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

Last week the Supreme Court of Texas granted a Petition for Review to hear the case of Mission Independent School District v. Garcia.  While the petition for review has three issues (issue four was not challenged by the respondent), only one is relevant to private employers.  The school district argues for a bright line rule that if the plaintiff-employee is replaced by someone older than he is, there can be no state age discrimination claim as a matter of law.  As worded by the School District, whether a plaintiff can establish a prima facie case of age discrimination when plaintiff-employee's replacement is older than the plaintiff.

In Garcia, Ms. Garcia worked for the School District for 27 years.  She sued her former employer (and the individual supervisor) for a variety of alleged discrimination (i.e., the kitchen sink approach) including age discrimination.  The School District challenged Garcia's claim through a plea to the jurisdiction which entitles a governmental employer to an interlocutory appeal (i.e., during the pendency of the case rather than after final judgment).  It is in this procedural posture that the case reached the Supreme Court of Texas.  The substance of the School District's argument is that because Garcia's replacement was three years older than she was, she cannot make out a prima facie case of age discrimination as a matter of law. The School District's argument seems logical, but Courts rarely like to adopt bright-line rules in employment discrimination cases.  The case is scheduled for oral argument on January 10, 2012 and a decision is expected before the end of September.

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Yesterday, the Supreme Court of Texas heard oral argument in two employment cases.

In El Apple I, Ltd. v. Olivas, (No. 10-0490), the Court is considering whether detailed lodestar attorney fee calculation is required with breakdowns for each specific task.  Also under consideration is whether appellate fees should be calculated in advance or only upon remand from appeal.  You can access a video of the oral argument here.

I've written before about the Prairie View A&M University v. Chatha case, which I believe was wrongly decided by the court of appeal.  (post here).  In Chatha (No. 10-0353), the Court is considering whether the statute of limitations on an employee's complaint of discriminatory pay commences on the date the decision is communicated to the employee or on the date the paycheck reflecting the allegedly discriminatory pay decision is issued to the employee. You can watch the video in Chatha here.

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Pre-game preparations are underway for the first Monday in October when the U.S. Supreme Court will commence its 2011-12 Term.  Here are the employment-related cases that are expected to be decided this Term.

Hosanna-Tabor Church v. EEOC (10-553)  To decide whether the ministerial exception, which prohibits most employment-related lawsuits against religious organizations by employees performing religious functions, applies to a teacher at a religious elementary school who teaches the full secular curriculum, but also teaches daily religion classes, is a commissioned minister, and regularly leads students in prayer and worship.— (to be argued Oct. 5, 2011)

Coleman v. Maryland Court of Appeals (No.10-1016) To decide whether Congress constitutionally abrogated states’ Eleventh Amendment immunity when it passed the self-care leave provision of the Family and Medical Leave Act. 

Knox v. SEIU (No. 10-1121) To decide whether (1) a State, consistent with the First and Fourteenth Amendments, condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a notice that includes information about that assessment and provides an opportunity to object to its exaction and (2) a State, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures?

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I keep reading reports that Wal-Mart v. Dukes, where the Court reversed a class certification including 1.5 million women (who worked all over the U.S. under different supervisors at different stores) that was based on the company giving supervisors too much discretion, 125 anecdotal stories and an expert report employing dubious social framework analysis, demonstrates that the Court has a pro-business slant.  (Examples here, here and here).  These articles are prompted largely by the Senate Judiciary hearing held June 29, 2011 entitled "Barriers to Justice and Accountability: How the Supreme Court's Recent Rulings will Affect Corporate Behavior."  I disagree that the Court has a pro-business bias in employment discrimination, harassment and retaliation cases.

In the four employment cases heard this term, the Court found for the employee/plaintiff on three of those cases --all retaliation cases.  For example, in Kasten the Court held that employees can engage in FLSA-protected activity by making complaints orally rather than just in writing.  In Thompson, the Court held that an employee who has never engaged in Title VII protected activity can bring a retaliation claim if they are closely associated with another that has engaged in protected activity.  Finally, in Staub, the Court held that an employee can maintain a USERRA retaliation case even where the decision maker is unaware of the employee protected activity if the plaintiff can show that

Dukes is an example of a case that should have never been certified as a disparate treatment (i.e., intentional discrimination) case in the first place.  Nothing more; nothing less.  In fact, Dukes was more of a procedure case than it  ever was an employment discrimination case.  Certainly, it is not proof that the Supreme Court has a pro-business bias.

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The U.S. Supreme Court has issued the last of its employment-related decisions for the 2010-11 Term.  Here is a brief summary of the labor and employment cases decided this term.

• Kasten v. Saint-Gobain Performance Plastics Corp., (No. 09-834) (holding that an employee has engaged in protected activity under the FLSA even if his only complaint is an oral complaint)  (post here; opinion here).
• Thompson v. North American Stainless, (No. 09-291) (recognizing that an employee who never engaged in protected activity can bring a Title VII retaliation claim when that person suffers an adverse employment actions because of his association with another that has engaged in protected activity)  (post here; opinion here).
• Staub v. Proctor Hospital,  (No. 09-400) (USERRA case holding that where a decisionmaker is unaware of the employee's protected activity, but is motivated by or influenced by another who does have knowledge of the protected activity, the plaintiff may be able to prove a cause of action under a "cat's paw" theory of discrimination) (post here; opinion here).
• Dukes v. Wal-Mart, (No10-277) (Holding that trial court improperly certified class of 1.5 million current and former female employees' discriminatory pay and promotion case because plaintiffs failed to show a common policy or practice (other than a policy of vesting manager with broad discretion) that resulted in the alleged discrimination and improperly certified class claims for back pay relief)  (opinion here).
• AT&T Mobility LLC v. Concepcion, (No. 09-893) (holding that parties may enter arbitration agreements that preclude the arbitration of disputes on a class action basis)  (opinion).

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Earlier this week the Dallas Court of Appeals rejected an employee's attempt to create a new wrongful termination cause of action.  In Martin v. Clinical Pathology Lab., Joyce Martin sued her employer for terminating her employment after she requested time off to vote in the November 2008 General Election.  According to her petition, Martin alleged that she:

[W]as a loyal and competent employee of Defendant for three (3) years. On November 4, 2008, Plaintiff requested permission to go vote in the general election so she could cast her vote for the President of the United States and other offices. Defendant refused. Plaintiff left work fifteen minutes early (at 5:15 p.m[.] ) to go vote for change in this country before the polls closed at 7:00 p.m. On November 6, 2008, Defendant terminated Plaintiff.

The question presented in the appeal was "whether an at-will employee who leaves work early to vote in an election and who is subsequently terminated has a private cause of action for wrongful termination."  In keeping with the general rule in Texas that common law exceptions to the employment at-will doctrine should be made by the Supreme Court of Texas, and not the intermediate appellate courts, the Dallas Court of Appeal refused to recognize this new wrongful termination cause of action.

You can download a full copy of the opinion here.

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The Supreme Court of Texas has agreed to hear the case of In re Frank Kent Motor Co. d/b/a Frank Kent Cadillac, No. 10-0687.  In that case, the Fort Worth Court of Appeals denied the employer's application for writ of mandamus and refused to overrule the trial court's decision not to enforce/honor an agreement between the employer and employee to resolve all disputes in with a trial sitting without a jury (i.e., a bench trial). 

I've advocated the use of jury waivers by Texas employers because I think they can provide many of the advantages of arbitration at less cost (see posts here and here).  However, the thing I found most interesting about this case is that it involved the same agreement that only six months after the Fort Worth Appellate Court order effectively denying enforcement, the Fort Worth Appeals Court enforced by way of mandamus.  See post here.  The only meaningful differences in the two cases are the identity of the plaintiff-employee and the members of the Court that decided the two cases.  Two of the three Fort Worth Justices participated in both cases.  Justice Meiers, however, wrote the opinion conditionally granting mandamus relief and thereby effectively enforcing the agreement.  He was not on the panel that denied the application for mandamus in the case accepted by the Supreme Court.  Oral argument at the Supreme Court will be scheduled in Austin later this year and an opinion expected in the next 12 months. 

If you are a Texas employer and want to learn more about effective use of jury waiver, feel free to drop me an e-mail.

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Don Cruse at The Supreme Court of Texas Blog reports that the Court has agreed to determine whether a plaintiff making a Sabine Pilot claim (i.e., alleging that he or she was terminated solely for refusing to perform an illegal act) can recover exemplary damages.

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The U.S. Supreme Court recently considered the circumstances when an employer may be liable for employment discrimination based on the unlawful, discriminatory animus of an employee who influenced, but did not make, an ultimate employment decision.   This theory is commonly referred to as the Cat's Paw theory derived from fable about the monkey who convinces the cat to reach into the fire to pull out the roasting chestnuts.  The cat gets burned while the monkey makes off with the chestnuts.  In discrimination cases, the Cat's Paw theory refers to a situation where a supervisor with a discriminatory animus who influences, but does not make, the adverse employment decision.

The facts of Staub are straight forward.  In Staub, the employee complained that several of his direct supervisor were hostile to his reserve military service that periodically required him to miss work.  The employee complained that this hostile supervisors wrote him up on several occasions that were motivated by his military service.  Specially, Staub's direct supevisor issued him a corrective action for violating a company rule requiring him to stay in his work area when he was not working with a patient.  Several months later, a co-worker complained that Staub's frequent availablility.  On another occasion, the hostile supervisor reported that Staub had left his workstation without permission in violation of the earlier corrective action.  A hospital executive, whom had no discriminatory animus, reviewed Staub's file and made the decision to terminate his employment; at least in part on information contained in the file that was initiated by Staub's direct supervisors (and whom allegedly had discriminatory intent).  Staub appealed his termination through the hospital's grievance procedure but the decision stood.  Staub won at trial, but on appeal, the Seventh Circuit Court of Appeal reversed holding that since there was no evidence that the ultimate decisionmaker had a discriminatory animus, Staub could not hold the hospital liable for the discriminatory animus of a supervisor who was not the ulimate decisionmaker. 

The Supreme Court reversed the court of appeals.  As the Court stated, "If the employer's investigation results in an adverse action for reasons unrelated to the supervisor's original biased action . . . then the employer will not be liable."  However, "the employer is at fault [when] one of its agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision."  The core holding of the opinion is that "if a supervisor performs an act motivated by [discriminatory] animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under [the law]."

Staub substantially expands the scope of situations where employers can be held liable for discrimination based on the acts of nondecisionmaker supervisors. You can access a full copy of Staub v. Proctor Hospital here.

What others are saying about Staub.

Mrs. Palsgraf and the Cat's Paw Doctrine

With a Friend Like Justice Scalia . . . Cat's Paw Decision Not Very Employer Friendly

The Supreme Court Upholds Cat's Paw Theory of Liability in Anti-Military Discrimination Case

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I've written several posts advocating the advantages of employer's use of waivers of jury trials to resolve employment disputes with employees.  (See posts here and here).  To recap, the mutual waiver of jury trial provides the employer and employee a fair way to resolve employment disputes without some of the disadvantages that other forms of alternative dispute resolution present.  The Fort Worth Court of Appeals recently enforced an employer's agreement with its employee to waive the jury trial of any disputes between them.  

In In re Frank Kent Motor Company, the Court of Appeals found that the waiver of jury trial provisions contained in the employer's handbook, and that the employee was aware of, was enforceable even though the employee argued he did not sign the acceptance of the waiver knowingly, voluntarily or intelligently.  The employee argued that his acceptance of the policy was not knowing and voluntary because he feared he would lose his job if he did not sign the agreement; he wasn't represented by a lawyer when he signed; he refused on two prior occasions to sign the agreement; the agreement was not negotiated and the employer indicated no willingness to negotiate changes; and his supervisor told him he had no choice but to sign the agreement.  Despite these allegations, the Court of Appeals found the allegations insufficient to overcome the presumption that the agreement was knowingly and voluntarily accepted. 

You can find a copy of the full opinion in In re Frank Kent Motor Company here.

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The Supreme Court of Texas has agreed to hear argument in two employment cases. 

In Prairie View A&M University v. Diljit K. Chatha, (No. 10-353) the Court agreed to consider whether the 180-day statute of limitations for a government employee’s complaint about discriminatory pay begins from the date of the first paycheck reflecting the decision or the (earlier) date on which the employee was informed of the decision.

In El Apple I, Ltd. v. Myriam Olivas, (No. 10-0490), the Court will consider the appropriate manner of calculating attorney's fees of a prevailing party in a discrimination case.   

H/T to the Supreme Court of Texas Blog.

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The U.S. Supreme Court announced that employees, who never engaged in protected activity, can bring third-party retaliation claims against their employers when they suffer an adverse employment action due to their connection with a person who has engaged in protected activity.

The facts of Thompson v. North American Stainless are straightforward.  In February 2003 North American Stainless was advised by the EEOC that Miriam Regalado filed a sex discrimination charge of discrimination against it.  Three weeks later, Regalado's fiancee, Eric Thomas, was terminated.  Thomas filed a charge of discrimination of his own alleging that he was fired in retaliation because his fiancee filed a charge of discrimination.  The EEOC found that Thomas had been retaliated against and issued a right to sue letter when conciliation was unsuccessful.

When the case reached the trial court, the judge dismissed the suit finding that Title VII did not recognize third-party retaliation claims.  Because the case was decided on a motion to dismiss (prior to any discovery), the reviewing courts were required to take Thomas' allegation as true (i.e., that he was in-fact, terminated for his fiance's charge of discrimination).  The Sixth Circuit Court of Appeals affirmed the dismissal for a different reason.  The Sixth Circuit concluded that Thomas never engaged in protected activity because he didn't filed a charge on his or his fiance's behalf prior to his termination and therefore he couldn't bring a retaliation claim.

The U.S. Supreme Court reversed.  Justice Scalia wrote, in a unanimous opinion (Kagan not participating) that the Court has little trouble concluding that if Thomas was fired because his fiancee filed a charge of discrimination, then he has a claim under the anti-retaliation provisions of Title VII.  The Court refused, however, to provide a bright line test as to which third-parties might have a claim stating:

We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize. . .   The significance of any given act of retaliation will often depend upon the particular circumstances.

 In holding that Thompson had a claim, the Court next concluded that Thompson had standing to sue.  The Court held that a plaintiff within the zone of interest sought to be protected by Title VII (i.e., protecting employees from unlawful actions of employer), has standing to bring a claim against his employer even though the employee had not engaged in protected activity himself.  The Thompson opinion clearly expand the scope of potential plaintiffs that can bring claims against their employers regardless of whether or not they engage in protected activity.

You can read the full opinion here. 

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It is pretty difficult for a party to get an adverse arbitration award reversed or vacated.  A recent Dallas Court of Appeals decision shows the rare instance were such a reversal occurred.  In Alim v. KBR (Kellogg, Brown & Root) --Halliburton, the Dallas court held that an arbitrator's failure to disclose, in an employment discrimination, breach of contract and retaliation case, that he had served as an arbitrator in a prior case involving KBR's party representative and a related company established facts that might create a reasonable impression of the arbitrator's partiality.  Consequently, the court vacated the adverse arbitration award and remanded for a new arbitration proceeding.  You can access the court's opinion here.

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Employers often consider asserting counterclaims against employees who file lawsuits against them.  Most lawyers representing employers counsel against filing counterclaims except in exceptional cases (e.g., an employee’s theft of trade secrets or breach of a covenant not to compete). However, where an employer pays an employee valuable severance benefits in return for a release or a covenant not to sue, the employer may consider avenues to recoup the benefits paid to a former employee who breaches that agreement and sues the employer.  A recent opinion from the Fifth Circuit explains an employer should not generally seek a set-off against damages in a claim seeking unpaid wages or overtime under the Fair Labor Standards Act (FLSA) in the FLSA action. 

In Martin v. Pepsi, Martin was an hourly route settlement clerk for Pepsi for approximately five years. During this time she was paid overtime for the hours she worked in excess of forty hours per week. She was promoted to route settlement supervisor and her manner of compensation was changed to a weekly salary. When Martin was laid off she was provided with nearly $23,000 in severance payments in return for a complete release of claims and a promise not to file any lawsuits or other claims against Pepsi arising from her employment or termination of employment.  After pocketing the severance money, Martin sued Pepsi for unpaid overtime under the FLSA and asserted state law claims for fraudulent misrepresentation and punitive damages under state law. Pepsi moved to dismiss Martin’s claims arguing that the trial court lacked jurisdiction. The crux of the argument was that because Pepsi was entitled to an off set for the severance payments made to Martin due to her broken promise not to sue Pepsi and the amount of the set-off exceeded the unpaid overtime and liquidated damages Martin could recover, there was no controversy for the court to decide. The trial court agreed and dismissed Martin’s case. 

In reversing the trial court’s dismissal, the Fifth Circuit held that counterclaims seeking damages or set offs against recovery in FLSA cases are not permitted unless the money being set-off can be considered wages that the employer pre-paid to the plaintiff-employee. In Martin, the money that was sought to be set-off against the FLSA overtime was the severance benefits paid in return for a release of claims.

Martin does not appear to foreclose an employer’s ability to maintain a state court lawsuit for breach of contract arising from an employee’s breach of a contract not to sue in return for severance payments. For example, the employer might sue for recession to have the plaintiff return any severance benefits paid to him or for the attorney’s fees and costs incurred in defending a lawsuit the plaintiff promised he would not file. What is clear is that a counterclaim in the FLSA suit or an affirmative defense seeking a set off against FLSA damages is not the proper way to seek a return of the severance benefits paid to a plaintiff who promised not to sue the employer.

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The Fort Worth Court of Appeals ruled that the provisions of the federal Lilly Ledbetter Fair Pay Act of 2009 extending the charge filing deadlines for certain pay discrimination claims should not be automatically applied to pay discrimination claims arising under state law.

In Tarrant Regional Water District v. Villanueva, Tamara Villanueva brought suit against the the District for gender-based pay discrimination arising from her failure to receive a five percent pay increase she believed she was entitled.  After being given only a four percent increase in pay, Villanueva hired an attorney who threatened the District  with a gender-based pay lawsuit.  Additionally, immediately after being informed that she would not receive the five percent raise she requested, she started forwarding portions of the District's employment policies from her work e-mail account to her personal e-mail account. 

More than 180 days after Villanueva began forwarding copies of the employment policies to her personal e-mail account and her lawyer's transmission of the demand letter to the District, she filed a charge of discrimination with the Texas Workforce Commission's Civil Rights' Division.  She admitted in her deposition, which was filed along with the District's plea to the jurisdiction (similar to a motion to dismiss), that she believed she was being discriminated against on the basis of her gender more than 180 days prior to filing her charge of discrimination.  Ordinarily, this would render her claim under state law untimely.

The District challenged the court's jurisdiction to hear the pay discrimination part of her lawsuit.  The trial court denied the District's plea to the jurisdiction.  On appeal, the District argued that the trial court lacked jurisdiction over the the pay discrimination claim because Villanueva failed to file her administrative complaint within the required 180-day period  after the District committed the unlawful employment practice.  Villanueva countered that the passage of the federal Lilly Ledbetter Fair Pay Act of 2009 should be automatically read into the Texas Labor Code prohibitions against pay discrimination thereby rendering her claim timely. 

The Fort Worth Court of Appeals rejected Villanueva's argument for several reasons.  First, the Texas Legislature considered amending the Texas Labor Code during its 2009 session to incorporate the provisions of the Lilly Ledbetter Act.  That bill was never passed.  Second, when Congress has amended provisions of other federal anti-discrimination laws such as the ADA (amended by the ADA Amendments Act), the Texas Legislature passed similar legislation to adopt or incorporate the changes in federal law.  The appeals court summarized the basis for its holding by stating, "while we are guided by analogous federal statutes and the cases interpreting them, we see no reason to write automatic incorporation language into Chapter 21 [the Texas Commission on Human Rights Act] when out legislature has shown that it knows how to amend the chapter when it wants to include specific federal provisions."  Consequently, the court of appeals held that Villanueva's pay-discrimination claim was untimely and should be dismissed.

The Villanueva opinion sets up a split of authority among the Texas courts of appeals.  This split may find its way to the Texas Supreme Court for resolution.  See Houston Court of Appeals Says Ledbetter Act Applies to Texas State Law Claims.  Without attempting to predict how the Supreme Court of Texas will resolve the case, I believe the Fort Worth Court's analysis is the proper one.  Meanwhile, the Texas Legislature starts its session in several weeks.  A state law Lilly Ledbetter bill is likely to be reintroduced this Legislative Session.

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The Texas Supreme Court held that unilateral contracts can be formed with at-will employees when employers make promises to employees and those employees perform based on that promise.  In Vanegas v. American Energy Services, Inc. the Supreme Court was asked to decide the enforceability of an employer's alleged promise to pay five percent of the proceeds of a sale or merger of the company to employees who were still employed at the time of the merger.  The alleged promise arose in the context of a period when the company was performing poorly and the employees were complaining about working long hours with antiquated equipment. 

According to the Court's opinion, a vice-president of the company, in an effort to encourage employees to stay with the company, promised those original employees (of whom there were eight) that if they stayed with the company, they would be paid five percent of the value of any sale or merger.  When the company was sold, the seven remaining employees demanded their share of the proceeds.  The company refused and the employees sued.

The company argued that because the employees were at-will, any promise to pay those proceeds to the employees was illusory and unenforceable because the employer could have avoided the promise by firing the employees at any time.  The employees argued that the promise represented a unilateral contract that, once performed, became a binding enforceable obligation on the part of the employer.

The Court agreed with the employees and held that where an employer makes a unilateral promise to an at-will employee and the employee performs, a binding contract is formed upon that performance.  

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Manpower has published its most recent research on jury verdicts and the news is not good for employers.  According to a summary of the full report:

• Employers won the lowest percentage of discrimination jury trials this decade; only 39 percent.  Employers won on 33 percent of age cases and 52 percent of disability discrimination cases.  Expect employer's winning percentage to decrease in disability discrimination cases in the next years as post-ADAAA cases make their way to juries.
• Age discrimination cases result in the largest verdicts followed by disability, sex and race.
• Employers are better off in federal court than state court.  Employers won 43 percent of the cases in federal court versus only 37 percent in state court.  The median federal jury award was also lower at $164,925 v. $270,000 in state court.
• Median settlement rose to the highest this past decade at $90,000.

Several reasons may explain Manpower's most recent findings.  First, the economy, and juror attitudes may be affecting outcomes.   In my two most recent jury trials this year, there was a significant number of potential jurors who were either out of work or had a close family member who was unemployed.  With the national unemployment rate topping 10 percent, the increase in the unemployment rate may signal that there are more prospective jurors who may sympathize with an unemployed plaintiff-employee. 

Second, in a poor economy, some employers may choose to try cases they might have settled in the past.  Some employers may elect to try those cases that can be tried to verdict for less than they can be settled.   This may be a fiscally sound decision only in the short term or if the employer prevails at trial.

Finally, the results may reflect the fact that employers are having to try tougher cases to defend.  In any event, Manpower's research suggests that juror attitudes in employment discrimination cases are swinging in favor of plaintiff-employees and against employers.

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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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By now most of  you have read or heard that President Obama nominated Sonia Sotomayor for the U.S. Supreme Court to replace Justice David Souter.  Judge Sotomayor is currently an appellate judge on the U.S. Court of Appeals for the Second Circuit based in New York.  She also served on the federal district bench before joining the Court of Appeals.  The following links are useful to anyone who wants to get up-to-speed on Judge Sotomayor and her judicial philosophy.

• Michael Fox has done a good summary of Judge Sotomayor's appellate opinions in employment cases.  You can find that summary here.
• The Supreme Court of the United States Blog has done a comprehensive review of Judge Sotomayor's civil opinions.  You can find a four part review of those opinions at Part 1, Part 2, Part 3 and Part 4.  For extra credit, here is the blog's summary of Judge Sotomayor's civil opinions with dissents (here).
• The WSJ.com discusses what effect, if any, Judge Sotomayor's diabetes might have on the confirmation process.  The article can be found here.  The WSJ.com also has views of Judge Sotomayor's appointment from commentators on the Left and Right.

Given that Judge Sotomayor has twice obtained Senate confirmation, most commentators are expecting that her appointment will be confirmed.  

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