Color-blind employment practices

The Word on Employment Law has an interesting post this morning about the effect of color on the Presidential election. Note that I said color, and not race. Under Title VII (and Ohio's parallel employment discrimination statute) it is illegal to make an employment decision because of "color." How, exactly, is color different than race?

The EEOC gives us some guidance in its Compliance Manual on Race and Color Discrimination. "Color" means:

pigmentation, complexion, or skin shade or tone. Thus, color discrimination occurs when a person is discriminated against based on the lightness, darkness, or other color characteristic of the person. Even though race and color clearly overlap, they are not synonymous. Thus, color discrimination can occur between persons of different races or ethnicities, or between persons of the same race or ethnicity.

The EEOC also provides some hypothetical examples of color discrimination:

• An African American employer violates Title VII if she refuses to hire other African Americans whose skin is either darker or lighter than her own. For example, it would be an act of unlawful color discrimination for an employer to refuse to hire a dark-skinned person to work at a cosmetics counter because the vendor prefers a "light skinned representative."
• A dark-complexioned African American manager violates Title VII if he frequently makes offensive jokes and comments about the skin color of a light-complexioned subordinate. This example is based on the EEOC's settlement of a claim against Applebee's.

Moreover, the EEOC's E-RACE Initiative is targeting these types of claims for special enforcement efforts:

Color discrimination in employment seems to be on the rise. In Fiscal Year 1992, EEOC received 374 charges alleging color-based discrimination. By Fiscal Year 2006, charge-filings alleging color discrimination increased to 1,241. A recent study conducted by a Vanderbilt University professor "found that those with lighter skin earn on average 8 to 15 percent more than immigrants with the darkest skin tone -- even when taking into account education and language proficiency. This trend continued even when comparing people of the same race or ethnicity." Similarly, a 2006 University of Georgia survey revealed that a light-skinned Black male with only a Bachelor's degree and basic work experience would be preferred over a dark-skinned Black male with an MBA and past managerial positions. However, in the case of Black female applicants seeking a job, "the more qualified or experienced darker-skinned woman got it, but if the qualifications were identical, the lighter-skinned woman was preferred."

While these claims are still rare, it is significant that EEOC charges of color discrimination have risen more than 330% since 1992. Moreover, the EEOC's E-RACE initiative calls for stepped up enforcement in this area.

It may not be a defense to a discrimination claim that two African American employees were treated differently if one is light complexioned and the other is dark complexioned. For employers, it's important to keep in mind that color discrimination is illegal, and is different than race discrimination.

It's a Discriminatory World After All - Sikh sues Disney for banning his turban

I am a Sikh man and the turban that I wear is a religiously-mandated article of clothing. My supervisor tells me that my turban makes my coworkers "uncomfortable," and has asked me to remove it. What should I do?

If a turban is religiously-mandated, you should ask your employer for a religious accommodation to wear it at work. Your employer has a legal obligation to grant your request if it does not impose a burden, or an "undue hardship," under Title VII. Claiming that your coworkers might be "upset" or "uncomfortable" when they see your turban is not an undue hardship.

The above is the EEOC's position on the accommodation of religious articles of clothing. I bring this up because Disney has been sued by a practitioner of the Sikh religion, who claims he was denied a job because of his turban. According to a press release by the Sikh American Legal Defense and Education Fund:

Mr. Channa applied for a job as a musician with Disney in the Fall of 2006 but was told that he would not be hired because he lacked "the Disney look" - a negative reference to his religiously-mandated dastaar (Sikh turban).

This lawsuit will most likely be decided on one question - does it pose an undue hardship on Disney for one of its performers to wear a turban? This question is not as easy to answer as it might appear. Disney World might be the most controlled environment on the planet. Employees are not called employees, but cast members. Every worker is considered integral to the suspension of disbelief that Disney is trying to create. Thus, if Mr. Channa is going to be performing, shouldn't he be required to wear the uniform, even if it means not wearing his turban?

On the flip side, Disney permitted Mr. Channa to interview and rehearse with his turban. If the specific uniform was a requirement for the job, why lead him along only to pull the rug out from under him at the last minute. Plus, I'd image that a company as large as Disney has had cast members in the past who have not been able to match the uniform exactly. For example, would Disney refuse to hire a disabled musician if he had to perform in a wheelchair?

It seems to me that Disney dropped the ball on this one. Can there really be an undue hardship on Disney by allowing Mr. Channa to wear his turban? The EEOC defines undue hardship as an accommodation that "requires more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees' job rights or benefits, impairs workplace safety, or causes co-workers to carry the accommodated employee's share of potentially hazardous or burdensome work." Religious head wear does not impact any of these factors. This is a lawsuit that Disney should settle and settle quickly, if for no other reason that to avoid the bad press that its small world apparently does not include Sikhs.

Is this the beginning of the end for the Ohio Healthy Families Act?

The Cleveland Plain Dealer is reporting that Governor Strickland has publicly come out against the Healthy Families Act:

Strickland, a Democrat, began speaking out publicly against the so-called Healthy Families Act last week, urging business and labor to get together and work out a compromise that would keep it off the ballot.

His motivations are both practical and political.... From a practical standpoint, Strickland clearly is concerned about the measure's economic costs. Like the coalition of business interests that is opposing the issue, he has noted how expensive it would be for companies to provide such a benefit.... Despite the concerns of employers, voters love the idea. Therein lies Strickland's political headache.

Voters of both parties support the proposal, but it is especially popular among Strickland's fellow Democrats. It has been predicted to drive Democratic turnout in this fall's presidential race in much the same way a proposed gay marriage ban did with Republican turnout in 2004. As with that issue, the sick-day proposal has national scope: it has been proposed in a dozen states and two cities, and is supported by presumptive Democratic nominee Barack Obama.

Because 70% of Ohioans support this measure, it will be very difficult to keep if off November's ballot, despite Governor Strickland's efforts. In the meantime, if you want more information on the likely harm the Health Families Act will cause to Ohio's already fragile business climate, visit the Ohio Chamber of Commerce's website about the OHFA, Ohio Business Votes.

The intersection of techology and labor law: new website for posting of compensation information raises concerns

George's Employment Blog reminds us that an employer cannot ban its employees from discussing wage and benefits without violating the National Labor Relations Act. According the NLRB's recent decision in Windstream Corp.:

[A]n employer rule which regards employee compensation and benefit information as confidential and prohibits employees from discussing such information with one another violates Section 8(a)(1) of the Act.... In examining whether a particular rule so violates Section 8(a)(1), the Board's analysis requires that the rule be such that "Employees would reasonably construe the language to prohibit Section 7 activity."

Windstream's challenged policy stated:

Employee compensation, benefits, and personnel records and information are confidential.

Only employees who need to know such information in the course of employment should access such employee information.

You should not disclose this information to any other Windstream employee unless that employee has a need to know such information in the course of employment.

Except as required to comply with law, you should never disclose this information to any party other than the employee or individual whose access has been authorized by the employee.

This does not prohibit you from disclosing or discussing personal, confidential information with others, so long as you did not come into possession of such information through access which you have as part of your formal Company duties.

(Winstream added the last sentence after the filing of the unfair labor practice charge). The NLRB found that the language violated Section 8(a)(1) because it was "so broadly stated that employees could and will construe them to prohibit discussions of wages and working conditions with others."

I was again reminded of this line of cases when I read an article in Business Week magazine this week touting the launch of Glassdoor.com. According to Glassdoor.com's press release, it will make available user-submitted, anonymous compensation information organized by company:

Compensation information by company and position. Unlike most salary services that only report aggregated data by generic position type and industry, Glassdoor provides details of salary, bonuses, and other compensation for actual positions and titles at specific companies. For example, users can see exactly what a software engineer at Google makes, along with bonuses and types of equity grants, in comparison to a software development engineer at Microsoft.

If employees have a statutory right to discuss compensation and benefit information, but lack the same right to use an employer's e-mail system for Section 7 purposes, can a company prohibit its employees from accessing Glassdoor.com without violating the National Labor Relations Act? The answer seems to be yes, as long as the prohibition only extends to company time and company equipment. A more broadly draft ban that applies to what employees do on their personal time very well might run afoul of the Windstream line of cases.

What I'm reading this week #35

While I recognize that the next statement might alienate some of my readers, I have to admit that I'm not the biggest NASCAR fan. That fact, however, does not stop me from reporting that a former NASCAR official has sued the racing league for sexual harassment, seeking an astounding $225 million in damages (which makes NASCAR a whole lot more interesting to me). For an HR perspective on this issue, click on over to The HR Capitalist. Meanwhile, the Connecticut Employment Law Blog has some insightful thoughts on companies being fairly stereotyped by their public image.

Rush on Business advises that companies should "build an Ark" to avoid employment lawsuit. What does Rush mean? Like Noah, businesses should be proactive in attacking issues before they become a problem that can swamp the company. Some examples include having an effective harassment policy, promptly and accurately documenting performance problems, and reviewing wage and hour compliance.

Recall that in Thompson v. North Am. Stainless, the 6th Circuit went beyond the plain language of Title VII to find a claim for associational retaliation. Jottings by an Employer's Lawyer, the granddaddy of employment law blogs, reports on a case out of the 5th Circuit that came to the exact opposite conclusion under the FMLA.

The Delaware Employment Law Blog observes that in employment disputes, simply providing an employees a forum to air their grievances can often stave off a lawsuit.

The Pennsylvania Labor & Employment Blog reports on Klopfenstein v. National Sales & Supply, in which a Pennsylvania federal court found that the act of getting coffee is not gender specific and therefore cannot form the basis for a sexual harassment claim.

Finally, this week brings us a trio of thoughful articles on preventing and avoiding retaliation claims: the Labor & Employment Law Blog on training supervisors to avoid retaliation claims; BLR's HR Daily Advisor on how not to be blindsided by a retaliation claim, and BLR's HR Daily Advisor on rules to prevent retaliation.

Defining the proper "decisional unit" is key in legitimacy of RIFs

Today, we'll finish up our series on releases and waivers of age discrimination claims by looking at how courts examine the scope of the decisional unit for purposes of making the requisite disclosures under the Older Workers Benefits Protection Act ("OWBPA") for a group reduction. For the previous two posts, see Offering of severance package found to be evidence of a constructive discharge, and Refresher on age discrimination waivers.

According to the 6th Circuit in Raczak v. Ameritech Corp., the purpose of OWBPA is to ensure that "workers who signed a waiver had a clear idea of what they were giving up, particularly that they had the ability to assess the value of the right to sue for a possibly valid discrimination claim." Thus, a valid waiver under the OWBPA in a group reduction must include information - ages and job titles - of everyone in the decisional unit, whatever that decisional unit may be, and the status of each individual with respect to whether the employee was selected for termination or retention. The law requires employers engaging in a group layoff to give employees need data to conduct a meaningful analyses to determine whether an employer engaged in age discrimination before agreeing to sign a severance agreement. They key in determining whether employees are truly comparing apples to apples is the scope of the "decisional unit" the employer uses to compile is list of affected and unaffected employees.

The OWBPA's regulations (29 C.F.R. § 1625.22) define the term "decisional unit" as follows:

[D]ecisional unit is that portion of the employer's organizational structure from which the employer chose the persons who would be offered consideration for the signing of a waiver and those who would not be offered consideration for the signing of a waiver. The term "decisional unit" has been developed to reflect the process by which an employer chose certain employees for a program and ruled out others from that program.

The regulations offer several examples to assist companies in selecting the proper decisional unit:

• If an employer is attempting to reduce its workforce at a particular facility and undertakes a decision-making process by which some of the employees at the facility are selected for a program and others are not, then the facility will be the decisional unit.
• If the employer seeks to reduce the number of employees at a facility by exclusively considering a particular portion or sub-group of its operations at a facility, then the decisional unit would be that sub-group or portion of the workforce at the facility.
• The decisional unit may be larger than one facility if an employer is attempting to combine operations from several facilities and considers employees in several facilities for termination.

Thus, they key factors for deciding the proper scope of the decisional unit include the identity of the decision maker and the employees actually considered for the RIF. Several cases provide additional examples of these principles in action:

Burlison v. McDonald's Corp.

McDonald's engaged in a nationwide corporate reorganization. It charged each regional manager with the task of determining which employees to keep for each new region. McDonald's offered each RIFed employee a severance package in exchange for a release of all claims. In its effort to comply with the OWBPA, McDonald's provided with each severance agreement a region-specific information sheet. Each of the 5 plaintiffs (all of whom were over 40) signed the releases and accepted the severance packages. Two years later, however, they sued for age discrimination, claiming that the releases were void because McDonald's had engaged in a nationwide RIF, for which the OWBPA required that it provide them nationwide information, and not just information limited to their region. The 11th Circuit found that because the decisions as to who to terminate were made on the regional level, the region was the proper decisional unit. Because the local managers made the decision, the nationwide unit had no relevance to the plaintiffs.

Kruchowski v. Weyerhaeuser Co.

While the employees in Burlison were rebuked for arguing for an overly broad decisional unit, the employer in Kruchowski v. Weyerhaeuser Co. was punished for selecting a unit that was too wide for the actual scope of the RIF. The plaintiffs were 16 of the 31 employees selected for a RIF at the defendant's mill. The OWBPA notice advised the RIFed employees that the "decisional unit" was all salaried employees at the mill. The court of appeals found that the waivers were invalid because the Notice misidentified the decisional unit as all salaried employees. The actual unit was all salaried employees who directly reported to the mill manager. 15 salaried employees did not report to the mill manager, yet were included in the Notice. According to the court: "Defendant itself ignored its structure and decision-making hierarchy when the notified plaintiffs of the 'decisional unit.'" Because the decisional unit of which the plaintiffs were notified and the actual decisional unit were two separate groups, the waiver was void.

Conclusion

RIFs are not do-it-yourself projects for businesses. They raise myriad employment law issues, not the least of which is the scope of the proper decisional unit for purposes of making disclosures under the OWBPA. It is crucial to get these waivers absolutely right, or companies risk paying severance and still getting sued for age discrimination. Don't put yourself in that position - seek professional help before carrying out a RIF.

Refresher on age discrimination waivers

Yesterday, we looked at Coryell v. Bank One Trust, which found that the offering of a severance package could constitute evidence of a constructive discharge. Even though the employee was losing his job as part of a corporate reorganization, the court believed a question existed as to whether he had any meaningful choice but to accept the severance package.

As I mentioned yesterday, the lawsuit could have been avoided if the company required Coryell to sign a severance agreement that included a valid release of claims as a condition to receive the severance package. In fact, I'd go so far as to say that it would take a very rare case for me to feel comfortable with an employee receiving severance of any kind without signing a release in return.
Severance agreements for employees age 40 or over present their own set of problems. The Older Workers Benefit Protection Act (OWBPA), which amended the federal Age Discrimination in Employment Act, requires that any releases and waivers of federal age discrimination claims be "knowing and voluntary." Simple enough, right?. What release is not entered into knowingly and voluntarily? Not so fast. The OWBPA specifically defines what a "knowing and voluntary" waiver means, and it is not as simple as it might sound:

1. The waiver must be part of an agreement between the employee and the employer.
2. The waiver must be written in a manner calculated to be understood by the employee.
3. The waiver must specifically refer to rights or claims arising under the ADEA.
4. The employee cannot be waiving any rights or claims that arise after the date he or she signs the agreement.
5. In exchange for the release, the employee must receive consideration in addition to that which he or she is already entitled.
6. The employee must be advised, in writing, to consult with any attorney before signing the agreement.
7. The employee must be given 21 days to consider whether to sign the agreement.
8. The agreement must provide for a period of at least 7 days following its execution for the employee to revoke the agreement, and the agreement cannot become effective or enforceable until that revocation period has expired.

If the release and waiver is provided as part of some severance program offered to a group of employees (such as a reduction in force), these requirements change. The 21 day period within which to consider the agreement is extended to 45 days. Moreover, at the start of that 45 day period (i.e., at the same time the employer gives the severance agreement to the employees), the employer must also disclose, in writing:

1. The eligibility criteria for inclusion in the group.
2. The job titles and ages of all individuals eligible or selected for the program.
3. The ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.

Meeting these criteria is vitally important. The absence of even one of these factors invalidates the entire release as to the employee's federal age discrimination claim. Thus, even if an employee signs a severance agreement, the employee is free to bring a federal age discrimination claim if one of the above eight elements is missing from the agreement. To make matters worse, under Oubre v. Entergy Operations and current EEOC regulations, an employee is not required to tender back the severance pay as a condition to bringing an age discrimination claim under an invalid waiver. As Dan Schwartz points out in his Connecticut Employment Law Blog: "Employers are advised to seek legal counsel before using a model agreement."

Tomorrow, we'll examine the disclosures required in a group separation, and look at some cases from Ohio and elsewhere that talk about how to define the scope of the job classification for purposes of making these disclosures.