Texas Employment Law Update : Texas Employment Lawyer & Attorney : Russell D. Cawyer : Kelly Hart & Hallman Law Firm : Dallas TX Labor Updates

On February 18, 2010, the EEOC published a proposed rule defining the employer's "reasonable factors other than age" (RFOA) defense to a claim of disparate impact age discrimination.  A disparate impact theory of age discrimination argues that while the policy or practice challenged does not directly discriminate on the basis of age; it affects older workers in greater numbers.  When a plaintiff can show that an age-neutral employment policy or practice has an adverse impact on workers 40 and over, the burden shifts to the employer to show that the challenged policy or practice is based on RFOA.

The proposed rule defines a RFOA as "one that is objectively reasonable when viewed from the position of a reasonable employer (i.e., a prudent employer mindful of its responsibilities under the ADEA) under like circumstances."  The proposed rule goes on to provide that "to establish the RFOA defense, an employer must show that the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known to the employer."

The proposed rule identifies the following non-exhaustive list of factors that may be relevant when examining whether an employment policy or practice is based on a reasonable factor other than age:  

• Whether the employment practice and the manner of its implementation are common business practices;
• The extent to which the factor is related to the employer's stated business goal;
• The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
• The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
• The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the number of persons adversely affected, and the extent to which he employer took preventive or corrective steps to minimize the severity of harm, in light of the burden of undertaking such steps; and
• Whether other options were available and the reasons the employer selected its chosen option.

An employer is not required to adopt an employment practice that has the least severe impact on the older workers; however, the availability of other options is one factor relevant in determining whether the practice was reasonable. Of course, the RFOA defense only applies to those employment practices that are facially age-neutral.  The proposed rule explains that its analysis will most often apply when the practice is based on an objective non-age factor and the only question is the reasonableness of the factor.  However, in considering whether the practice is based on a "factor other than age", the EEOC suggests analyzing:

• The extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;
• The extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and
• The extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

Following a sixty (60) day public comment period, the EEOC will review comments and potentially make revisions to the proposed rule before publishing a final rule that would go into effect ninety (90) days after publication.   A copy of the proposed rule and the EEOC's preamble can be accessed here.

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The EEOC has released its FY 2009 Charge Statistics and they show a surprising decrease in the number of charges filed with the agency (although FY 2009 is compared against the highest charge filing fiscal year ever).  The total number of charges in FY 2009 dropped from 95,402 in FY 2008 to 93,277 in FY 2009.  While there was a drop in the overall number of charges filed, FY 2009 still recorded the second highest number of charges ever filed.  

The breakdown of the FY 2009 statistics shows that there were small increases in the number of charges alleging national origin, religious discrimination and retaliation.  There was a nearly 2,000 charge increase in disability-related charges.  The categories all saw record high filings.  All other charge categories saw a decrease in charge filings. 

Prediction for FY 2010 numbers --Expect to see continued increase in the number of disability and religious discrimination filings with other categories remaining relatively constant.  You can find full detail on the number of charge filings here.

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The EEOC recently brought suit against the country's largest home builder on behalf of a pregnant employee who was denied a period of unpaid leave in addition to the maximum permitted under the employer's policies.  What is unique about this suit is that the EEOC brought the suit under the Americans with Disabilities Act rather than the Pregnancy Discrimination Act.

According to the Commission's press release, D.R. Horton, 

denied [the plaintiff] additional unpaid leave time after her doctor placed her on bed rest for over seven months as a result of pregnancy-related complications. Although the company initially provided some leave time, it finally stated it was against company policy to provide the employee any more leave time, even if it was unpaid, and then fired her.

Prior to the passage of the ADA Amendments Act, it is unlikely that the EEOC would have brought this case under the ADA because most courts were reluctant to conclude that pregnancy was a disability.  Instead, the Commission would have had to show under the Pregnancy Discrimination Act that the pregnant employee was treated differently than other nonpregnant employees who were similar in their ability and inability to work (i.e., similar work restrictions).  However, the EEOC is targeting employer leave policies that are perceived by the Commission as rigid.  An example of such policy is one that provides a maximum leave duration of six or twelve months.

One aspect of this tactic that should be troubling to Texas employers is the fact that Texas law uses the enforcement of a neutral absence control policy as a defense to a workers' compensation claim.  Where an employer uniformly and consistently applies a leave of absence policy with a maximum duration, an employee who is separated from employment for exhausting the available leave of absence, even if the absence is caused by an on-the-job injury, will have no workers' compensation retaliation claim.  Suits like the EEOC's suit against D.R. Horton may have the effect of requiring employers to make more frequent exceptions to these neutral absence control policies that might weaken their effectiveness as a defense in Texas workers' compensation retaliation cases.

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The U.S. Supreme Court completed its 2008-09 term. On the docket were five cases of interest dealing with employment law.  Here is a summary of the holdings in those cases.

• Crawford v. Metropolitan Gov’t of Nashville and Davidson County, Tenn., (2009) An employee’s participation in an employer’s internal harassment investigation by responding to the employer's questions may constitute protected oppositional activity under Title VII that would support a retaliation claim. 
• 14 Penn Plaza LLC v. Pyett, (2009) Provisions in collective bargaining agreements that clearly and unmistakably require union members to submit statutory discrimination claims to the grievance and dispute resolution provisions of the agreement are binding and enforceable on the bargaining unit members.  More detail here.
• AT&T Corp. v. Hulteen, (2009) An employer does not necessarily violate the Pregnancy Discrimination Act when it calculates and pays pension benefits based on an accrual rule that applied only pre-PDA, and gives less retirement credit for pregnancy leave than for other medical leave.
• Gross v. FBL Financial Services, Inc., (2009)  A plaintiff asserting an age discrimination claim under a disparate (i.e., intentional) treatment theory must prove that age was the “but for” cause of the challenged employment action and the burden of proof never shifts to the employer to show that it would have taken the same action regardless of the age of the plaintiff.  More detail here.
• Ricci v. DeStefano, (2009)  An employer can avoid Title VII disparate-impact liability related to a promotional exam having a disparate impact on minorities if the employer can show a strong basis in evidence that, had it not certified the results, if would have been subject to disparate-treatment liability.  More detail here.

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In one of the most anticipated employment discrimination cases in years, the U.S. Supreme Court held that the City of New Haven discriminated against non-minority firefighters when it chose to ignore the test results of a racially-neutral promotional exam because too few minorities scored high enough on the test to be considered for promotion.  I previously wrote about this case and outlined its facts.  (See here for post).

In Ricci v. DeStafano, a majority of the Supreme Court began with the premise that the City's decision to ignore the results of its promotional testing because too few minority fire fighters scored well on the test, constituted intentional discrimination against the firefighters that scored well on the test.  There was no dispute that the City disregarded the test results because of the race of the test takers and the fact that no minorities scored high enough to qualify for promotion.  Concluding that this conduct constituted intentional discrimination, the Court examined whether the City had a legitimate justification for ignoring the test results. 

The City's sole justification for the ignoring the test results was that if it recognized the results it would face litigation from the minority firefighters who took, and scored poorly, on the test.  The minority firefighters, the City predicted, would sue the City claiming that the racially-neutral test had a disparate impact on minority firefighters and therefore discriminated against them.  The City argued that it was faced with a Hobson's choice where no matter what it elected to do it would be faced with a discrimination lawsuit (i.e., either being sued by the white firefighters who scored well and were denied promotional opportunities because the test results were ignored or by the minority firefighters who claimed the test unintentionally discriminated against them by recognizing a test that had a disparate impact on minorities).

The Court explained that if the City had a "strong basis in evidence" that its recognition of the test results would subject it to disparate-impact liability in the absence of it taking the race-conscious, discriminatory action --not necessarily that it would lose an disparate impact case.  To make this showing, there would need to be a showing of a significant statistical disparity; and the tests were no job related and consistent with business necessity; or there existed an equally valid, less-discriminatory alternative that served the City's needs that it refused to adopt.  Applying this standard to the Ricci case, the Court concluded that City lacked a strong basis in evidence that it would be subjected to disparate-impact liability if it recognized the test results.  Therefore, it found that City discriminated against the non-minority firefighters when it threw out the test results.    

The lesson from Ricci is that when an employer is faced with qualification or promotional exam that may have a disparate impact on a protected class, the employer must build a strong record and attempt to ferret out the reasons for the disparity before deciding whether to ignore the results.  A strong case would begin with a test that was designed in such a way as to avoid a disparate impact as was the case in Ricci.  The Court's opinion makes clear that it is not intended to prohibit an employer from considering (before test administration) a way to design a test that provides a fair opportunity for all individuals, regardless of their race.  Instead, the legal analysis encourages employers (and gives them broad latitude) at the test-design phase to invite comments to ensure the test is fair.  This would tend to help to identify aspects of the prospective test that might not be job-related and consistent with business necessity or other equally effective, less discriminatory alternatives.  

With a strong record in this regard, an employer assert and prevail with the new defense announced by the Ricci court when it faced with the prospect of being sued for disparate treatment (i.e., intentional) or disparate impact (i.e., unintentional) discrimination.   

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In Gross v. FBL Financial Services, Inc., the U.S. Supreme Court was asked to decide whether a plaintiff must present direct evidence of discrimination in order to obtain a mixed-motive instruction in a non-Title VII discrimination case.

In the case, Plaintiff Gross was employed by FBL Financial Group since 1971. In 2001 he held the title of claims administration director. Gross was reassigned in 2003 to the position of claims project coordinator. He was 54 years old.  Many of the job duties Gross previously performed were transferred to a newly created position and that position was given to a female former subordinate of Gross who was in her early 40’s. While Gross and the co-worker received the same compensation, Gross considered his reassignment and reallocation of job responsibilities a demotion. Consequently he filed suit alleging age discrimination under the Age Discrimination in Employment Act. At trial, the jury was asked to decide whether age was “a motivating factor” in the decision to reassign and reallocate Gross’s job responsibilities. This permitted the jury to find in Gross’ favor if even one of many reasons for the job changes was Gross’ age. FBL requested a jury instruction that would have only permitted the jury to find for Gross if he showed that the challenged job actions would not have occurred “but for” Gross’ age. The jury found for Gross.

On appeal, the U.S. Supreme Court found that it was improper to charge the jury under “a motivating factor” standard of causation. The U.S. Supreme Court held that a plaintiff asserting an age discrimination claim under a disparate (i.e., intentional) treatment theory must prove that age was the “but for” cause of the challenged employment action and the burden of proof never shifts to the employer to show that it would have taken the same action regardless of the age of the plaintiff. 

This is a significant, but perhaps short-lived, win for employers at the Supreme Court. Like other decisions of the Supreme Court that the Democratically-controlled Congress dislikes, expect quick legislation to be proposed to amend the ADEA to reinstate the “motivating factor” standard of causation.

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A federal appellate court with jurisdiction over Texas held that chronic fatigue syndrome (CFS) may qualify as a disability under the Americans with Disabilities Act. According to the Centers for Disease Control, CFS is characterized by symptoms including weakness, muscle pain, impaired memory and/or mental concentration, insomnia, and post-exertional fatigue lasting more than 24 hours.  There is no known diagnostic test for CFS and physicians are left to rely on forensically unreliable self-reports of the patient to make this diagnosis.   Notwithstanding this inability to test for or confirm the existence of this "syndrome," the federal court of appeals covering Texas held that CFS might qualify as a disability that an employer must reasonably accommodate. 

In EEOC v. Chevron Phillips Chemical Co., L.P., the Fifth Circuit Court of Appeals reversed a summary judgment in favor of Chevron on an employee's claim that she was discriminated against and denied reasonable accommodation for her chronic fatigue syndrome.

The employee, Lorin Netterville, was first diagnosed with CFS in 1987 while attending school and caring for her children at home.  She received a six-week course of treatment and her symptoms disappeared.  In late-2000 Netterville applied for employment with Chevron and was eventually hired.  As part of the employment process Netterville completed a medical history questionnaire, where she failed to disclose a history of excessive fatigue with work or exercise.

Several years later Netterville was required to work long hours of overtime that included manually packing boxes and moving supplies as part of Chevron's office relocation. Netterville claims she begin to suffer sleep disruptions that included getting no more than 1-2 hours of sleep per night for 6-7 days at a time.  Once a month she claimed she would sleep 17 hours straight.  She also claims she "began to run low-grade fevers and to suffer from headaches, disorientation, pain in her temples, stiff joints, pain in her arms and legs, and numbness in her legs, as well as aphasia and problems with memory, concentration and decision-making at times she was unable to remember even her own son's name."  She became unable to sit or walk for more than thirty minutes at a time, was hypersensitive to light and sound, and experienced episodic crying spells and feelings of social isolation.  Approximately 1 year after her symptoms reoccurred Netterville was living with her sister who assisted her with daily living tasks like shopping, cooking, washing, showering, drying, dressing, and using the bathroom.  This assistance was primarily needed because of excruciating pain in Netterville's arms and morning nausea she experienced.

Netterville's physician suggested that she take a month off from work.  Because Netterville could not afford a month off without pay, she got her doctor to write a note advising for a two week break from work.  When Netterville presented her request to Chevron for the 2 weeks of time off, she inaccurately reported that her symptoms had reappeared 2 years earlier.  Because Netterville was hired by Chevron less than 2 years earlier, the company also began investigating whether Netterville had falsified her medical history questionnaire in addition to considering her leave request.  Ultimately Netterville was given her two weeks of leave.

Netterville's physician conditioned her release to return to work on additional accommodations.  He recommended that she be relocated to an office closer to her home.  Additionally, due to her alleged hand pain and concentration difficulties, the doctor also advised that Netterville needed to be in a job that allowed for alternate typing and reading rather than reading and typing for extended periods of time.  She also needed to be able to take a short nap during her lunch break.  When Netterville made these requests to her supervisor, he remained silent.  She was allowed, however, to return to work, and she was provided the accommodations she requested during her final 4 days at work.  Ultimately, Netterville was terminated for falsifying information on her medical questionnaire.

The EEOC filed a lawsuit on Netterville's behalf.  Relying heavily on EEOC-promulgated regulations and its compliance manual (the EEOC is one of the governmental agency litigants that gets to write the authority it then asks a court to rely on to find in its favor --something no private employer is allowed to do), the court of appeals held that Netterville was entitled to a jury trial on her claims because there were fact issues as to whether Netterville had a disability; whether she was terminated for a disability; and whether Chevron provided reasonable accommodation.

This case is an important reminder that any physical or mental impairment may qualify as a disability if it substantially limits a major life activity. Moreover, the major life activity substantially limited need have no bearing on an employee’s employment or performance of his or her job duties. With the passage of the ADA Amendments Act that substantially broadens the coverage of individuals with disabilities, expect more denials of and reversals of employer summary judgments in ADA cases.

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Hurricane season begins June 1 for the Texas coast.  The Tropical Meteorology Project from Colorado State University predicts in its 2009 Atlantic Seasonal Hurricane Forecast that there will be 12 named storms; 6 hurricanes; and 2 intense hurricanes this year.

Texas law protects most employees who evacuate their homes and work areas in compliance with a government evacuation order.  The law prohibits employers from terminating the employment of or otherwise discriminating against employees (other than emergency services personnel with adequate emergency shelter and employees needed to restore vital services) who leave their employment to to comply with an emergency evacuation order.  While evacuation orders are most frequently issued in Texas in connection with a  hurricane evacuation order, the law applies to any evacuation order.  Evacuation orders may be issued for emergencies such as wild fires, natural disasters, explosions or water contamination, chemical escapes or spills, terrorism activity, military action and other emergency actions.  Evacuation orders providing employees protection can be issued by local, county, state or federal authorities.

Not only are employees protected from discharge or discrimination from complying with such orders, they may also be eligible for unemployment benefits.  The employer's unemployment benefit account will not be charged for the benefits paid under this circumstance.

(Photo courtesy of NOAA Aug. 29, 2005 at 11:15 a.m.)

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In 2008 the Genetic Information Nondiscrimination Act (GINA) was passed.  Earlier this year the EEOC issued proposed regulations interpreting GINA and those regulations are expected to be finalized this month.  GINA generally prohibits employers from possessing and using genetic information about individuals or from making employment decisions using that information, with several limited exceptions.  A number of other commentators have provided a great deal of thoughtful analysis about GINA and its proposed regulations.  The Employer Law Report, Connecticut Employment Law Blog and the Ohio Employer's Law Blog all have useful information on GINA.

In thinking about GINA's likely impact, I question whether it will have a significant effect on Texas employment practices.  First, the type of information protected by GINA is not the kind of information typically used or gathered by employers.  With the exception of employers who use healthcare providers to conduct business-related, post-offer of employment physicals, it is difficult to imagine a systemic employment practice an employer might engage in that would run afoul of GINA.  For those business-related, post-offer of employment physicals, employers can avoid violating GINA by instructing the healthcare provider to either take no family medical history from the individual or make sure it does not pass that information on to the employer.

Second, Texas has prohibited discrimination in employment on the basis of an individual's genetic information or refusal to submit to a genetic test since 1997.  Like GINA, the Texas statute also requires that any person holding genetic information must keep it confidential with few exceptions.  Although the law has been in effect for 12 years, there are no reported Texas state or federal opinions where an applicant or employee sued an employer alleging violation of the Texas statute.

At first blush GINA appears to be a solution looking for a problem.  While I think GINA  is an interesting statute --one which employers must pay attention to and comply with --it is unlikely to have a significant impact on the way employers operate on a day-to-day basis.

Follow the Texas Employment Law Update on Twitter (here).

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I just returned from Tulane University Law School's 27th Annual Multi-State Labor and Employment Law Seminar held at the La Cantera resort in San Antonio, Texas.  (See brochure here).  Attendees and presenters at this conference are some of the finest and most experienced labor and employment lawyers in the country.  During my three days at the conference, I did an unscientific, anecdotal survey of the practitioners I visited with.  Without exception, the practitioners I talked to disfavored the arbitration of employment disputes.  I've already written about the disadvantages of arbitration on this blog. (See post here). However, I was surprised that I did not find a single lawyer at this conference (and I don't profess to have spoken to all or even a majority of them) that preferred trying a case in arbitration over a case tried to a judge of jury.  No one I spoke to had ever enjoyed the "benefits" of a faster or more inexpensive resolution of the dispute in arbitration than would have realized in court.  No attorney extolled the virtue of the the limited appeal rights or the "finality" arbitration promises over the appellate rights our Texas rules provide.  Therefore, I want to encourage Texas employers to abandon the use of mandatory arbitration programs with their employees in favor of adopting mutual waivers of jury trials.  To read about the advantages of jury waivers, click here.

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As we approach local elections, it is good to remember that Texas law may require an employer to provide an employee with paid time off to vote.  The Texas Election Code makes it a Class C misdemeanor for an employer to refuse to allow an employee to be absent from work on election day for purpose of attending the polls to vote.

An employer is not, however, required to allow time off to vote if the polls are open on election day for voting for two consecutive hours outside of the employee's working hours.  For example, if you have an employee that regularly works 8:30 a.m. to 5:30 p.m. with a one-hour lunch break, an employer may have to give that employee time off from work on election day to attend to the polls and vote. In Texas, the election polls are generally open from 7:00 a.m. until 7:00 p.m. 

Because the term "penalty" means a loss or reduction in wages, an employer should provide paid time off for the employee to attend the polls to vote if the polls are not open on election day for at least two consecutive hours outside the employee's working hours.

An employer can avoid this interruption and the payment for otherwise nonworking time by rescheduling work schedules on election day so that employees have two consecutive hours off while the polls are open (e.g., reschedule the employee to work 8:00 a.m. to 5:00 p.m. on election day). 

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For several years the EEOC has enhanced its education and enforcement efforts using existing laws to protect employees with caregiving responsibilities (i.e., caring for children and ill family members).  This week the Commission issued guidance for employers it describes as "Best Practices" to assist employees in balancing work and family responsibilities.  Best Practices are proactive measures going beyond federal nondiscrimination requirements to help employees achieve a satisfactory work-life balance.

Acting EEOC Chairman Stuart J. Ishimari remarked that "Today we take another step forward, articulating not just the bare minimum required to avoid unlawful discrimination, but also thinking broadly about the ways in which family-friendly workplace policies can improve workers' ability to balance caregiving responsibilities with work."

The new guidance supplements the EEOC's 2007 guidance on Unlawful Treatment of Workers with Caregiving Responsibilities.  In addition to some common sense recommendations (e.g., train managers; develop, disseminate and enforce a strong EEO policy; investigate complaints), the most interesting suggestions to me are those related to flexible work arrangements. Some of the alternative work arrangements suggested include:

• Flexible work hours (i.e., permit a varying starting and stopping time within a certain range);
• Flexible week opportunities (e.g., work week consisting of four 10-hour days);
• Allowing for voluntary rather than mandatory overtime and allowing overtime to be scheduled in advance;
• Telecommuting, work-at-home or flexplace programs;
• Reduced-time options (i.e., part time work or job sharing programs).

EEOC's guidance provides a useful reference for any employer desiring to become more family-friendly and better assist its employees in achieving a balance between family and work. 

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Adam Liptak of the New York Times had an interesting preview about an important employment law case scheduled to be argued before the U.S. Supreme Court this month.  In Ricci v. Destafano, scheduled for oral argument on April 22, 2009, the Court is being asked to determine whether the City of New Haven's use, and then abandonment, of a firefighter promotional exam discriminated against white firefighters. 

As  Liptak wrote for the Times, Frank Ricci was an 11-year veteran of New Haven Fire Department who desired to advance to lieutenant.  To qualify for the promotion Ricci had to take a test that the City paid $100,000 to an independent testing company to develop.  The testing company , I/O Solutions, Inc., went to extraordinary lengths to ensure that the test was free of any racial bias.

Ricci wanted the promotion so badly that when the City offered the promotional exam, Ricci "gave up a second job and studied up to 13 hours a day.  Mr. Ricci, who is dyslexic, paid an acquaintance more than $1,000 to read textbooks onto audiotapes. He made flashcards, took practice tests, worked with a study group and participated in mock interviews."

Ricci finished 6th out of the 77 candidates that took the test.  However, because none of the 19 African American firefighters scored high enough to qualify for the promotion, the City threw out the test.  At this point it appears that the City was concerned about being sued by the African American firefighters who scored poorly on the test claiming that the test had a disparate or adverse impact on them.

Instead, Ricci (along with eighteen other firefighters) sued the City claiming that its abandonment of the test because none of the minority candidates qualified for promotion under the test constitutes unlawful discrimination. The trial court recounted that the City's motives for abandoning the test that included fear of public criticism, the possibility of more lawsuits from minority applicants and a desire to promote diversity and manager role models for firefighters.

The case is likely to outline the extent to which an employer can go to further its goal of increasing racial diversity in the workplace.  And while most "reverse discrimination" lawsuits do not tend to do well in Court, the facts in Ricci make for an intriguing case for the Justices to consider.  For more background information and  "pregame" commentary on this case, the National Journal Magazine, the New Haven Independent and the Connecticut Employment Law Blog have some interesting articles.  Adversity.net has the results of the test by score and race.

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Today, the U.S. Supreme Court held that provisions in collective bargaining agreements that clearly and unmistakably require union members to submit statutory discrimination claims to the grievance and dispute resolution provisions of the agreement are binding and enforceable. 

In 14 Penn Plaza LLC v. Pyett ,  a dispute arose over a commercial office building's reassignment of night watchmen employees (whose duties were outsourced) to less desirable positions such as light duty cleaners and porters.  The reassigned employees, members of the Service Employee International Union, Local 32BJ, filed a grievance with the union contending that the reassignments violated, among other things, the CBA's ban on age discrimination.  When the grievances were unsuccessful, the Union requested arbitration under the dispute resolution procedures of the CBA.  The union later withdrew the grievances to the extent they complained about age discrimination prohibited by the contract but continued to press for arbitration on the remaining claims.

The disgruntled reassigned employees then filed a charge of discrimination with the EEOC over their reassignment claiming the reassignments were discriminatory.   After the EEOC issued a right to sue letter and the employees sued in federal district court, the defendant filed a motion to compel arbitration relying on the language of the grievance and dispute resolution procedures of the CBA with the union that stated:

§ 30 NO DISCRIMINATION. There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, . . . or any other similar laws, rules, or regulations. All such claims shall be subject to the grievance and arbitration procedures (Articles V and VI) as the sole and exclusive remedy for violations. Arbitrators shall apply appropriate law in rendering decisions based upon claims of discrimination.

The trial court and Second Circuit Court of Appeal refused to compel arbitration holding that a CBA could not waive the bargaining unit members' right to a judicial forum over statutory civil rights claims created by Congress.

The Supreme Court reversed holding that where the intent to submit statutory discrimination claims to the grievance and dispute resolution procedures of the CBA is clear and unmistakable (an issue that was not in dispute before the court --i.e., the parties agreed that the language was sufficiently explicit) nothing precluded the union's ability to waive its members right to a judicial forum to resolve those discrimination claims.  A majority of the Court rejected the employee's argument that the union was waiving important, substantive rights to be free from age discrimination. 

The Court noted that the union had not waived (nor could it) the employee's right to be free from and to challenge employment actions that were based on unlawful motivations such as age discrimination.  Rather, the Court observed, the Union had merely negotiated for and agreed that such claims would be resolved in a forum other than a judicial one --i.e., arbitration.  Consequently, the Court held that to the extent the employees were to litigate their statutory age discrimination claims they would have to do so within the confines of the grievance and dispute resolution procedures of the CBA.

As a consequence of this ruling it is unlikely that unions will agree in future negotiations that their grievance and arbitration procedures include employment discrimination and civil rights claims.  Placing the unions in the position of using limited resources to arbitrate otherwise individual claims is unlikely to be something that benefits the majority of the bargaining unit members.  This potential conflict of interest is something most unions would prefer to avoid. 

Other commentators have suggested, and I agree, that the holding of this case is likely to be limited because Congress may seek to overturn it as it did with the Court's Ledbetter decision.  See Jottings by an Employer's Lawyer and The Delaware Employment Law Blog . 

Another potential consequence is that the existence of a mandatory arbitration provision in a CBA covering employment discrimination claims may be an important factor the EEOC considers in deciding whether to litigate over a particular charge of discrimination.  Under the current law the EEOC is not be bound by the grievance and arbitration provisions in CBA's (nor individual employment contracts between employees and employers) and it could vindicate an employee's rights in a federal judicial forum notwithstanding the CBA.

Until legislation is passed to overturn 14 Penn Plaza, employers and unions with CBAs that clearly and unmistakably include employment discrimination and civil rights claims in the grievance and dispute resolution provisions will now be forced to resolve those disputes in an arbitral forum.

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On March 20, 2009 I posted an entry about several leave of absence bills pending in the Texas Legislature.  Today I want to highlight a few other bills that will effect Texas employers if passed.

• HB 32  Prohibiting discrimination against employees of workers' compensation nonsubscribers who sustain an injury in the course and scope of their employment.
• HB 183  A bill to link the Texas minimum wage to the federal minimum wage.
• HB 226 Prohibits an employer from discriminating against an employee that has refused to participate in an employer's charitable deduction campaign.  
• HB 978  To amend, and greatly expand, prohibited disability discrimination under the Texas Commission on Human Rights Act.
• SB 730 prohibits an employer from implementing policies prohibiting employees from keeping legal firearms and ammunition in locked vehicles on the employer's parking lot.
• SB 986 To extend the statute of limitations for discrimination claims alleging discrimination in the payment of compensation.  State law equivalent of the Lilly Ledbetter Fair Pay Act.

There are also a number of immigration bills pending this session.  Michael Fox has detailed those bills on his blog.

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The EEOC recently released the latest statistics detailing the number of charges of discrimination filed in 2008.  Last year marked the largest number of charges filed in a single year totaling 95,402 charges of discrimination.  While every category of charges increased (and the total increased 15.2 percent over 2007), charges of age discrimination and retaliation increased the most at 28.6 and 22.6 percent respectively. 

Disability discrimination claims saw the least amount of growth at 9.6 percent.  However, with the passage of the ADA Amendments Act in 2008, I expect 2009 disability discrimination claims to be up sharply during 2009.  Equal Pay Act claims were also up 16.6 percent and with the passage of the Lilly Ledbetter Fair Pay Act, claims arising under that statute will also likely increase in 2009 and beyond.  With escalating unemployment, the deepening recession, and an increase in the EEOC’s budget, I expect charge filings for 2009 will again set an all-time record for charge filings across all categories and an uptick in resulting civil rights litigation against employers.

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