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

The Supreme Court of Texas served up a significant victory for Waffle House in a case holding that a plaintiff alleging both a statutory sexual harassment claim and a negligent supervision and retention claim based on the same conduct is limited to recovering solely on the statutory remedy.  

Here are the facts as reported by the Court.  Cathie Williams worked as a Waffle House waitress for approximately eight months beginning in 2001.  During her employment she was subjected to offensive sexual comments from a  male co-worker cook.  These remarks were sometimes accompanied by physical gestures or attempts at unwelcome flirting.  Additionally, the harasser occasionally pushed Williams into the counters and grill; rubbed his arm against her breast; and on one occasion came up behind her, held her arms and pressed his body against hers.

Williams complained to the restaurant manager, but the conduct did not stop.  Williams then complained to the district manager.  According to Williams, little effort was made to investigate or remedy the offensive conduct.  Williams ultimately resignedly complaining that she was constructively discharged.

Williams filed her lawsuit against Waffle House alleging a statutory sexual harassment claim under the Texas Commission on Human Rights Act (TCHRA) and a common law negligent supervision and retention claim for retaining the harasser after Williams' complaints.  The jury returned a total verdict on both claims of approximately $3.89 million.  Williams elected her remedies under the common law negligence claim which provided her a greater recovery than the statutory claim (and its caps) allowed.  The trial court ultimately entered judgment in Williams' favor for $900,000.

Waffle House appealed arguing that Williams' common law negligent supervision and retention claims were completely preempted because her exclusive remedy for workplace sexual harassment was the statutory claim under the Texas Commission on Human Rights Act.  Waffle House argued that, at a minimum, the damages had to be reduced to reflect the lower damages caps provided for under the TCHRA.

In its analysis, the Court was persuaded that the statutory remedies should be the exclusive remedies under these facts given the comprehensive procedural rules and remedies the Texas Legislature crafted in creating a statutory sexual harassment claim.  Although not specifically articulated, the Court also appeared to be concerned that plaintiffs subjected to workplace harassment might forego the comprehensive administrative procedures under the TCHRA to pursue potentially more lucrative negligence claims, thereby rendering the Texas Workforce Commission's Civil Rights Division less relevant.

The Court held that a sexual harassment plaintiff cannot recover under a negligence theory where the negligence is entwined with the facts of the complained-of harassment.  Stated differently, where the "negligence is rooted in facts inseparable from those underlying the alleged harassment," the plaintiff's sole remedy is a statutory harassment claim.  However, where a negligence claim arises from facts unrelated to the sexual harassment (e.g., assault-based negligence claim), the TCHRA may not necessarily provide the sole remedy. 

You can download the majority opinion and dissent here. 

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By Executive Order dated March 25, 2010, Houston Mayor Annise Parker, added sexual orientation and gender identity as protected categories under the City's anti-discrimination, harassment and retaliation policy.  The Order prohibits discrimination, harassment and retaliation based on gender identity and sexual orientation in all of the City's employment, contracting and vending activities and in the provision and accessing of all City services, facilities, programs and activities.

Specifically prohibited the policy are the following:

• Failing or refusing to hire, recruit, appoint, promote or train any individual or otherwise discipline, demote, transfer lay off, fail to recall, or terminate any individual because of such individual's sexual orientation and/or gender identity;
• Limiting, segregating or classifying employees or applicants in a way that would deprive, or tend to deprive, any individual of equal opportunity or otherwise adversely affect the status of the employee or applicant because of the individual's sexual orientation or gender identity;
• Failing or refusing to recommend any contract or purchase for award based on a contractor or vendor's sexual orientation or gender identity;
• Failing to make available to any member of the public or employee use of a city facility or receipt of city service because of their sexual orientation or gender identity;
• Impeding access by an employee or member of the public to a city restroom facility that is consistent with and appropriate to that person's expression of gender identity;
• Limit participation by any city employee or member of the public in any city-sponsored activity because of the person's sexual orientation or gender identity in which they would otherwise be permitted to participate.

 You can access a full copy of the Executive Order here.

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When investigating a charge of discrimination, the EEOC has the authority to issue administrative subpoenas requiring employers to produce relevant information.  This power, however, is rarely used because most employers voluntarily comply with the EEOC's reasonable requests for information. 

In San Antonio, a law firm respondent is testing the EEOC's powers to require information be produced via administrative subpoena.  In EEOC v. Malaise law firm, the EEOC is seeking the names and addresses of employees working for the law firm as potential witnesses.  The request was made in connection with the Commission's investigation of a claim of sexual harassment.   The firm responded that this information was not relevant, constituted a fishing expedition, and invaded the privacy rights of nonparties   The EEOC persisted in its efforts to obtain the information and ultimately issued an administrative subpoena to the firm.  The law firm filed objections to the subpoena which the EEOC overruled (Yes, the EEOC gets to make the rulings on objections made to its subpoenas).  The law firm still failed to comply with the subpoena and the EEOC filed a Petition to Enforce the subpoena in the U.S. District Court. 

The interesting part about the fact the EEOC had to go to court to get this information is that the Commission's court filing shows some insight into how it goes about investigating charges of discrimination. You can read the EEOC's Petition to Enforce here and the affidavit in support of the petition (with all of the fun-to-read exhibits containing the charge and letters between the firm and EEOC)  here.

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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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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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