EEOC 0-2 on severance-agreement lawsuits … but does it matter?

Recall that in October, a Chicago federal court dismissed a lawsuit filed by the EEOC against CVS, claiming that the pharmacy retailer’s severance agreements violated Title VII by employing allegedly retaliatory language. That court, however, failed to reach the merits of the case, instead dismissing the EEOC’s claims on procedural grounds (the agency’s failure to engage in pre-suit conciliation), thereby depriving employers guidance on whether certain garden-variety provisions in employment agreements violate Title VII’s anti-retaliation provisions. I held out hope that the practical guidance employers seek on this issue would come from a similar lawsuit pending in Colorado.

Last week, a Denver federal court dismissed that other EEOC severance-agreement-as-retaliation lawsuit. Like the earlier CVS dismissal, however, the dismissal in EEOC v. CollegeAmerica Denver was on procedural grounds, and offers little practical import for employers moving forward on this important issue.

Perhaps if there is any solace for employers looking to sue separation agreements to halt future litigation, and not to buy a future lawsuit by the EEOC, employers can look to footnote 3 in the EEOC v. CVS decision:

The “covenant not to sue” provision prohibits an employee from “initat[ing] or fil[ing] … a complaint or proceeding asserting any of the Released Claims.” The general release of claims is set out in ¶ 7 of the Agreement, but that section also includes the caveat that the release does not limit “any rights that the Employee cannot lawfully waive.” However, there is a specific carve out for an employee’s “right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws”; and further provides, “nor shall this Agreement prohibit [the employee] from cooperating with any such agency in its investigation.” … The verb participate is defined as “to be involved with others in doing something” and “to take part in an activity … with others.” http://www.merriam-webster.com/dictionary/participate. It is not reasonable to construe “the right to participate in a proceeding with any appropriate federal … agency,” to exclude the right of the employee from filing an EEOC charge. And, even if the Separation Agreement explicitly banned filing charges, those provisions would be unenforceable and could not constitute resistance to the Act.

In other words, the CVS court, albeit in dicta, believes that the EEOC is chasing an unsupportable claim by arguing that covenants not to file charges violate Title VII’s prohibitions on retaliation.

Employers, however, should not lull themselves into a false sense of security. Neither employer won either of these cases on the merits. For whatever reason, this issue is on the agency’s radar, and it will likely seek another case to prove its point regarding these agreements.

For now, the prudent course of action is to make sure that your agreements clearly and unambiguously, in a provision separate and distinct from the release, waiver, and covenant not to sue, state that employees retain their federally protected rights. I am using something like the following:

Nothing in this Agreement is intended to, or shall, interfere with Employee’s rights under federal, state, or local civil rights or employment discrimination laws to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of any of the provisions of this Agreement. Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such brought against any of the Released Parties, regardless of who filed or initiated any such complaint, charge, or proceeding.

1.2 million reasons to fight harassment

According to an EEOC press release, a Wyoming federal judge has approved a $1.2 million settlement with three well-servicing companies on behalf of a dozen employees who claimed that they suffered regular and repeated racially derogatory comments and jokes:

Employees regularly used terms like “wetback” and “beaner” to refer to Hispanic employees, “wagon burner” to refer to Native American employees, and the “N-word” to refer to black employees…. According to the EEOC’s amended complaint, minority employees on the rigs regularly heard racist terms … such as “n----r-rigging” and telling employees to “n----r a pipe down” were also common.

Said EEOC General Counsel David Lopez, “This type of outrageous discrimination sadly still exists. Employers in the oil and gas industry should heed this settlement and renew their efforts to ensure that employees are treated equally regardless of race or national origin.” EEOC Regional Attorney Mary Jo O’Neill added, “The type of blatant racist conduct alleged in this case has no place in the workplace. We believe that our lawsuit and the significant relief obtained in this settlement will send the message, not only to the defendants, but to the entire industry that the EEOC will not this kind of misconduct - or retaliation for complaining about it.”

Over the past couple of weeks, our country has been hyper-focused on race. It’s pathetic that employees still have to suffer workplaces with any degree of racism. While I believe that not every mishandled situation is because of race, this EEOC settlement shows that we still have a ways to go with race relations, and employers that shirk or ignore their responsibilities in this regard do so at their peril.

WIRTW #347 (the “bad santa” edition)

A big thank you to NPR’s Yuki Noguchi, who interviewed me for a story on office holiday parties gone badly, which ran on Wednesday’s Morning Edition. You can listen here:

I love my money-quote as the story’s main call-out. I should emboss it on my business cards.

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Have you voted yet for this year’s ABA Blawg 100? You have until Dec. 19 to cast your vote here. (And a hearty and heart-felt thank you to Casey Sipe for the kind words in nominating me this year).

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Here’s what I read this week (and last week):

Discrimination

• Cancer and the Workplace: Tips for Employers and A Thanksgiving to Remember: When Cancer Strikes — via Dan Schwartz’s Connecticut Employment Law Blog
• Do you have a “super” anti-harassment contract with your employees? — via Eric Meyer’s The Employer Handbook Blog
• Accommodating service animals in the workplace — via HR Hero Line
• “Oh Wow, You Look So Pretty I Can’t Even Concentrate” (Part II) — via Employment Discrimination Report
• Sexual Harassment Investigations — via Employment Essentials
• The EEOC and wellness programs: coming home to roost? — via Michigan Employment Law Connection
• EEOC promises guidance on wellness programs in February — via Robin Shea’s Employment & Labor Insider

Social Media & Workplace Technology

• Issue of Threats via Facebook Heads to the Supreme Court — via Molly DiBianca’s Delaware Employment Law Blog
• Googling Candidates: Ray Rice Version — via The HR Capitalist, Kris Dunn
• The Key to Managing Cyber Monday: Just Be Generous With Employees — via TLNT
• Will “Facebook at Work” be a LinkedIn Killer? — via The Tim Sackett Project
• Fitbit Data May Become Evidence in the Courtroom — via Ride The Lightning
• The Newest Field of E-Discovery: You — via Above the Law
• Is Your Company on Instagram? 3 Things GCs Should Watch For — via In House

HR & Employee Relations

• The One Where Evil HR Lady Gets Fired — via Evil HR Lady, Suzanne Lucas
• Are old ways of treating employees coming back? — via Mike Haberman’s Omega HR Solutions
• News Flash: My Background Check and I Am Boring — via employeescreenIQ Blog
• Disgruntled Employee’s Alleged Parting Shot Leads to Federal Indictment — via Suits by Suits
• Ten Actions You Can Take Now to Protect Your Company’s Trade Secrets – Action Three: Create a Culture of Confidentiality — via netWORKed Lawyers
• Doggy Day Care Chain Makes Pet Sitters Sign Noncompetes To Protect “Trade Secrets” — via Huffington Post
• I Want it Now: Entitlement in the Workplace — via HR Schoolhouse
• Unconscionable Employment Arbitration Agreements — via Phil Miles’s Lawffice Space

Wage & Hour

• Wage Theft Costs American Workers as Much as $50 Billion a Year — via Texas Employment Law Blog
• Report: Buccaneers Employ Indentured Servants As Concessions Workers — via Deadspin
• No FLSA Overtime Recovery For What Employer “Should Have” Paid — via Wage and Hour Laws Blog
• Avoid Being the Next Unpaid Intern Headline — via Wage & Hour Defense Institute
• FLSA Rules For Exempt Employees During Snow Days — via Minnesota Employer
• Happy Thanksgiving from my Lovable FMLA Abuser, Albuquerque Turkey — via Jeff Nowak’s FMLA Insights

Labor Relations

• 2014 Union Win Rates Increase Over Same Period in 2013 — via Matt Austin Labor Law
• Board ALJ Hits Phillips 66 For Media Gag Policy — via Labor Relations Today
• Franchise arrangements pose legal problem for NLRB’s proposed joint-employer standard — via Ohio HR Law
• NLRB General Counsel on Joint Employment: “The More (Employers) The Merrier” — via The Emplawyerologist
• Facebook Bus Drivers Join Teamsters — via Labor Relations Today

Reading the #SCOTUS tea leaves: Young v. UPS and pregnancy accommodations

Yesterday, the Supreme Court heard oral argument in Young v. UPS, which will decide whether Title VII requires an employer to accommodate pregnant workers the same as non-pregnant workers similar in their inability to work.

UPS required Peggy Young to be able to lift up to 70 pounds as part of her job as a package delivery driver. After she became pregnant, her doctor limited her lifting. Ms. Young requested that UPS move her to a light duty assignment. UPS’s collective bargaining agreement allowed an employee to work a light duty assignment only because of an “on-the job” injury or when “disabled” under the ADA. Because Ms. Young did not meet either of these categories UPS denied her request.

Ms. Young’s lawsuit argued that UPS violated Title VII because the Pregnancy Discrimination Act required UPS to provide her with a “reasonable accommodation” to the same degree it accommodated a disabled employee. The 4th Circuit disagreed, finding that UPS’s policies did not treat pregnant workers less favorably, but the same as any other worker who did not meet the specific requirements for light duty under the CBA. 

The case may hinge on where the justices fall on the right comparator for UPS’s pregnant workers. Is it those employees who are ADA-disabled or otherwise injured on-the-job, whom UPS accommodates, or those non-ADA employees injured off-the-job, whom UPS does not accommodate.

As one would expect, the Justices appear to be split down ideological (maybe gender) lines, and, as is often the case, Justice Kennedy may be the key that will unlock this issue. He, however, was relatively quiet during the argument, only asking a handful of questions, which failed to shed any light on his thought process. Truth be told, it was a very curious argument, and the case, at least based on the Justice’s queries, is not easily predictable.

I am hopeful that the court will side with working parents and rule in favor of the employee in this case. A ruling for UPS would, I fear, promote the unequal treatment of pregnant workers, which is anathema to the spirit, if not the letter, of the Pregnancy Discrimination Act. No employer should be allowed to act as if it is exempt from the law.

A PDF of the compete oral argument transcript is available here.

Let’s all strive to be a little more flexible

Two weeks ago I had no choice but to take my 8-year-old daughter to a hearing. My wife was out of town for work, and Norah was home from school sick with a fever. So, we packed up her iPod and a Harry Potter book, and we drove down to the Industrial Commission. We had a great morning. We stopped for breakfast at Starbucks and talked—about school, her friends, and life in general. In the back of my mind, however, I was a bit on edge, as I had no idea how the hearing officer would react to an unplanned bring-your-daughter-to-work day.

As it turns out, my edge was for naught. The hearing officer could not have been cooler. She welcomed Norah to the hearing room with open arms, and complimented her on our way out on how well she behaved (as if there was any doubt). In fact, she was so cool that she noted “Miss Hyman” as having made an appearance for the Employer in her written opinion.

Compare my story to that of an attorney, who, having given birth, asked a Department of Justice Immigration Judge to continue a hearing. Amazingly, that judge refused. Or, consider this example from my past of a lawyer who refused to agree to a continuance while my son was in the hospital.

What’s the lesson here? Career and life don’t always get along. Yet, the meaning of “working time” in this country is changing. Technology has made it much easier for employees to work anywhere at any time. The law, however, is traditionally slow to react. Last month, the 7th Circuit held that regular attendance at work is an essential function of most jobs (even in the face of the defendant-employer’s “Work at Home” policy), and, next year, the 6th Circuit will decide the issue of telecommuting as an ADA reasonable accommodation.

Just because the law is slow to react to this paradigm shift in the definition of “work” does not mean that you should avoid flexible work policies for your employees. Employers that can adapt to the shifting needs of their employees, and their ability to work outside the four walls of the office and the traditional 9-to-5 hours, will have a leg up on attracting and retaining talent. Isn’t that the best reason to be flexible with your workers?

Oh, and in case you’re curious, Norah’s legal career is off to a rousing start. She’s 1-0. She’ll have a tough when she grows up between lawyer or rock star.

Federal court holds that Title VII does not protect the transgendered

LGBT rights continue to dominate headlines. Last month, the 6th Circuit became the first federal appellate court to uphold a state-law same-sex marriage ban, teeing up a likely showdown in the Supreme Court sometime next year. In September, the EEOC filed its first two lawsuits alleging sex discrimination on behalf of transgender employees (here and here).

Now, a federal court in Texas has expressly held that Title VII’s prohibition against sex discrimination does not extend to a transgender employee. Eure v. The Sage Corp. (W.D. Tex. 11/19/14) (h/t: Eric Meyer) involves a truck-driving instructor born a female but who presents as a male.  Eure alleged that her employer’s National Project Director, upon seeing her with a student, said, “What is that and who hired that,” adding that Sage did not hire “cross genders.”

The court, however, dismissed Eure’s sex-discrimination claim, concluding that Title VII’s prohibition against sex discrimination does not cover transgender employees.

In some cases, the plaintiffs bringing successful sex stereotyping claims are transgender people, arguing that the discrimination that they have suffered is because their coworkers perceived their behavior or appearance as not “masculine or feminine enough.” However, courts have been reluctant to extend the sex stereotyping theory to cover circumstances where the plaintiff is discriminated against because the plaintiff’s status as a transgender man or woman, without any additional evidence related to gender stereotype non-conformity…. [D]iscrimination based on transgender status is [not] per se gender stereotyping actionable under Title VII.

What lessons can we learn from this case? While many courts have extended Title VII’s protections to address sexual orientation and gender identity based on “sex stereotyping” (i.e., an employee’s failure to conform to traditional male or female gender roles), this issue is far from settled. Because the issue is not clear, we not-so-patiently wait for Congress to step in and address the issue by amending Title VII to make this coverage clear and unambiguous. In the meantime, you, as an employer, are free to decide the issue for your own workplace by drafting (and, more importantly, enforcing) policies of inclusion for LGBT employees.

Feds say you can't force high-cost employees onto Health Care Exchange

Do you have an employee with a high-cost medical condition? For example, an employee with hemophilia could incur hundreds of thousands or dollars or more in medical costs per year. That one employee could be catastrophic for the overall cost of your company’s group health plan. As a result, many employers are taking advantage of Obamacare’s health-care exchanges by paying these employees to secure their own private medical insurance.

This practice, however, may be changing, and it’s not for the better. According to TLNT, the Departments of Labor, Health and Human Services, and the Treasury have jointly warned employers not to dump high-cost employees from group health plans:

As employers try to minimize expenses under the health law, the Obama Administration has warned them against paying high-cost workers to leave the company medical plan and buy coverage elsewhere. Such a move would unlawfully discriminate against employees based on their health status….

The Affordable Care Act requires exchange plans to accept all applicants at pre-established prices, regardless of existing illness. Because most large employers are self-insured, moving even one high-cost worker out of the company plan could save a company hundreds of thousands of dollars a year. That’s far more than the $10,000 or so it might give an employee to pay for an exchange plan’s premiums….

The Affordable Care Act itself doesn’t block companies from paying sick workers to find coverage elsewhere…. But other laws do, including the Health Insurance Portability and Accountability Act and the Public Health Service Act, according to three federal agencies. Specifically, paying a sick worker to leave the company plan violates those statutes’ restrictions on discriminating against employees based on medical status, the departments said in their bulletin.

I understand how dropping an ill employee from health coverage because of a medical condition would violate a variety of laws, including the ADA. But, in these cases, employers are not “dropping” employees. Instead, they are merely shifting coverage from an employer-sponsored plan to a government-sponsored plan. The cost to the employee, and the coverage available to the employee, should not change. If the cost and coverage does not change, this practice should not violate any laws.