge of that conflict. Unlike the Tenth Circuit, these other circuits do not require that the plaintiff actually inform the employer of the conflict. The stage is set for the EEOC to ask the U.S. Supreme Court to resolve the disagreement between the courts to ultimately decide whether a plaintiff must actually inform the employer of the conflict between his/her religious practice and a job requirement before the duty to discuss reasonable accommodations kicks in.

Employer Lessons

This opinion is favorable for employers in the states within the Tenth Circuit’s jurisdiction, namely Colorado, Oklahoma, Kansas, Utah, Wyoming and New Mexico. That said, employers should always be cautious about making adverse employment decisions when it has knowledge or information that relates to an applicant/employee’s religious beliefs or practices.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

September 3, 2013

OFCCP Announces New Veterans and Disability Regulations for Contractors

By Brad Cave

Last week, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced Final Rules that are intended to improve job opportunities for disabled workers and veterans. Whether the rules will accomplish that purpose is uncertain; what is clear is that the new rules greatly increase affirmative action requirements and burdens on federal contractors. Under the new regulations, federal contractors and subcontractors face significantly increased documentation, data collection, recordkeeping and hiring goals.

Key Provisions of New Disability and Veterans Regulations

On August 27, 2013, OFCCP released the content of its Final Rules that change the regulations implementing Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act as amended by the Jobs for Veterans Act of 2002 (VEVRAA). Section 503 of the Rehabilitation Act of 1973 prohibits discrimination in employment decisions against individuals with disabilities and requires federal contractors and subcontractors to take affirmative action to recruit, hire, promote and retain disabled workers. VEVRAA prohibits federal contractors and subcontractors from discriminating against protected veterans and requires affirmative action in employing these veterans. The key provisions of the Final Rules that change the regulations implementing these laws include:

A 7% Utilization Goal for Qualified Individuals with a Disability. For the first time, contractors must strive to employ disabled workers at a level that reaches 7% of each job group. For contractors with 100 or fewer employees, the 7% goal applies to the contractor’s entire workforce, rather than each job group. OFCCP states that this is not a quota and failure to meet the disability utilization goal will not, by itself, constitute a violation of the regulation. However, OFCCP requires contractors to conduct an annual utilization analysis to find deficient areas and determine specific actions to rectify identified problems.

Establishing Hiring Benchmarks for Veterans. Without setting a specific utilization goal for hiring veterans, OFCCP will require federal contractors to establish hiring benchmarks each year for protected veterans. Contractors may choose to use the national percentage of veterans in the civilian labor force, as updated annually by OFCCP (currently 8%), as a benchmark, or may establish their own benchmark using a combination of data from the Bureau of Labor Statistics, Veterans’ Employment and Training Service and the contractor’s unique hiring circumstances.

Collect and Retain Comparison Data on Disabled and Veteran Applicants and Employees. Under the Final Rules, contractors must document quantitative comparisons of the number of disabled workers and veterans who applied for jobs and the number hired. The data must be compiled annually and retained by the contractor for three years in order to track trends and measure outreach efforts.

Ask Applicants and Employees to Self-Identify as Individuals with a Disability and as a Veteran. The Final Rules mandate that employers invite applicants at both the pre-offer and post-offer stage to self-identify themselves as individuals with a disability and as veterans. The Final Rules further require that contractors invite their current employees to self-identify at least every five years. OFCCP offers sample self-identification language.

Mandated Equal Opportunity Clause in Subcontracts. Under the Final Rules, contractors must include specific language to incorporate the equal opportunity clause into subcontracts so that subcontractors know their responsibilities as federal contractors.

Provide OFCCP Access to Records. The Final Rules specify that contractors must allow OFCCP to review documents related to a focused review or compliance check either on-site or off-site, at OFCCP’s option. OFCCP can request that contractors reveal all formats in which they maintain records and then request the records in whatever format OFCCP chooses.

Updates to Comply with the ADAAA. The Final Rule related to the disability regulations updates the regulations in light of the revised definition of “disability” and certain nondiscrimination provisions under the ADA Amendments Act of 2008 (ADAAA).

Still Burdensome, But Some Proposals Slightly Watered Down

Federal contractors were critical of the many regulatory changes first proposed by the OFCCP in 2011. OFCCP received many comments in response to the proposed rules and made some modest improvements based on those comments. For example, the proposed rules sought to impose a five-year recordkeeping requirement. The Final Rules reduced that requirement to three years. The proposed disabilities rule sought to require contractors to review their physical and mental job qualifications on an annual basis while the Final Rule allows contractors to establish their own schedule for reviewing job qualifications. Despite these and other small revisions from the proposed to the final regulations, the Final Rules add significant burdens on contractors who must revamp their employment policies and documentation practices to comply with the new regulations.

So, Are You Sure You’re Not Disabled?

The new hiring quota for disabled individuals places employers in a very awkward position. For the first time, employers are required to ask and need to know whether applicants and employees consider themselves to be disabled. Under these rules, employers are expected to meet the 7% “goal” by workgroup. But some employees who meet the definition of disabled will not consider themselves to be disabled or be reluctant to disclose their status to their employer. The OFCCP recognized that a study has shown that only about 50% of those with disabilities are likely to self-identify. The OFCCP is not concerned about this high degree of inaccuracy. According to its preamble to the new rules, even inaccurate data which greatly underreports the number of disabled applicants and employees will still assist the contractor and the OFCCP to evaluate the contractor’s hiring and selection process! Stated differently, the OFCCP does not care if the data is faulty by as much as 50% as long as it has some data on which to base its enforcement decisions.

The OFCCP also suggested that employers should designate individuals as disabled, even if they decline to self-identify, where the disability is obvious or the employer knows about the disability. Of course, for years we have cautioned employers to never label an employee as disabled to avoid “regarded as” claims under the ADA. Now, employers who are federal contractors will have an incentive to identify employees as disabled to meet the goal, and have the OFCCP’s permission to do so. In an interesting twist, the OFCCP’s permission for employers to designate employees as disabled was explained in the preamble to the new rule, not in the new regulations. Since the preamble does not have the force and effect of law, the OFCCP’s permission is not likely to have much value as a defense to an employee’s allegation that the employer regarded them as disabled when the employer designates the employee for purposes of complying with this rule. While federal contractors may have little choice if a disabled employee declines to self-identify, it will continue to be very important for employers to keep all such designations strictly confidential and out of the hands of supervisors and managers.

Effective Date of the Disability and Veterans Affirmative Action Final Rules

The Final Rules become effective 180 days after they are officially published in the Federal Register which is expected to occur in the next two weeks. Consequently, contractors have about six months to get policies and procedures in place to comply with the new regulations. Contractors subject to written affirmative action plan requirements are allowed to continue with the plan they have in place on the effective date of the Final Rules. However, the next cycle of their affirmative action plan must be drafted to comply with the new regulations.

OFCCP will be hosting webinars on the new regulations. Information about the webinars and the Final Rules may be found on the OFCCP website: http://www.dol.gov/ofccp/.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

August 29, 2013

DOJ Will Not Challenge State Marijuana Legalization Laws – New Federal Enforcement Policy Unlikely to Affect Colorado Employers

By Emily Hobbs-Wright

On August 29, 2013, the U.S. Department of Justice (DOJ) announced that it will not challenge the state ballot initiatives in Colorado and Washington that legalize the possession and use of small amounts of marijuana under state law. The DOJ makes clear, however, that marijuana remains an illegal drug under the federal Controlled Substances Act. This clarification means Colorado employers may still enforce their drug-free workplace policies and take appropriate action when an employee or applicant tests positive for marijuana.

DOJ Expects States to Enforce Strict Regulatory Schemes

In its August 29, 2013 Guidance Regarding Marijuana Enforcement, the DOJ identifies eight enforcement priorities for federal law enforcement and prosecutors, such as preventing distribution of marijuana to minors, preventing the diversion of marijuana from states where it is legal to other states, and preventing drugged driving and the exacerbation of other public health consequences of marijuana use. The DOJ states that it expects that states and local governments to not only establish, but also enforce robust controls in their marijuana regulatory schemes to meet its federal objectives. The guidance instructs federal prosecutors to review marijuana cases on an individual basis, weighing all available information and evidence but to no longer “consider the size or commercial nature of a marijuana operation alone as a proxy for assessing whether marijuana trafficking implicates the Department’s enforcement priorities . . .” The DOJ further stated that if states fail to develop or enforce a strict regulatory scheme and the stated harms result, federal prosecutors will step in to enforce federal marijuana priorities and may challenge the regulatory schemes in those states.

Courts in Colorado Uphold Employer Terminations for Employee Marijuana Use

In April 2013, the Colorado Court of Appeals ruled that terminating an employee who tested positive for marijuana following his off-duty, off-premises use of medical marijuana did not violate Colorado’s lawful activities statute. Coats v. Dish Network LLC, 2013 COA 62. Brandon Coats, a quadriplegic who obtained a license to use medical marijuana under Colorado’s Amendment 20, was fired for violating his employer’s drug policy after testing positive for marijuana. Coats asserted that he never used marijuana on his employer’s premises, was never under the influence of marijuana at work and never used marijuana outside the limits of his medical marijuana license. He sued his employer, Dish Network, alleging that his termination violated Colorado’s lawful off-duty activities statute, CRS § 24-34-402.5(1), which prohibits an employer from discharging an employee for engaging in “any lawful activity off the premises of the employer during nonworking hours.”

The Coats court looked to the plain meaning of the term “lawful” in the statute and decided that “for an activity to be ‘lawful’ in Colorado, it must be permitted by, and not contrary to, both state and federal law.” Because marijuana was, and remains, illegal under federal law, the court held that marijuana use is not a “lawful activity” under the Colorado lawful activities statute and therefore, the employer did not violate the statute when it terminated him for testing positive for marijuana.

Earlier this week, the federal district court in Colorado ruled that enforcement of a drug-free workplace policy is a lawful basis for an employer’s decision to terminate an employee who tests positive for marijuana, whether from medical or any other use. Curry v. MillerCoors, Inc., No. 12-cv-2471 (Order Granting Motion to Dismiss, D.Colo. Aug. 21, 2013). In granting the employer’s motion to dismiss, the federal court rejected all of the former employee’s claims related to his medical use of marijuana that resulted in a positive drug test and his termination under the employer’s drug policy. Significantly, the court dismissed his disability discrimination claim under Colorado’s anti-discrimination statute as a matter of law, finding that it was lawful for the employer to discharge the employee under its drug-free workplace policy despite the employee’s allegation that he was terminated because of using medical marijuana to treat disabling medical conditions. Judge John L. Kane wrote “anti-discrimination law does not extend so far as to shield a disabled employee from the implementation of his employer’s standard policies against employee misconduct.” In dismissing the employee’s claim for violation of Colorado’s lawful activities statute, Judge Kane relied on the Coats decision and similarly ruled that because marijuana use is illegal under federal law, the employee’s medical marijuana use was not a “lawful activity” under the statute.

DOJ’s Announcement Should Not Change Workplace Decisions

The DOJ’s announcement of relaxed marijuana enforcement in states that have legalized marijuana does not alter employers’ ability to enforce their drug-free workplace policies. On the contrary, because the DOJ reinforced that marijuana remains an illegal drug under federal law, the analysis used by courts in Colorado to uphold termination decisions based on positive drug tests should continue to apply. Employers should create or revise their drug policies to state that use of any drug that is illegal under state or federal law will violate the policy. Employers then should enforce their policies in a consistent and uniform manner, regardless of the legalization of marijuana use in Colorado.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

August 12, 2013

EEOC Slapped with Order to Pay $4.6 Million for Pursuing Unreasonable and Groundless Discrimination Claims

By Mark Wiletsky

When a former employee sues for discrimination or retaliation, the employer generally is unable to recover its fees or costs for defending the lawsuit, even if the employer prevails. That was not the case, however, in a recent class action brought by the agency tasked with enforcing federal anti-discrimination laws, the Equal Employment Opportunity Commission (EEOC). A federal court recently slammed the EEOC with over $4.6 million in attorneys’ fees, costs and out-of-pocket expenses after finding that the EEOC’s pattern or practice class action claim and 153 of the individual discrimination claims were unreasonable or groundless. EEOC v. CRST Van Expedited, Inc., No. 07cv95 (N.D. Iowa, August 1, 2013).

EEOC Sued Employer Alleging Sexual Harassment

In September 2007, the EEOC filed a lawsuit against trucking company, CRST Van Expedited, Inc. (CRST) alleging that the company’s lead drivers and team drivers subjected female employees to sexual harassment and created a sexually hostile environment in violation of Title VII. The EEOC filed its action on behalf of employee Monika Starke and a class of similarly situated female employees.

After almost a year of discovery in the case, the EEOC was pressed to identify the total number of harmed individuals making up the purported class. In October 2008, the EEOC identified 270 allegedly aggrieved female employees. When the EEOC failed to make all of the individuals available for deposition by a court-ordered deadline, the District Court barred the EEOC from pursuing claims on behalf of those 99 individuals who were not deposed.

CRST filed multiple motions for summary judgment to get the remaining claims dismissed before trial. First, CRST succeeded in getting the EEOC’s pattern or practice claim dismissed, which meant that the EEOC was left to pursue harassment claims only on behalf of individual employees. CRST then hammered away at all of the individual claims and succeeded in getting them all dismissed for a multitude of reasons, ranging from lack of evidence that some individuals had suffered severe or pervasive harassment to some individuals not reporting any harassment to the company. Significantly, the Court dismissed 67 of the individual claims because the EEOC had failed to exhaust administrative prerequisites by failing to investigate or attempt conciliation of the claims. Having dismissed all claims against CRST, the District Court found that CRST was the prevailing party and was entitled to recover its attorneys’ fees and costs, which exceeded $4.5 million.

EEOC Appeals and Keeps Two Claims Alive

The EEOC appealed the dismissal of 107 of the claims to the Eighth Circuit Court of Appeals. The Eighth Circuit reversed the dismissal of the claims on behalf of two female employees and consequently found that CRST was no longer the prevailing party entitled to recover its attorneys’ fees and costs. The case was sent back to the District Court for continuation of those two claims.

District Court Awards Millions in Attorneys’ Fees, Costs and Expenses

After the case was sent back to the District Court, the EEOC voluntarily dismissed one of the two remaining claims because it had failed to exhaust the administrative prerequisites as to her claim. CRST agreed to settle the remaining claim for $50,000 and the parties asked the Court to dismiss the case in its entirety as a result of the settlement. CRST then asked to recover its attorneys’ fees, costs and expenses for the claims on which it prevailed.

In order to recover its attorneys’ fees, costs and expenses, CRST needed to show that it was the prevailing party for purposes of Title VII and that the EEOC’s claims were frivolous, unreasonable, or without foundation. The Court ruled that CRST was the prevailing party on the EEOC’s pattern or practice claim and on 153 of the EEOC’s individual claims. CRST was not the prevailing party, however, for the claim it settled, for the three claims withdrawn by the EEOC and for 98 claims that the Court dismissed as a discovery sanction against the EEOC. The Court then ruled that the EEOC’s failure to exhaust Title VII administrative prerequisites of investigation and conciliation for 67 of the individual claims was unreasonable. It further ruled that the EEOC’s pattern or practice claim was unreasonable as it was based only on anecdotal evidence. In total, the Court found that 153 of the individual claims as well as the pattern or practice claim were unreasonable or groundless.

After discounting the total amount of CRST’s attorneys’ fees, costs and out-of-pocket expenses to reflect those claims for which CRST was not the prevailing party, the Court ordered the EEOC to pay CRST $4,694,442. This award represented $4,189,296 in CRST’s attorneys’ fees, $91,758 in costs and $413,387 in out-of-pocket expenses for expert witness fees, travel expenses, delivery fees, and similar expenses.

While the EEOC performs an important function and pursues meritorious cases, the case against CRST shows that employers can and should fight back when the EEOC brings a frivolous case. Significantly, this is not the first time a court has awarded fees against the EEOC or rejected its claims. Last year, the Tenth Circuit (which covers Colorado) slapped the EEOC with attorneys’ fees and costs in EEOC v. TriCore Reference Laboratories, No. 11-CV-2096 (10th Cir. 2012), affirmed summary judgment against the EEOC in EEOC v. The Picture People, Inc., No. 11-CV-1306 (10th Cir. 2012), and the court affirmed a district court’s decision that the EEOC’s administrative subpoena was overbroad in EEOC v. Burlington Northern Santa Fe Railroad. We also recently discussed a letter sent by nine state Attorney Generals, in which they criticized the EEOC’s lawsuits and position concerning employers’ ability to use background checks to screen employees with a criminal record. Hopefully, these losses, fee awards, and criticisms will cause the EEOC to more thoroughly evaluate which cases have merit before subjecting employers to the high cost and aggravation of defending meritless claims.

July 29, 2013

The Battle Over Background Checks Continues — State AGs Accuse EEOC of “Gross Federal Overreach”

By Mark Wiletsky

Is it discriminatory if an employer does not hire anyone with a particular criminal conviction, regardless of that person’s race, gender, religion, or other protected characteristic? According to the EEOC’s April 2012 Enforcement Guidance, it might be. But in a July 24, 2013 letter sent to EEOC Commissioner Jacqueline Berrien and the four EEOC Board Members, nine state Attorneys’ General (AGs) disagree. The AGs chastise the EEOC for filing recent lawsuits against BMW Manufacturing Co., LLC and Dolgencorp (Dollar General), in which the EEOC alleges that these employers violated Title VII’s disparate impact prohibition by using a bright-line screening policy that rejected all individuals with past convictions in certain categories of crimes, such as murder, assault, reckless driving and possession of drug paraphernalia.

The letter then criticizes the EEOC’s April 2012 Enforcement Guidance on Arrest and Conviction Records, stating that the EEOC’s policy guidance incorrectly applies the law and constitutes an unlawful expansion of Title VII. The AGs argue that if Congress wishes to protect former criminals from employment discrimination, it can amend the law, but it is not the EEOC’s role to expand the protections of Title VII under the guise of preventing racial discrimination.

The Republican state AGs from Colorado, Montana, Utah, Kansas, Nebraska, West Virginia, Alabama, South Carolina and Georgia joined in this missive to say “enough is enough” on the EEOC’s background check lawsuits. Citing the burden on businesses to undertake more individualized assessments of an applicant’s criminal history, the AGs urge the EEOC to rescind its April 2012 Enforcement Guidance and dismiss the lawsuits against Dollar General and BMW. Not likely, but it may get the attention of federal lawmakers who may try to rein in the EEOC’s position on this issue.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

July 22, 2013

Myriad of Social Media Privacy Laws Create Havoc for Multi-State Employers

By Elizabeth Dunning

Does your company request that your employees and applicants provide user names and passwords to their personal social media accounts? Do you require applicants to log onto their online accounts in your presence so that you can view their content? Perhaps you ask employees to “friend” their supervisors. If you haven’t followed new developments in state employment laws, you may not realize that such activities are unlawful in some states. In just two years, eleven states have passed social media privacy laws that prevent employers from accessing employees’ and applicants’ personal online accounts. Each state law differs in certain respects, making it difficult for multi-state employers to adopt a uniform and consistent social media policy. To help sort things out, we highlight here the primary differences in the state social media privacy laws.

States with Workplace Social Media or Internet Privacy Laws

The eleven states that have enacted social media or internet privacy laws affecting employers to-date are: Arkansas, California, Colorado, Illinois, Maryland, Michigan, Nevada, New Mexico, Oregon, Utah and Washington. All but one of these states protect the access information for both current and prospective employees, with New Mexico only protecting the log-in information of applicants.

Differences in State Social Media Laws

Generally, all of these states prohibit an employer from requesting or requiring an employee or applicant to disclose his or her user name, password or other means of accessing his or her personal social media accounts. Many of these states also make it unlawful to discipline, discharge, discriminate against or penalize an employee, or fail to hire an applicant who refuses to disclose his or her access information to personal social media accounts. However, that’s where the uniformity in the laws generally ends. The following chart highlights numerous key differences between the state laws.

Legal Provision	States Recognizing Provision
Prohibits employers from requesting that employee add employer representative or another employee to his or her list of contacts (e.g., “friend”)	Arkansas, Colorado, Oregon and Washington
Prohibits employers from requesting employee to access his or her personal social media account in the presence of the employer (“shoulder surfing”)	California, Michigan, Oregon and Washington
Prohibits employers from requesting employee to change the privacy settings on his or her personal social media accounts	Arkansas, Colorado and Washington
Specifically permits employers to view and access social media accounts that are publicly available	Arkansas, Illinois, Michigan, New Mexico, Oregon and Utah
Exception when access required to comply with laws or regulations of self-regulatory organizations	Arkansas, Nevada, Oregon and Washington
Exception for investigations of employee violation of law or employee misconduct	Arkansas, California, Michigan, Oregon, Utah and Washington (Colorado and Maryland limit this exception to investigation of securities or financial law compliance)
Exception for investigation of unauthorized downloading of employer’s proprietary, confidential or financial data	Colorado, Maryland, Michigan, Utah and Washington
Inadvertent acquisition of personal log-in information while monitoring employer systems not a violation but employer not permitted to use the log-in information to access personal social media accounts	Arkansas, Oregon and Washington

As you can see, the differences in the laws exceed the similarities, making it difficult for an employer operating in more than one covered state to comply with all applicable provisions. Even the definition of covered social media accounts varies by state, creating even more inconsistencies.

Would a Federal Law Help?

With eleven laws in place and almost 20 additional states considering social media privacy bills, the issue seems ripe for a federal bill that would bring some uniformity to the protections offered to employees and applicants. In February 2013, the Social Networking Online Protection Act, which offers such workplace protections, was introduced into the U.S. House of Representatives. Unfortunately, it has languished in committee and is not expected to pass. In addition, a federal law on the issue will likely only simplify the web of state laws if it specifically preempts state law. Without federal preemption, we might face two sources of law on the issue, federal and state, which might muddy the waters even more. In any event, it does not appear that a federal law will be enacted before additional states enact their own laws, leaving employers to struggle with the variances in state law.

Best Practices for Complying with Social Media Privacy Laws

With the vast amount of information available on social media and the increased use of social networking platforms for business purposes, it is likely that most employers will at some point need to access or review content on an employee’s or applicant’s social media account. Perhaps it will be for an investigation of an employee who downloaded proprietary information or perhaps it will be to confirm derogatory statements about the company made by an employee. Whatever the reason, the first step is to recognize that these laws exist and you will need to review which, if any, apply to your company and/or the employee involved. Remember that you are generally free to access publicly available social media content. However, if one of these state laws applies, consult with legal counsel before accessing (or requesting access to) any personal social media accounts to determine what restrictions and exceptions are applicable to your particular circumstances.

Establish a social media policy specifying that employees are not permitted to disclose or post proprietary or confidential company information on their personal social media accounts. Make a clear delineation between company/business-related social media accounts where you control who speaks on behalf of your organization, and personal accounts where employees do not represent the views of the company. Be careful that your social media policy does not run afoul of the National Labor Relations Act by interfering with employees’ right to discuss their wages and working conditions in a concerted manner. Communicate your policy to your employees through normal channels, such as your employee handbook, online policy/intranet, etc.

Train your supervisors, managers and human resources staff on these laws. Sometimes supervisors or HR folks think it is acceptable to ask an employee to “friend” them online, or to ask for their log-in information to view pictures or other benign posts. Despite good intentions, company representatives could get you into legal trouble so advise them of these laws and your restrictions on requesting access to personal social media accounts.

July 1, 2013

Affirmative Action by State University Requires Strict Scrutiny and No Workable Race-Neutral Alternatives

By Jude Biggs

In a highly anticipated opinion regarding the future of affirmative action, the U.S. Supreme Court ruled that to avoid violating the Equal Protection Clause, the University of Texas’ consideration of race in its admissions process must meet a strict scrutiny standard where its affirmative action efforts are narrowly tailored to meet its diversity goal. Fisher v. University of Texas at Austin, No. 11-345 (U.S. June 24, 2013). Because the Fifth Circuit Court of Appeals gave the University substantial deference in deciding whether its affirmative action plan was narrowly tailored to meet its stated goal, the Supreme Court vacated the lower court’s decision in favor of the University and sent the case back to the lower court with instructions to apply the tougher strict scrutiny standard.

Rejected Caucasian Applicant Alleges School Violated Constitution by Considering Race

In 2008, Fisher applied for admission to the University of Texas at Austin. Fisher, who is white, was denied admission. For years, the University had considered race as one of various factors in its undergraduate admissions process. Under the affirmative action plan in place when Fisher applied, the University remained committed to increasing racial minority enrollment on campus but did not assign a numerical value based on race for each applicant. Instead, the University included an applicant’s race as one of numerous components that made up the applicant’s Personal Achievement Index. When Fisher was rejected, she sued the University and various school officials alleging that the University violated the U.S. Constitution’s Equal Protection Clause by considering race.

Affirmative Action Survives, But Is Narrowed

The federal district court and the Fifth Circuit appellate court upheld the University’s admissions plan. The Fifth Circuit, however, gave substantial deference to the University, both in the definition of its compelling interest in creating diversity in its student body and in deciding whether its affirmative action plan was narrowly tailored to meet its goal. When the Supreme Court agreed to hear this case, supporters of affirmative action worried that the more conservative court would rule that consideration of race under affirmative action programs was unconstitutional.

The Fisher decision, however, does not actually decide the constitutionality issue but instead defines the standard by which courts must evaluate a program that considers race as a factor. The Court explained that the University must meet the demanding burden of strict scrutiny and remanded the case to the Fifth Circuit to analyze whether the University has offered sufficient evidence to prove that its admissions policy meets that scrutiny. The Court stated that “the reviewing court must ultimately be satisfied that no workable race-neutral alternatives would produce the educational benefits of diversity.”

Justice Thomas: “Use of Race is Categorically Prohibited”

Justice Clarence Thomas joined in the majority’s decision, agreeing that strict scrutiny should apply to the University’s use of race in its admission program. Writing a separate concurring opinion, however, he went further, stating that he would hold that a state’s use of race in higher education admissions decisions is categorically prohibited by the Equal Protection Clause. Justice Thomas would overrule the 2003 Supreme Court decision in Grutter v. Bollinger, which upheld the use of race as one of many “plus factors” in an admissions program, and abolish the use of race as a factor in affording educational opportunities. He finds that there is no compelling interest that could justify what he calls racial discrimination. He states that there is no doubt that the University’s discrimination injures white and Asian applicants who are denied admission because of their race, but he also believes that those who are admitted under the “discriminatory admissions program” suffer even more harm, stamping them with a “badge of inferiority.”

Justice Thomas’ views differ from those of retired Justice Sandra Day O’Connor, who wrote in 2003 in Grutter, that “classroom discussion is livelier, more spirited, and simply more enlightening and interesting” when students are exposed to the “greatest possible variety of backgrounds.” Justice O’Connor also stated that the Court expected that after 25 more years, the use of racial preferences would no longer be needed. Today, some might say American universities have reached the point when affirmative action is no longer needed; others, however, do not believe the United States has achieved the promise of true equality.

Whether Justice Thomas’ view is adopted or whether Justice O’Connor’s views remain in force in the future – at least for awhile – remains to be seen.

Will Fisher Be Revisited Again?

The Fifth Circuit now must apply the strict scrutiny standard to the evidence provided by the University of Texas to determine whether its consideration of race meets Equal Protection muster. No matter the outcome, it is likely the “losing” party will seek review of that decision by the U.S. Supreme Court. We know how Justice Thomas will rule, but the question remains, will enough other justices join him to throw out any consideration of race in state affirmative action programs?

Private Employers Not Bound by This Decision

Because the Equal Protection clause applies only to state actors (providing that no state shall deny to any person the equal protection of the laws), the analysis of whether an affirmative action program violates the Equal Protection clause does not apply to private companies or organizations. That said, there could be a spillover effect. Generally, discrimination in the workplace is governed by Title VII and analogous state laws. It is unclear whether individuals who feel they have suffered reverse discrimination by a private employer’s affirmative action or diversity efforts will leverage the narrowing scope of affirmative action in the public sector. It is likely private sector litigants will point to Justice Thomas’ concurring opinion to try to abolish any consideration of race in the employment context as discriminatory, and others will point to Justice O’Connor’s rationale for affirmative action. So stayed tuned!

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

June 26, 2013

Employers Benefit From Supreme Court Ruling On Title VII Retaliation Claims

By Jude Biggs

In a favorable ruling for employers, on June 24 the U.S. Supreme Court held that a retaliation claim under Title VII of the Civil Rights Act of 1964 requires an employee to show the employer’s desire to retaliate was the “but-for” cause of the challenged employment action. University of Texas Southwestern Medical Center v. Nassar, No. 12-484 (U.S. June 24, 2013). This establishes a different causation standard for retaliation claims than is required for underlying Title VII discrimination claims, which only require an employee to show the motive to discriminate was one of the employer’s motives in making an adverse decision. Although cumbersome to have two standards, the decision is good news for employers, as often a jury will not find any discrimination by an employer, but may find retaliation after an employee speaks up about alleged discrimination. Making it more difficult to prevail on a retaliation claim will, hopefully, encourage plaintiffs to bring fewer cases or resolve them earlier than going through an expensive trial.

Employee Must Prove Employer Would Not Have Taken Action But For an Improper Motive

In a 5-4 decision, the Supreme Court ruled a plaintiff making a retaliation claim under Title VII must establish that the employer would not have taken the alleged adverse employment action but for the plaintiff having engaged in protected activity. Protected activity that may trigger a retaliation claim includes the employee opposing, complaining of or participating in a proceeding about unlawful discrimination in the workplace. Through this ruling, the Court instructs that retaliation claims should fail if an employer had other reasons or motivations – singly or together — that caused the employer to take the adverse action (even if one other factor was retaliatory in nature). In less legal terms, the employer wins if it can show its non-retaliatory reasons caused it to make the decision, even if a small portion of the decision was based on retaliation against the employee for engaging in protected conduct.

Justice Kennedy, writing for the majority which included Justices Roberts, Scalia, Thomas and Alito, stated that the text of Title VII’s anti-retaliation provision appears in a different section of the law from the provision that prohibits discrimination based on race, color, religion, sex or national origin. When Congress inserted the less rigorous “motivating factor” standard for discrimination cases in 1991, it could have inserted that standard into the anti-retaliation provision. In choosing to omit it, Congress deliberately concluded that retaliation claims are to be treated differently and retaliation is unlawful only when the employer takes adverse action against an employee “because” of their protected activity. The Court pointed to its interpretation of the Age Discrimination in Employment Act of 1967 in Gross v. FBL Financial Services, Inc. to require “but for” causation for retaliation claims.

The Court also stated that this causation standard is essential to the fair and responsible allocation of judicial resources. Recognizing that retaliation claims have been on the rise, the Court recognized that lessening the causation standard could contribute to the filing of frivolous claims, diverting resources from employers, agencies and courts in other efforts to fight workplace harassment.

Dissent Urges Congressional Action

Justices Ginsburg, Breyer, Sotomayor and Kagan dissented, alleging that fear of retaliation is the leading reason why employees do not speak up about discrimination in the workplace. Because Title VII plaintiffs often have been subjected to both discrimination and retaliation, they now will have to litigate their claims under two standards: (1) discrimination under the “motivating factor” test which requires a plaintiff to show only that a prohibited characteristic was a motivating factor in the employer’s adverse action, even if other factors also motivated the action; and (2) retaliation under the “but for” standard which requires a plaintiff to show that the employer would not have taken the adverse action but for a retaliatory motive. The dissent concluded that this decision is at odds with a line of previous decisions that recognize retaliation claims are inextricably bound up with an underlying discrimination claim. Justice Ginsburg, writing the dissenting opinion, stated “the Court appears driven by a zeal to reduce the number of retaliation claims filed against employers.” Calling the majority decision “misguided,” the dissent urges Congress to enact another Civil Rights Restoration Act to counter and remedy the injustice done by the majority opinion.

Employers May Face Fewer Retaliation Claims or At Least, Fewer Successful Claims

In practice, it is questionable how relevant the causation standard may be to potential litigants of retaliation claims. Employees believing they have been wronged after they complain about discrimination will likely still file retaliation claims, no matter what causation standard applies. Juries often will conclude retaliation occurred based on a general “fairness” standard. However, employers may be able to resolve such claims at the summary judgment stage (when a court decides a claim does not merit a trial), because proof of other factors that contributed to the adverse employment decision will defeat the retaliation claim.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

June 25, 2013

Supreme Court Limits Definition of Supervisor for Employer Liability in Workplace Harassment Claims

By Emily Hobbs-Wright

In a huge win for employers, the U.S. Supreme Court today decided that for purposes of determining employer liability for Title VII harassment cases, a “supervisor” is limited to those who are empowered by the employer to take tangible employment actions against the victim. Vance v. Ball State Univ., No. 11-556 (U.S. June 24, 2013). This means that employees who oversee the daily activities of other employees, but do not have the power to discipline, fire, promote, transfer or take other actions against an employee, are not considered “supervisors” in workplace harassment cases under Title VII.

In drawing a sharp line between co-workers and supervisors, the Supreme Court adopted a clear standard that parties and reviewing courts can apply early in a case in order to determine which side has the burden of proof in Title VII harassment litigation.

Supervisor vs. Co-Worker as Harasser – Why It Matters

Determining employer liability for harassment under Title VII of the Civil Rights Act of 1964 depends on whether the alleged harasser is a “supervisor” or a “co-worker” of the individual being harassed. If the harasser is a co-worker, the employer will be liable for the harassing behavior only if the complainant can show that the employer was negligent, meaning that the employer knew or should have known of the conduct and failed to take immediate and appropriate corrective action. See 29 CFR § 1604.11(d).

If the harasser is a supervisor, however, the test for employer liability changes dramatically. If the harassing supervisor caused a tangible employment action such as firing, demoting or reducing the complainant’s pay, the employer will be automatically liable for the harassment. If there was no tangible employment action, the employer may still be liable, unless it can meet a two-pronged affirmative defense known as the Faragher/Ellerth defense.

In order to establish the Faragher/Ellerth defense, outlined by the Supreme Court in the companion cases of Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 24 U.S. 742 (1998), an employer must show: (1) that the employer exercised reasonable care to prevent and promptly correct the harassing behavior; and (2) the plaintiff-employee unreasonably failed to take advantage of preventative or corrective measures established by the employer or to avoid harm otherwise.

The key difference between cases alleging harassment by a co-worker and a supervisor is the burden of proof. With co-worker harassment, the plaintiff-employee bears the burden of demonstrating employer negligence. When trying to avoid liability for supervisor harassment, however, the employer bears the burden of establishing the Faragher/Ellerth affirmative defense. The higher hurdle that must be met by employers when litigating supervisor harassment raises the opportunity for the plaintiff-employee to recover damages for harassment in the workplace. Consequently, an important issue in a harassment case is whether the alleged harasser is a supervisor or a co-worker.

Supreme Court Resolves Split in the Circuits on Definition of “Supervisor”

Lower courts have disagreed on the test for deciding whether an alleged harasser is a “supervisor” or merely a co-worker. Some federal appellate courts, including the First, Seventh and Eighth Circuits, have ruled that an employee is not a supervisor under Title VII unless he or she has the power to hire, fire, demote, promote, transfer, or discipline the victim. Other circuits, including the Second and Fourth Circuits, have followed the more expanded approach urged by the Equal Employment Opportunity Commission (EEOC), which applies “supervisor” status to those who have the ability to exercise significant direction over another employee’s daily work activities.

In a 5-4 decision, the Supreme Court resolved this split in authority by holding that an employer may be vicariously liable for an employee’s unlawful harassment only when the employer has empowered that employee to take tangible employment actions against the victim, that is, to effect a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. Calling the EEOC’s definition of supervisor “nebulous,” the Court stated that it was not sufficient to deem an employee a “supervisor” based on his or her ability to direct another employee’s tasks. The Court noted that the EEOC Guidance that looks at the number (and perhaps the importance) of the tasks in question would be a “standard of remarkable ambiguity.” Relying on the Faragher and Ellerth decisions, the Court stated that a supervisor is instead empowered by the company as a distinct class of agent that may make economic decisions affecting other employees under his or her control.

Bright Line Between Co-Workers and Supervisors Will Aid Employers Facing Harassment Claims

The bright line test that the Court adopted for determining who is deemed a “supervisor” in Title VII cases eliminates murkiness and provides a clear test that reviewing courts can easily apply. The Court noted that it typically will be known before litigation is commenced whether an alleged harasser was a supervisor, and if not, it will become clear to both sides after discovery. The Court goes on to say “once this is known, the parties will be in a position to assess the strength of a case and to explore the possibility of resolving the dispute. Where this does not occur, supervisor status will generally be capable of resolution at summary judgment.” The Court clearly wanted employers to be able to get the supervisor issue resolved early in a lawsuit so that both sides will know who bears the burden of proof and can pursue early resolution of the case based on the strength of the evidence.

Employees Still Protected, but Must Prove Company Negligence

The Court’s majority, which includes Justices Alito, Roberts, Scalia, Kennedy and Thomas, states that employees who face harassment by co-workers who possess the authority to inflict psychological injury by assigning unpleasant tasks or by altering the work environment in objectionable ways will still be protected under Title VII. The Court states that such victims will be able to prevail “simply by showing that the employer was negligent in permitting this harassment to occur, and the jury should be instructed that the nature and degree of authority wielded by the harasser is an important factor to be considered in determining whether the employer was negligent.” According to the majority, the fact that harassing co-workers may possess varying degrees of authority over daily tasks will not be a problem under the negligence standard “which is thought to provide adequate protection for tort plaintiffs in many other situations.”

Dissent Would Follow EEOC’s Guidance and Extend “Supervisor” Status Based on Authority to Direct an Employee’s Daily Activities

Justice Ginsburg, joined by Justices Breyer, Sotomayor and Kagan, wrote a lengthy dissent opining that the majority’s rule diminishes the force of Faragher andEllerth, ignores the reality of the current workplace and strays from the objective of Title VII in preventing discrimination in the workplace. The dissent favors the EEOC’s Guidance, believing that employees who direct subordinates’ daily work are supervisors. Justice Ginsburg wrote that although one can walk away from a fellow employee’s harassment, “[a] supervisor’s slings and arrows, however, are not so easily avoided.” The dissent recites numerous cases in which a person vested with authority to control the conditions of a subordinate’s daily work life used his position to aid his harassment, and then points out that in none of the cases would the majority’s “severely confined definition of supervisor yield vicarious liability for the employer.” The dissent concludes that the majority decision embraces a position that relieves scores of employers of responsibility for the behavior of the supervisors they employ.

Conclusion – Victim Must Prove Employer Negligence When Harassed by a Non-Supervisor

The Vance opinion means that employees alleging harassment by another employee who does not have the power to hire, fire, promote, transfer or discipline them, bear the burden of proving the employer’s negligence in order for the employer to be liable for the harassment. This means the alleged victim must prove that the employer knew or should have known of the conduct and failed to take immediate and appropriate corrective action.