Employment Law Alert : Gibbons P.C.: Labor Relations, Employment Contracts, Employee Benefits, & Wrongful Discharge Lawyers & Attorneys

The EEOC’s focus on the protection of LGBT employees follows its April 2012 decision in Macy v. Holder, Appeal No. 0120120821 (April 20, 2012), about which we previously blogged, in which the EEOC determined that Title VII affords protection to these employees. The EEOC also takes the position that discrimination based on sex includes discrimination based on a failure "to conform to socially-constructed gender expectations."

Director Gigante cited the rise in pregnancy-related charges filed by older women and discussed the interplay between the Americans with Disabilities Act, the Americans with Disabilities Act Amendments Act, the Pregnancy Discrimination Act, and the Family Medical Leave Act in pregnancy-related discrimination claims. The EEOC is particularly interested in cases alleging failure to accommodate pregnant employees.

The panel also discussed disability discrimination and failure to accommodate claims, with a particular focus on no-fault attendance and fixed leave policies, both of which have been the subject of litigation by the EEOC. Employers should carefully review their attendance and leave policies to ensure that they do not run afoul of the anti-discrimination laws. Director Gigante emphasized that employers should determine the individual needs of the disabled employee in order to identify reasonable accommodation. While it is important to initiate the accommodation process to ensure compliance, Director Gigante noted that the employer need not accept the specific accommodation requested by the employee and that undue hardship to the employer remains a valid consideration.

With respect to recruitment and hiring, Director Gigante reiterated the EEOC’s continuing concern with facially-neutral pre-employment tests and requirements that have a disparate impact on employees belonging to a protected class. Moreover, employers can expect close scrutiny if they elect to use background checks and criminal history reports to screen applicants. It is critical that employers be familiar with the EEOC’s April 2012 guidance on the use of criminal background checks, including the need to perform individualized assessments, and with any state or local laws that may impose further limitations. In addition, the EEOC’s Plan specifies that it will specifically target a number of additional discriminatory recruitment and hiring practices, including exclusionary practices and policies, channeling/steering individuals into jobs due to their status in a particular group, and restrictive application processes.

For information on how employers can protect their businesses and comply with the law, or for an audit of workplace policies and practices, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.

Susan L. Nardone is a Director in the Gibbons Employment & Labor Law Department. Daniel A. Schleifstein, an Associate in the Gibbons Employment & Labor Law Department, co-authored this post.

In her suit, Young alleged, among other claims, that she was regarded as disabled and discriminated against under the ADA and further that UPS violated the PDA’s requirement that pregnant women be treated just as disabled or injured nonpregnant workers. As to the ADA claim, the Fourth Circuit concluded that Young could not demonstrate that she had a disability within the ADA’s definition, in as much as she could not prove that UPS regarded her as having an impairment that limited a major life activity. Moreover, her lifting limitation was merely temporary and the result of her pregnancy. (It is noteworthy that because the claim was filed prior to the ADA Amendments Act of 2008 (ADAAA), this aspect of Young’s case was decided under the pre-Amendments definition of disability.)

As to the PDA claim, the Fourth Circuit concluded that Young’s proposed reading of the PDA under the UPS facts would require the employer to treat pregnant employees differently than those similarly situated. Specifically, the Court found, UPS had a “pregnancy-blind policy,” that limited accommodations to those injured on the job, who were disabled under the ADA, or who had lost their Department of Transportation Certification. Simply put, the Fourth Circuit held “where a policy treats pregnant workers and nonpregnant workers alike, the employer has complied with the PDA.” Interestingly, the Court also concluded that a statement by a division manager to Young, to the effect that her pregnancy made her “too much of a liability” for the company, was not evidence of discrimination because the individual making the statement was not responsible for the decision to not allow Young the accommodation she requested.

As Young was unable to make out a case based on direct evidence of pregnancy discrimination, the court also considered her claim under the burden-shifting framework applicable to discrimination cases, and concluded that Young could not prove that she was similarly situated to employees whom UPS would accommodate under its policies. That is, she was not disabled under the ADA, had not become injured on the job, and had not lost her Department of Transportation certification. Accordingly, Young’s claim under the PDA failed under the burden-shifting analysis as well.

The legal issues related to pregnancy, disability, and accommodation are complex, and the Young decision, as noted above, does not contemplate Young’s status under the ADAAA, with which the courts are still grappling. For these reasons, despite the Fourth Circuit’s conclusions, employers should consider each pregnant (and nonpregnant) employee’s request for an accommodation on an individual basis. If you have questions regarding employer obligations under the PDA or ADAAA, please feel free to contact any of the attorneys in the Gibbons Employment & Labor Law Department.

Kelly Ann Bird is a Director in the Gibbons Employment & Labor Law Department.

Employers must obtain a signed acknowledgment from employees within 30 days of the employee’s receipt. It is the first of its kind for NJ employers to require employees to sign an acknowledgment of having received the notice. The notice must be posted and distributed in English and Spanish and in any other language the State has made the poster available -- if the employer reasonably believes the alternative language is the first language of a significant portion of its workforce.

Some Questions Remain

Employers may receive more guidance from the New Jersey Department of Labor and Workforce Development once it issues the form “notice” to be posted and distributed. The New Jersey Wage and Hour Law (WHL) provides for penalties for non-compliance. It is not clear whether a violation of this new law will trigger the standard penalties under the WHL. Also, it is not clear whether an employer’s failure to provide the notice could be used as evidence in litigation in support of a claim for higher damages.

Guidance for Employers

The notice and distribution requirement applies to employers with 50 or more employees. However, the New Jersey Law Against Discrimination, which prohibits gender-based discrimination in compensation and benefits in the workplace, applies to all employers. Title VII of the Civil Rights Act of 1964 and the Equal Pay Act, which similarly prohibit gender discrimination, have other thresholds. For example, Title VII applies to employers with 15 or more full or part-time employees. Although employers who are covered by these statutes may be exempt from the new posting requirement, employers still must comply with the federal and state anti-discrimination obligations.

Pay discrimination has become a hot issue. A recent, major initiative of both the Equal Employment Opportunity Commission and the equivalent state agencies has been to address compensation inequality based on gender. Employers should take the time in light of this new notice obligation to audit their compensation practices and systems (with counsel) to identify any disparities and/or prepare to defend against them if challenged through documentation and/or reasonable explanations.

Criminal Background Inquiries for Newark Employers

Effective November 18, 2012 based on a newly enacted Ordinance, employers of 5 or more employees who employ persons -- or take applications for employment -- in the City of Newark are generally prohibited from (1) conducting pre-application criminal background checks and inquiries and (2) denying employment based on the results of a criminal background check conducted post-offer unless the employer first conducted an individualized analysis of the criminal background using factors listed in the new Ordinance. An employer may discuss an applicant’s criminal background pre-offer if the applicant discloses his/her criminal history voluntarily and without solicitation. There exist some exemptions from the Ordinance, such as mandatory state and federal regulations requiring an employer to consider a criminal history for hiring decisions.

Requirements to Conduct Criminal Background Checks

An employer may not inquire about an applicant’s criminal background pre-offer unless it has made a “good faith determination that the relevant position is of such sensitivity that a criminal history inquiry is warranted.” If an employer conducts a criminal background check on an applicant post-application after a conditional offer has been made, the employer must provide the applicant prior notice and obtain an authorization to conduct the check (similar to an employer’s requirement under the state and federal Fair Credit Reporting Act). The notice also must inform the applicant that he/she will be afforded the opportunity to present evidence regarding the accuracy and relevance of the background check results.

Permissible Consideration by Employer

An employer may inquire about (1) convictions for up to 8 years from sentencing; (2) disorderly persons convictions or municipal ordinance violations for up to 5 years from sentencing; and (3) pending criminal charges (including cases continued without a finding prior to a dismissal). Certain exceptions exist for violent crimes.

Prohibited Actions

Employers may not inquire about, require a candidate to disclose or take any adverse action based on: (1) an arrest or criminal accusation not currently pending; (2) records which have been erased, expunged or subject to an executive pardon; and (3) a juvenile adjudication of delinquency or records which have been sealed.

Required Analysis to Use Criminal History for Hiring Decisions

An employer must consider the following factors when basing a hiring decision on a criminal background:

• The nature of the crime and relationship to the duties of the position;
• Information pertaining to the degree of rehabilitation and good conduct;
• Whether the job provides the applicant the opportunity to commit a similar offense;
• The length of time that elapsed since the offense; and
• A certificate of rehabilitation issued by a state or federal agency.

The employer is required to document its analysis of these factors using an “Applicant Criminal Record Consideration” form.

Notification to Applicant and Opportunity to Review Decision

If an employer makes a hiring decision based on an applicant’s criminal record history, it must notify the applicant of the rejection, provide the applicant a copy of the criminal record inquiry and a copy of the Applicant Criminal Record Consideration form. The employer also must state the reason for the adverse decision and include consideration of the factors listed above. Finally, the employer must advise the applicant of the opportunity to review the decision and the manner for the applicant to present evidence relevant to the employer’s consideration. The applicant has 10 days from receipt of the notification to respond. If an applicant timely responds, the employer must consider the applicant’s evidence prior to making a final decision. The employer must document the evidence received from the applicant as well as its final decision and notify the applicant of the final decision in a reasonable amount of time following receipt of the applicant’s evidence.

It remains to be seen how the new law will be enforced. For now, the Mayor of Newark is authorized to create an office of agency to implement and enforce the Ordinance. Penalties will range between $500 to $1000 per violation. However, the Ordinance does not address whether there exists a private right of action to enforce it.

These obligations will require employers to re-visit their background check procedures and hiring guidelines with regard to criminal backgrounds. It will take time to see how the Ordinance impacts the local economy of Newark.

For assistance with matters involving employee notices and criminal background checks, please contact an attorney in the Gibbons Employment & Labor Law Department.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department.

Impact on Employers

While the EEOC’s interpretation of Title VII is not binding in a court of law, the Courts often defer to it and therefore employers in both the public and private sector should take note of the Macy decision. In addition, while federal courts have taken different positions on the issue of transgender status discrimination, more recent decisions have agreed with the EEOC’s conclusions in Macy. Accordingly, employers should seriously consider revising their anti-harassment and discrimination policies so as to include gender identity and gender expression as protected characteristics. Moreover, employers should be aware of their own state discrimination laws that may address this issue. In New Jersey, for example, the Law Against Discrimination already prohibits discrimination based on one’s “gender identity or expression,” which is defined as “having or being perceived as having a gender related identity or expression whether or not stereotypically associated with a person’s assigned sex at birth.”

The attorneys in the Gibbons Employment & Labor Law Department are available to provide additional information and training with regard to employers’ efforts to maintain a discrimination and harassment-free workplace.

Michael J. Riccobono is an Associate in the Gibbons Employment & Labor Law Department.

Plaintiffs Failed to Establish a Common Policy of Discrimination

Justice Scalia declared that the “crux of this case is commonality.” In order to commence a federal class action, the named plaintiffs must satisfy the requirements of Federal Rule of Civil Procedure 23(a) by demonstrating that “there are common questions of law or fact” as to all potential class members.

To determine whether plaintiffs could meet the “commonality” standard, the Court scrutinized whether the plaintiffs could demonstrate that Wal-Mart “operated under a general policy of discrimination.” The Court noted that plaintiffs “wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer to the crucial question why was I disfavored.”

After making a detailed analysis of Plaintiffs’ proofs, which consisted largely of statistical evidence about pay disparities, anecdotal reports of discrimination, and sociological testimony from plaintiffs’ expert, the Court held that those proofs failed to identify a “specific employment practice” that resulted in discrimination against women employees, “much less one that ties all their 1.5 million claims together.” Indeed, the only corporate policy that plaintiffs’ evidence convincingly established was “Wal-Mart’s ‘policy’ of allowing discretion by local supervisors over employment matters.” The Court went on to state that “[o]n its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices.” As there was no “convincing proof of a companywide discriminatory pay and promotion policy,” the five-justice majority concluded that plaintiffs had failed to establish “any common question” to satisfy Rule 23(a) and that class certification was therefore improper.

Claims for Backpay Cannot Be Certified Under Rule 23(b)(2)

The Court also unanimously ruled that the District Court improperly certified plaintiffs’ claims under Federal Rule of Civil Procedure 23(b)(2). Rule 23(b)(2) allows a class to be certified if the employer “acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.”

The Court noted that one possible reading of Rule 23(b)(2) is that “it applies only to requests for injunctive or declaratory relief and does not authorize the class certification of monetary claims at all.” Notwithstanding, the Court did not need to reach that broader question because it found that “claims for individualized relief (like the backpay at issue here) do not satisfy the rule.” The Court stated that:

Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of money damages.

The Court further reasoned that a class claim for money damages (such as individualized backpay) would fall under Rule 23(b)(3), which requires additional procedural protections, such as mandatory notice and the choice to opt-out. The Court cautioned that a class action for money damages without notice (such as classes certified under Rule 23(b)(2)) could potentially violate the due process clause of the Constitution.

The Impact of Wal-Mart v. Dukes

While the Dukes opinion is clearly a victory for employers, it remains to be seen what its practical impact will be.

National employers that permit local managers to exercise discretion with respect to hiring, firing, promotion, and compensation can take some comfort in the fact that potential class action plaintiffs must now establish sufficient proof of a common policy or practice in order for class certification to be granted. The Dukes decision makes clear that such a policy cannot easily be established via statistical evidence about pay disparities, anecdotal reports of discrimination and/or sociological testimony. Going forward, plaintiffs will not meet their burden by simply alleging or pleading the existence of such a policy -- they must be able to demonstrate its existence.

Although the Dukes decision sets a high bar for class action plaintiffs seeking to establish a common policy or practice, the decision does not prevent employment claims from being litigated on a class basis. Although the high hurdle for class certification may result in the end of nationwide employment class actions where no nationwide policy relating to employment matters exists, it may simultaneously produce an uptick in regional or local class actions, in which the decision-making of local managers and local policies and procedures are scrutinized on a regional or area basis.

Employers -- particularly those with nationwide operations -- should consult with their employment counsel regarding the impact of the Dukes ruling. In order to most effectively defend against potential class action employment litigation, employers should ensure that they not only adopt effective, written equal employment opportunity policies prohibiting workplace discrimination, but also consistently train managers on these policies.

If you have any questions regarding the Dukes decision or its impact on your business, please feel free to contact any of the attorneys in the Gibbons Employment Law Department.

Peter J. Dugan is an Associate in the Gibbons Employment Law Department. Kristin D. Sostowski, a Director in the Gibbons Employment Law Department, assisted in the preparation of this post.

The Lucchesi Case

In Lucchesi, No 10-4164 (E.D. Pa. Apr. 21, 2011), the plaintiff sued his former employer alleging he was unlawfully terminated based upon his gender, as well as in retaliation for challenging the fairness of Day & Zimmerman’s handling of a dispute between himself and a female colleague with whom he had engaged in a consensual sexual relationship. During his employment, plaintiff was informed by two human resources officers that his co-worker felt “uncomfortable” in his presence, and that she had complained about text messages and emails she received from the plaintiff on her personal phone and email accounts. The plaintiff then complained to Day & Zimmerman’s senior vice president of Human Resources “that he felt that he was being treated differently than his female co-worker in the company’s ‘investigation’ into her complaint,” noting that one HR officer had spoken to his female co-worker in connection with her complaint, whereas Plaintiff had been “interrogated” by two. Roughly four days after his meeting with HR to discuss these issues, Plaintiff was terminated. According to Plaintiff, one of the HR officers who had spoken with him allegedly told him that the reason he was being terminated was because he might “walk past [the female co-worker’s cubicle],” and this possibility of future interaction between the two created a “gray area” for the company. Plaintiff’s Complaint also excerpted an email from Day & Zimmerman’s counsel to Plaintiff’s previous counsel, in which Day & Zimmerman’s counsel allegedly asserted that Plaintiff was being terminated because he had “admitted to . . . conduct . . . that could be construed as harassment or stalking,” and also because the two HR officers had objected to Plaintiff’s “tone” during their conversation.

In denying Day & Zimmerman’s motion to dismiss the Complaint, which alleged gender discrimination in violation of the Pennsylvania Human Rights Act and Title VII of the Civil Rights Act of 1964, the court held that the facts “raise[d] a reasonable expectation that discovery will reveal evidence of discriminatory animus.”

Practice Tips

Employers who do not already have a policy regarding office-relationships should adopt and implement one, and those who already do, should periodically review and disseminate it. At a minimum, such a policy should require timely and discrete disclosure of the existence (or termination) of a romantic or sexual relationship to a designated member (or members) of company management or Human Resources. This is especially important when the employees involved are in a supervisor/subordinate relationship. Mandatory disclosure allows the employer to address the impact of the relationship proactively, such as whether it is necessary to alter reporting structures or change job responsibilities.

To discuss your company’s policy needs, contact any attorney in the Gibbons Employment Law Department. And watch for more posts on training and information about exciting new Gibbons educational programs on this blog.

Michael J. Riccobono is an Associate in the Gibbons Employment Law Department.

In a February 8, 2011 decision by Judges Graves, Messano and Waugh, the Appellate Division initially held that “[o]nce the jury awarded plaintiff compensatory damages as a result of defendants’ violation of the LAD, the particular conduct of defendants in this case warranted submission of the punitive damages claim to the jury.” Next, the court considered whether the jury’s response to the interrogatories on the verdict altered its initial impression. The Court noted that the jury interrogatory concerning the intentional infliction of emotional distress claim incorporated language that was not even an essential element of that cause of action. Defendants argued that the language, which was more closely akin to the standard for an award of punitive damages under the Punitive Damages Act (the PDA), N.J.S.A. § 2A:15-5.9 to -5.17, was intended as a “bridge question” and was “designed to incorporate within its terms the requisite state of mind necessary to support an award of punitive damages.” According to Defendants, “the jury’s negative answer to [the question] means that plaintiff had failed to prove defendants had acted with ‘actual malice or. . .wanton and willful disregard’ of potential harm so as to support any award of punitive damages.” The Court rejected this argument, finding it both “confusing and unpersuasive” and holding that the jury’s response to the interrogatory “cannot be interpreted as a factual finding that defendants did not act with the requisite mental state to support an award under the PDA.”

At first glance, this case appeared more significant than is actually the case. The unique circumstances presented, and particularly the poorly worded jury interrogatory, clearly guided the outcome, and it seems unlikely that the same set of facts would occur in future matters. While the case stands for the proposition that the absence of an emotional distress award does not in and of itself preclude further proceedings on punitive damages, it remains within the province of the Court to dismiss a claim for punitive damages based on the facts presented at trial, even when the jury finds liability. From the Court’s decision, it appears that this has always been the law and remains the law today.

Susan L. Nardone is a Director in the Gibbons Employment Law Department.