Author: James Denis

For six years, Frank Woodward was a director of sales at Emulex Corp., a Costa Mesa, California-based technology company specializing in sales of computer components.

Woodward, who worked remotely in Massachusetts, had an excellent performance record, but because of a series of Emulex decisions, Woodward’s sales significantly declined by 2009. In response, Emulex eliminated the jobs held by Woodward and his two assistants and terminated Woodward.

Woodward sued Emulex for age-based employment discrimination under Massachusetts law, citing comments of Emulex managers that Woodward needed to “re-energize” and the irrational basis for his termination decision to show pretext.

The U.S. District Court for the District of Massachusetts granted summary judgment for Emulex and dismissed the lawsuit.

On appeal to the 1st Circuit Court of Appeals, that court agreed that the alleged comments showed no basis to demonstrate that age played a factor in the termination decision. Woodward’s claim that Emulex’s business judgment was so bad that its firing of Woodward must have been “pretextual” for discrimination, was also unpersuasive.

The 1st Circuit said it is “not concerned” with “unwise or unreasonable” business decisions, but only whether the stated reason for the decision is dishonest.  Also, Woodward was unable to demonstrate that younger, similarly situated employees with low sales had been retained by Emulex. Woodward v. Emulex Corp. (1st Cir.) No. 12-1612 (April 18, 2013).

IMPACT: An employer’s business judgment to justify terminations and other job actions is rarely sufficient to infer discriminatory motives without also showing statute-violating discriminatory conduct. Employers are advised to ensure that reductions in force are defensible by showing that similarly situated employees are equally affected.   

James E. Hall, Mark T. Kobata and Marty Denis are partners in the law firm Barlow, Kobata and Denis, which has offices in Los Angeles and Chicago. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

Wynona Harris, a bus driver employed by the city of Santa Monica, California, was fired on the same day she submitted a doctor’s note to her supervisor stating that she could continue working through her pregnancy with limited restrictions. Harris sued, alleging pregnancy discrimination in violation of California’s Fair Employment and Housing Act, or FEHA.

At trial, the city asked the court to instruct the jury that if it found a mix of discriminatory and legitimate motives. The city could avoid liability by proving that a legitimate motive alone would have led it to make the same decision to fire her. The trial court refused the instruction, and the jury returned a substantial verdict for the employee. The appeals court reversed the decision. It held that the requested instruction was legally correct and that refusal to give it was prejudicial error.

The California Supreme Court affirmed the appeals court’s decision. The state Supreme Court held that when a jury finds that unlawful discrimination was a “substantial factor” motivating a termination of employment, and when the employer proves it would have made the same decision absent such discrimination, a court may not award damages, back pay or an order of reinstatement.

Requiring the plaintiff to show that discrimination was a substantial motivating factor ensures that liability will not be imposed based on evidence of mere thoughts or passing statements unrelated to the disputed employment decision. But the court also concluded that “in light of the FEHA’s purposes, especially its goal of preventing and deterring unlawful discrimination … that a same decision by an employer is not a complete defense to liability when the plaintiff has proven that discrimination on the basis of a protected characteristic was a substantial factor motivating the adverse employment action.” Harris v. Santa Monica, California, No. S181004, (Feb. 7, 2013).

IMPACT: Plaintiffs now have a heightened burden of showing discrimination when an adverse decision is based on both a discriminatory and non-discriminatory reason.

James E. Hall, Mark T. Kobata and Marty Denis are partners in the law firm of Barlow, Kobata and Denis, with offices in Los Angeles and Chicago. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

MELISSA MOORE, a nurse employed by Highlands Hospital Corp. in Kentucky, may pursue a wrongful discharge claim against her former employer based on claims she was fired for posting on her Facebook page complaints about high patient-to-nurse ratios at the hospital where she worked.

Moore filed a lawsuit against Highlands in Kentucky state court, alleging that she was fired in retaliation for exercising her free-speech rights under the Kentucky Constitution. Highlands Hospital removed the lawsuit to the U.S. district court in Kentucky on the basis that Moore’s complaint involved claims for violation of the federal laws, including the National Labor Relations Act, and that these federal laws pre-empted her complaint.  Highlands Hospital claimed that Moore’s Facebook postings constituted union activity governed by the NLRA.

The U.S. district court rejected the hospital’s arguments and remanded the case back to state court.

In order to succeed in its arguments, the hospital would have needed to show that the action could have been filed in federal court in the first place. Moore would have needed to have alleged a federal claim or federal law would have needed to pre-empt the nurse’s state law claims. Instead, Moore’s claim was firmly rooted in Kentucky state law without any hint of federal cause of action. Furthermore, neither the NLRA nor the LMRA explicitly pre-empts state law nor is such pre-emption implied. The federal court, therefore, sent the case back to the state court. Moore v. Highlands Hospital Corp., E.D. Ky., No. 7:11-cv-131 (Nov. 17,/2011).

IMPACT: An employee’s complaints about working conditions, even where made public such as on a Facebook post, may be protected by state law and form the grounds for wrongful discharge.

The Equal Employment Opportunity Commission has issued final regulations implementing the ADA Amendments Act of 2008. The act, which became effective Jan. 1, 2009, made significant changes to the definition of “disability” under the Americans with Disabilities Act.

The EEOC’s final regulations broadly construe the variety of physical and mental conditions that qualify for such coverage. The regulations indicate a shift in the focus in ADA cases to whether employers have complied with their obligations and whether discrimination has occurred, as opposed to whether an individual meets the definition of “disability.”

Impairments that will qualify as covered disabilities in “virtually all cases” include autism; blindness; bipolar disorder; cancer; cerebral palsy; deafness; diabetes; HIV infection; intellectual disability; major depressive disorder; missing limbs; multiple sclerosis; muscular dystrophy; and schizophrenia.

The final regulations also expand the list of “major life activities” and “major bodily functions” that can be impaired as “nonexhaustive.” This means that the EEOC may recognize additional examples of major life activities, including, for example, “interacting with others,” “reaching” and “sitting.” The regulations further broadened the definition of the impairments that “substantially limit” an individual. For example, short-term impairments (less than six months in duration), episodic impairments and/or impairments in remission qualify as substantially limiting.

Impact: Employers need to understand and abide by these major changes set forth in the EEOC’s final regulations. For more information, go to eeoc.gov.

Workforce Management, June 2011, p. 12 — Subscribe Now!

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Lynne Wang and two other plaintiffs, on behalf of a class of other news writers, filed a lawsuit against Chinese Daily News Inc., or CDN, alleging that they had worked more than eight hours per day and 40 hours per week without overtime compensation in violation of the Fair Labor Standards Act and the California Labor Code. The plaintiffs also alleged that they were denied meal and rest breaks, among other violations of state law. Finally, the plaintiffs claimed that CDN’s actions violated California’s Business & Professions Code Section 17200, which allows for recovery for “any unlawful, unfair or fraudulent business act or practice.”

The U.S. District Court for the Central District of California granted summary judgment in favor of the plaintiffs on the issue of whether they were exempt from overtime pay requirements. After a jury trial, the plaintiffs were awarded more than $2.5 million in damages for overtime and meal and rest period violations. The trial court also ordered CDN to pay additional damages, penalties and interest that brought the total to more than $5 million. CDN appealed, contending that the news writers were exempt from overtime pay requirements.

The U.S. Court of Appeals for the 9th Circuit in San Francisco affirmed the trial court’s judgment. With respect to the exempt status of the reporters, the court held that because CDN reporters typically wrote several stories each day, “the intense pace at which CDN’s reporters work precludes them from engaging in sophisticated analysis” such that they did not satisfy the requirements of the “creative professional” exemption. It also found that CDN was liable for violating California’s Business & Professions Code Section 17200. Wang v. Chinese Daily News Inc., 9th Cir. No. 08-56740 (Sept. 27, 2010).

Impact: Employers should carefully review overtime pay exemptions found in the federal and state overtime laws because incorrect classifications may result in substantial liability not only under those laws, but also under related state laws involving unlawful business acts or practices.

Workforce Management, December 2010, p. 10 — Subscribe Now!

Patricia Murray, an insurance agent for Principal Financial Group, was held to be an independent contractor, not an employee, so her attempt to claim sex discrimination in violation of Title VII of the Civil Rights Act of 1964 failed.

In determining whether Murray was an independent contractor or an employee, the U.S. district court analyzed the test as three possible formulations under Title VII: a “common law agency” test, an “economic realities” test and a “common law hybrid” test. The San Francisco-based 9th Circuit Court of Appeals found “no functional difference between the three formulations” and that the “common law” test pronounced by the U.S. Supreme Court in Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992), would govern the test of employee status.

The “common law” test focuses on the “hiring party’s right to control the manner and means by which the product is accomplished” and focuses on factors such as “skill required, the source of the instrumentalities and tools, the location of the work, the duration of the relationship between the parties, whether the hiring party has the right to assign additional projects, the extent of the work, the payment method, the hired party’s role in hiring and paying assistants, whether the work is part of the hiring party’s regular business, whether the hiring party is in business, the provision of employee benefits, and the tax treatment of the hired party.”

For Murray, the 9th Circuit held that these factors “strongly favor” finding that Murray was an independent contractor. Murray v. Principal Financial Group Inc., 9th Cir., No. 09-16664 (7/27/10).

Impact: Employers are advised to carefully evaluate applicable legal standards to determine whether a particular worker is an independent contractor or employee.

Workforce Management, October 2010, p. 7 — Subscribe Now!

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

The Equal Employment Opportunity Commission has published a notice of proposed rulemaking giving meaning to the “reasonable factors other than age” defense in the federal Age Discrimination in Employment Act.

The proposed rule follows two decisions from the U.S. Supreme Court: Smith v. Jackson, 544 U.S. 228 (2005), in which the court held that an employment practice that has a disparate impact on older workers is discriminatory unless it is justified by a reasonable factor other than age; and Meacham v. Knolls Atomic Power Lab., 128 S. Ct. 2395 (2008), which held that the employer bears the burden of proving the defense of reasonable factors other than age.

Because neither decision fully explained the meaning of “reasonable factors other than age,” the EEOC proposed rules to explain that “a reasonable factor is one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.” Consistent with Smith, the proposed rule provides that an employer asserting the defense must show its employment practice was reasonably designed to further a legitimate business purpose and administered to achieve that purpose.

The proposed rule also explains that the defense of reasonable factors other than age is applicable where the challenged practice is not based on age. It also offers guidance for employers by providing a non-exhaustive list of factors relevant to determining whether an employment practice is “reasonable” and whether it is based on a factor “other than age” such as job performance, skill sets or the employee’s ability to perform a variety of tasks.

The EEOC’s proposed rule was published in the Federal Register on February 18, triggering a 60-day public comment period, after which the EEOC will review the comments before issuing a final rule. Text of the EEOC’s proposed rule can be accessed at www.eeoc.gov/ laws/regulations/index.cfm.

Impact: Employers are urged to review the EEOC’s proposed rules before changing or applying practices and policies that may affect an employee older than 40.

Workforce Management, April 10, p. 8 — Subscribe Now!

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.