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

In a discrimination case it is very important to determine whether the plaintiff is alleging direct or circumstantial evidence of discrimination.  This is important because the standard by which a court determines if the case should proceed to trial or not depends on this determination. In Jackson v. Cal-Western Packaging Corp., the U.S. Court of Appeals for the Fifth Circuit applied the Circuit's test for determining whether an age-related comment constitutes direct evidence of discrimination or is merely a stray remark that may constitute circumstantial evidence of discrimination. 

Jackson, a sixty-nine year old employee, had his employment separated following an internal and external harassment investigation that resulting in a determination that he violated the company's anti-harassment policy.   He brought suit alleging that he was terminated because of his age.  His primary piece of evidence supporting his claim was a comment the decisionmaker allegedly made a year earlier.  According to Jackson, the decisionmaker told another coworker that Jackson was an "old, gray-haired fart" and that the coworker would be in charge when Jackson retired.

As the Court reiterated, to constitute direct evidence of discrimination the comment must 1) relate to the protected class of persons that the plaintiffs belongs; 2) be proximate in time to the complained of adverse employment action; 3) made by a person with authority over the employment decision at issue; and 4) relate to the employment decision at issue. Because the comment was made more than a year before Jackson's termination and did not relate to the decision at issue, the court held the comment did not constitute direct evidence of age discrimination. 

Absent direct evidence of age discrimination Jackson was forced to prove, by circumstantial evidence, that the company's stated reasons for his termination were false or untrue.  Stated another way, he had to show that the company did not reasonably believe that he violated the anti-harassment policy (sometime referred to as the "honest belief rule").  Given that the company conducted both internal and external investigations and that witnesses of both sex corroborated the claims made against Jackson, there was no evidence that the company did not reasonably believe that he violated the anti-harassment policy nor evidence that the company's stated reasons for terminating Jackson's employment were false.  Consequently, the Court affirmed the judgment in favor of the employer.

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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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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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