Labor and Employment Law Section
Monthly Circuit Updates
January 2017
Second Circuit
Sheng v. M&T Bank Corp., ___ F.3d ___, 2017 U.S. App. LEXIS 1912 (2d Cir. Feb. 2, 2017)
In this disability discrimination case where Plaintiff alleged that her former employer failed to accommodate her disability, the trial court allowed the Defendant to introduce evidence that Plaintiff had rejected a settlement offer that would have allowed Plaintiff to work remotely from another city. This offer was introduced to show the Plaintiff did not properly mitigate her damages. The Court of Appeals granted Plaintiff a new trial, reasoning that settlement offers are inadmissible under Fed. R. Evid. 408. The Second Circuit reaffirms a prior holding from 1992: “Where a party is represented by counsel, threatens litigation and has initiated the first administrative steps in that litigation, any offer made between attorneys will be presumed to be an offer within the scope of Rule 408.”
Third Circuit
Karlo, et al. v. Pittsburgh Glass Works, LLC, __ F.3d __, 2017 WL 83385 (3d Cir. Jan. 10, 2017)
The Age Discrimination in Employment Act (ADEA) prohibits employment practices that have a disparate impact due to age. But the ADEA, by its express terms, protects only those employees aged forty or older. The question thus arises: when determining whether an employment practice has a “disparate impact” due to age, must the impact on all employees over the age of forty be considered, or may a plaintiff propose a “subset” of workers, such as those over the age of fifty or fifty-five, as the victims of disparate impact? Rejecting contrary precedent from the Second, Sixth, and Eighth circuits, the Third Circuit held that ADEA disparate impact claims are allowable when brought by a subgroup of employees over the age of forty. Further, such claims may be pursued even if it could be demonstrated that other subgroups of employees over the age of forty, yet who are younger than the adversely-affected subgroup, received favorable treatment.
The case arose from a 2009 reduction in force implemented by the employer, Pittsburgh Glass Works (PGW), an automotive glass manufacturer, due to a decline in the automotive industry. The reduction in force affected one hundred salaried employees in forty different work locations. Unit directors were granted broad discretion to select layoff targets. They received no training, guidelines, or policies to instruct them in layoff procedures, and their decisions were not subject to legal review or even a documentation requirement.
The plaintiffs in the case were employees over the age of fifty who had worked in the Manufacturing Technology Division, and who had been terminated by the same supervisor. They commenced an action in federal district court after receiving a “right to sue” letter from the Equal Employment Opportunity Commission. The plaintiffs alleged disparate treatment and disparate impact claims. The disparate impact claim was premised on the argument that PGW’s layoff action had a disparate impact on workers age fifty and older. Certain plaintiffs also alleged unlawful retaliation. The District Court denied the plaintiffs’ application to proceed as a collective action on behalf of all “similarly situated” employees, and also entered an order barring plaintiffs from presenting expert testimony regarding statistical evidence of disparate impact, regarding allegedly “reasonable” human resources practices pertaining to layoffs, and regarding age-related “implicit bias.” The District Court subsequently granted partial summary judgment to PGW on the disparate impact and disparate treatment claims. A claim of disparate impact premised upon a class of employees age fifty and over was deemed not cognizable under the ADEA. The District Court also cited the absence of statistical evidence of disparate impact. Although the retaliation claims were allowed to proceed, the District Court certified its determination on the disparate impact and disparate treatment claims as final under FRCP 54(b). Only the disparate impact claim was appealed.
The Third Circuit held that ADEA disparate impact claims may proceed when a plaintiff offers evidence that a specific, facially-neutral employment practice caused a significantly disproportionate adverse impact upon a specific subgroup of employees protected under the ADEA. Such a claim may proceed even if the disparate impact “washes out” if the entire class of ADEA-protected employees over the age of forty is considered. “A contrary rule would ignore significant age-based disparities.”
Citing Smith v. City of Jackson, 544 U.S. 228 (2005), the Third Circuit first noted that the anti-discrimination provisions of the ADEA, 29 U.S.C. Section 623(a), track those of Title VII of the Civil Right Act of 1964, except that ADEA protections are limited to individuals over the age of forty. 29 U.S.C. Section 631(a). Similar to Title VII cases, claim under the ADEA may proceed under a theory of disparate treatment, 29 U.S.C. Section 623(a)(1), or under a theory of disparate impact. 29 U.S.C. Section 623(a)(2). However, the burden of proof in a disparate impact claim under the ADEA differs slightly from the burden of proof under Title VII. Under the ADEA, unlike Title VII, the plaintiff must isolate and identify a specific, facially-neutral employment policy that is responsible for a statistical disparity based on age. And unlike Title VII, the employer may defend by showing that the policy was based on a “reasonable factor other than age,” (RFOA). And unlike the case under Title VII, it need not be shown that the employer had no available alternative policy for achieving its goals. This is the case because “age… not uncommonly has relevance to an individual’s capacity to engage in certain types of employment.”
The plain text of 24 U.S.C. Section 623(a)(2) supports the viability of so-called “subgroup claims.” It is unlawful to “adversely affect [an employee’s] status … because of the individual’s age.” The focus on age as the protected trait and on the rights of the individual are the key textual guides. The Third Circuit cited O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996), in which the United States Supreme Court allowed a disparate treatment claim brought by a fifty-nine year old employee who was replaced by a younger worker over the age of forty to proceed. O’Connor stands for the proposition that the ADEA prohibits age discrimination, not discrimination against employees age forty and over. Put differently, the “forty and over” language of the ADEA defines the class of plaintiffs who may sue under the ADEA, but it does not define the protected characteristic. O’Connor’s holding with respect to disparate treatment claims leads to the conclusion that disparate impact claims may likewise be brought by plaintiffs who endure adverse impact as compared to younger workers also over the age of forty. Notably, the disparate impact provision of the ADEA, which prohibits discrimination “because of such individual’s age,” 29 U.S.C. Section 623(a)(2), uses the same terminology found in the ADEA’s disparate treatment provision, 29 U.S.C. Section 623(a)(1). Identical terminology used in the same statute is to be given identical meaning.
Further, in Connecticut v. Teal, 457 U.S. 440 (1982), the United Supreme Court held that disparate impact claims protect individuals, not classes. The Teal Court rejected the so-called “bottom line” defense, in which adverse effects against certain members of a protected class at one step of a challenged employment policy is supposedly “offset” by preferential treatment given to other members of the same class at a later step in the employment procedure, such that the “end result” is allegedly favorable to the protected class as a whole. The ADEA, like Title VII, protects individual members of the protected class, not the class itself. Accordingly, an adverse effect imposed upon certain members of the protected class cannot be offset by favorable treatment given to others members of the same protected class. Thus, overall favorable treatment given to employees over the age of forty does not “offset” the unfavorable treatment received by a subgroup of those over the age of forty, i.e., those age fifty or greater.
The interpretation of the ADEA urged by PGW, and accepted by the District Court, would rewrite 29 U.S.C. Section 623(a)(2) to proscribe discrimination because of the individual’s status of being age forty or older. Courts must instead interpret the ADEA as it is written. Further, the remedial purposes of the ADEA would not be served if PGW’s interpretation were to be accepted; otherwise, the oldest workers in most need of protection would be left vulnerable.
The Third Circuit noted that the Second Circuit (Lowe v. Commack Union Free School District, 886 F.2d 1364 (2d Cir. 1989)), the Sixth Circuit, (Smith v. Tennessee Valley Authority, 1924 F.2d. 1059 (6th Cir. 1991)(table opinion)) and the Eighth Circuit (EEOC v. McDonnell Douglas Corp., 191 F.3d. 948 (8th Cir. 1997)), had each held differently. The Third Circuit declined to follow these cases. The other circuits “confuse evidentiary concerns with statutory interpretation and incorrectly assume that recognizing subgroup will proliferate liability for reasonable employment practices.” Further, the decisions pre-date, and are contradicted by, the Supreme Court’s holdings in O’Connor and Teal.
The Third Circuit also rejected the argument that recognizing age-based subgroups for disparate impact claims would lead to strategic “gerrymandering” of age groupings for litigation purposes. Such fears do not justify the ignoring of the plain text of the ADEA. Evidentiary gate-keeping is performed by District Judges in accordance with the rules of evidence. This constitutes a “sufficient safeguard against the menace of unscientific methods and manipulative statistics.” There are statistical methods to deal with the variable nature of age as a protected characteristic, and that can be utilized minimize arbitrary age grouping. Indeed, such evidence of age subgroups has been admitted by courts in disparate treatment cases; there is no reason such evidence would be less effective or manageable in disparate impact cases. Thus, sufficient means exist for identifying and attacking “cherry-picked” age subgroups.
The plaintiffs, joined by the EEOC appearing as an amicus, argue in favor of subgroups having a lower boundary but no upper boundary, e.g., employees aged fifty-five and over. This approach is valid because the ADEA protects only relatively older workers from discrimination in favor of the relatively young. Thus, defining an age subgroup with an upper boundary would improperly capture policies favoring older workers, which do not violate the ADEA, (citing General Dynamics Land Systems v. Cline, 540 U.S. 581 (2004)).
The Eighth Circuit in McDonnell Douglas expressed concern that it is impossible for an employer to achieve “statistical parity among the infinite number of age subgroups in the workforce,” and that to allow subgroup-based disparate impact claims to proceed would force employers to take age into account in devising layoff plans, very sort of evil that the ADEA was designed to prohibit. The Third Circuit rejected these concerns. Statistical disparity is not enough; rather, the plaintiff must identify the specific practice that caused the statistical disparity. This is not a trivial burden. Further, the statistical disparity must be “significant,” and “significance” is determined on a case-by-case basis. Further, the RFOA defense is a relatively light burden for an employer to meet because the employer need not show that it lacked any available alternatives for meeting its legitimate ends. Finally, because the ADEA must be enforced as drafted, the concerns raised by the Eighth Circuit in McDonnell Douglas must be directed toward Congress, not the courts.
The Third Circuit then reversed the District Court’s exclusion of the plaintiffs’ statistical expert and remanded the issue for further proceedings under Daubert v. Merrill Dow Pharmaceuticals, 509 U.S. 579 (1993). However, the exclusion of the experts on “reasonable” human resources practices and “implicit bias” was upheld.
The plaintiffs claimed that their expert on “reasonable” human resources practices was being offered to refute the RFOA defense. But the RFOA defense can be refuted only by showing that the factor upon which the employer relied was unreasonable. The existence of alternative “reasonable” courses of action that the employer could have chosen is immaterial.
“Implicit bias” evidence was not relevant to this case because the employer’s state of mind is immaterial to a disparate impact claim. However, in appropriate cases, “implicit bias” evidence may be admitted to demonstrate the “headwind” faced by older workers that the disparate impact doctrine is “meant to address.”
Finally, the Third Circuit found that no clear error was committed by the District Court in declining to certify a collective action in this case. The proposed class members were not similarly situated because they “held seven different titles with varied job duties in two separate divisions of PGW and across five locations in which no less than six decision-makers independently included them” in the layoff action. The District Court was justified in denying collection action certification under these circumstances.
Capps v. Mondelez Global, LLC, __ F.3d __, 2017 WL 393237 (3d Cir. Jan. 30, 2017)
In this case, the Third Circuit held that an employer’s honest belief that its employee was misusing leave time under the federal Family and Medical Leave Act (FMLA) can defeat an FMLA retaliation claim. Further, although a request for intermittent leave under the FMLA may also constitute a request for a reasonable accommodation under the Americans with Disabilities Act (ADA), a failure-to-accommodate claim may not be pursued if the employee is provided with the intermittent leave he or she requested.
The defendant in this case was “one of the largest manufacturers of snack food and beverage production [sic] in the United States.” The plaintiff was employed as a “mixer” responsible for operating mixing machines that mix dough. The plaintiff suffered from a medical condition that caused him to develop arthritis in both of his hips, ultimately necessitating bilateral hip replacement. As a result, the employee experienced severe pain in his pelvic region, thighs and hips on an intermittent basis. He requested intermittent time off from work under the FMLA when these flare-ups occurred. The defendant routinely and consistently granted these requests.
The plaintiff used intermittent FMLA leave on February 11, 12, 14 and 15, 2013. (He worked a full shift on February 13). He returned to work on Monday, February 18, 2013, performing the same work and receiving the same salary and benefits as he had before taking intermittent FMLA leave. However, in early 2014, the defendant learned that the plaintiff had been arrested for driving while intoxicated, (having a blood alcohol concentration level of .339, more than four times the legal limit in Pennsylvania), on the evening of February 14, 2013, and had been incarcerated for this reason until the morning of February 15. Although he was scheduled to report to work at 1:00pm on February 15, 2013, he declined to report to work due to what he claimed to be leg pain. The plaintiff was confronted with this information. He responded by promising to provide documentation in support of his absences for the two days in question. He was suspended pending production of this documentation. When the documentation he produced was deemed insufficient, the plaintiff was terminated. His termination was based on his violation of the employer’s Dishonest Acts Policy, which prohibits “dishonesty on the part of [defendant’s] employees,” and defines dishonesty as an “inexcusable offense” that “will result in immediate suspension pending investigation [and] which could lead to termination.” The plaintiff filed an internal grievance challenging his termination, but subsequently rejected the employer’s offer of reinstatement without back pay. Plaintiff then initiated litigation alleging violations of the FMLA, the ADA, and analogous provisions of the Pennsylvania Human Relations Act. The District Court granted summary judgment in defendant’s favor on all claims. On appeal, the Third Circuit affirmed.
Retaliation claims under the FMLA are assessed under the burden-shifting framework established under Title VII in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). The plaintiff must first establish a prima facie case of discrimination. If the plaintiff succeeds, the defendant must articulate (but need not prove) a legitimate, non-discriminatory reason for the adverse employment action. The burden of proof then shifts back to the plaintiff to prove, by a preponderance of the evidence, that the articulated reason was a mere pretext for discrimination.
In this case, assuming that the plaintiff had established a prima facie case of FMLA retaliation, the defendant “met its burden of demonstrating a legitimate, nondiscriminatory justification for [plaintiff’s] discharge with evidence that [plaintiff] was terminated for his misuse of FMLA leave and dishonesty surrounding the leave in violation of [defendant’s] policies.” FMLA retaliation claims require proof of the employer’s retaliatory intent. “Where an employer provides evidence that the reason for the adverse employment action … was an honest belief that the employee was misusing FMLA leave, that is a legitimate, nondiscriminatory justification for the discharge.” The question is not whether the employer’s reasons for the decision are correct, but whether the employer’s description of its reasons is honest. In so holding, the Third Circuit cited with approval precedent from the Seventh Circuit, Eighth Circuit, and Tenth Circuit adopting the honest belief defense to FMLA retaliation claims. The Third Circuit specifically rejected Sixth Circuit precedent that requires the employer also to show that its honest belief was “reasonably based on particularized facts.” The “honest belief” rule was found to be consistent with Third Circuit precedent in cases arising under ADEA and Title VII cases. The evidence on record clearly supported the defendant’s contention that it had acted on an honest belief that the plaintiff had misused FMLA leave.
The Third Circuit also rejected plaintiff’s claim of FMLA interference. To make out such a claim, a plaintiff must show that he or she was an eligible employee under the FMLA, that the defendant is an employer subject to the requirements of the FMLA, that the plaintiff was entitled to FMLA leave, that the plaintiff gave sufficient notice to the defendant of his or her intention to use FMLA leave, and that the plaintiff was denied the FMLA benefits to which he or she was entitled. But in this case, the plaintiff could not show any evidence indicating that he had been denied a benefit to which he was entitled under the FMLA. Indeed, the plaintiff received all FMLA leave that he requested. He therefore could not make out an FMLA interference claim.
Finally, the Third Circuit rejected plaintiff’s failure-to-accommodate claim under the ADA. To establish such a claim, the plaintiff must show that he was disabled, that his or her employer knew of the disability, that the plaintiff requested an accommodation or assistance, the employer did not make a good faith effort to assist or accommodate, and that the plaintiff could have been reasonably accommodated. Assuming that plaintiff’s request for intermittent FMLA constituted request for reasonable accommodation, all such requests were granted. The employer therefore provided, and the plaintiff received, the accommodation he had asked for.
Fourth Circuit
Metro Machine Corp. v. Director, Office of Workers’ Compensation, ___ F.3d ___, 2017 WL 242986 (4th Cir. Jan. 20, 2017)
A pipefitter with a long history of breathing problems was diagnosed with COPD. During an extended workday, the pipefitter inhaled fumes from epoxy paint, which exacerbated his COPD. The pipefitter received medical treatment for the exacerbated COPD. Thereafter, the pipefitter was treated for a fractured vertebra, which his doctors attributed to excessive coughing from, and long-term steroid treatments for, the exacerbated COPD. The pipefitter requested payment for his medical treatments, including the fractured vertebra, under the Longshore and Harbor Workers’ Compensation Act (the “Act”). The employer denied payment.
The Act requires employers to provide medical care for employees who suffer an employment injury. To invoke the statutory presumption that a claim falls under the Act, an employee must allege that he suffered an injury that arose out of and in the course of his maritime employment. If an employment injury aggravates, accelerates, or combines with an employee’s previous health problem, the entire disability is compensable under the Act. An injured employee may establish a presumption of causation by showing that he suffered physical harm and that a workplace accident or workplace conditions could have caused, aggravated, or accelerated the harm.
The ALJ found that the pipefitter was entitled to the presumption that the exacerbation of his COPD was compensable. The ALJ further found that the pipefitter established a prima facie case linking his fractured vertebra to the employment-related COPD. The Benefits Review Board affirmed the ALJ’s award, rejecting the employer’s argument that the Act did not apply to “secondary injuries,” such as the fractured vertebra. The employer petitioned the Fourth Circuit for review.
The Fourth Circuit found that substantial evidence supported the ALJ’s decision, including that the pipefitter was diagnosed with exacerbated COPD and hospitalized for eight days following the exposure to epoxy paint fumes, and that the pipefitter’s breathing never returned to its pre-exposure levels. The Court further found that the Act’s presumption applies to both primary injuries—the exacerbated COPD—and injuries that “naturally or unavoidably result” from primary injuries—the fractured vertebra. Accordingly, the Fourth Circuit denied the employer’s petition for review.
Brown & Pipkins, LLC v. Service Employees International Union, Local 32BJ, ___ F.3d ___, 2017 WL 280733 (4th Cir. Jan. 23, 2016)
A union for janitorial employees filed four separate grievances with an employer regarding alleged violations of the collective bargaining agreement (the “CBA”). The employer allegedly reduced full-time schedules to 35 hours per week, unreasonably denied requests for vacation time, failed to pay for hours worked by certain employees, and failed to pay workers the correct rates according to their designations under the CBA.
The grievances were subject to arbitration upon notice by the union. The arbitrator granted all grievances, at least in part, and issued four arbitration awards. The district court confirmed all four arbitration awards, reasoning that all of the awards arose directly from the CBA and the arbitrator’s interpretation of that agreement. The employer appealed.
The Fourth Circuit assessed this case under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, which applies to controversies involving an assertion of rights under a collective bargaining agreement. The Fourth Circuit acknowledged that its review of labor-arbitration decisions is “very limited.” The Fourth Circuit noted that a court may overturn an arbitrator’s award in this context only where the arbitrator “strays from interpretation and application of the [CBA] and effectively dispenses his own brand of industrial justice.” Absent allegations of dishonesty, errors in, or even “silly,” fact finding do not warrant a court’s refusal to enforce the award.
Under that narrow scope of review, the Fourth Circuit concluded that for each award, the arbitrator acted within his authority to construe the provisions of the CBA. Accordingly, the Fourth Circuit affirmed the district court’s confirmation of all arbitration awards.
Salinas v. Commercial Interiors, Inc., ___ F.3d ___, 2017 WL 360542 (4th Cir. Jan. 25, 2016)
A group of contractors sued two entities, Commercial and J.I., as joint employers for violations of the Fair Labor Standards Act (“FLSA”). The district court granted summary judgment for Commercial, holding that it was not a joint employer with J.I. The contractors appealed.
Under the FLSA regulations, joint employment occurs when employment by one employer is “not completely disassociated” from employment by another employer. Joint employers are individually and jointly responsible for compliance with the FLSA, including overtime requirements. Therefore, the hours an employee works for each joint employer must be aggregated to determine whether the employee must be paid overtime.
The Fourth Circuit first acknowledged that several courts, including the district courts in the Fourth Circuit, applied the test for joint employment derived from the Ninth Circuit’s decision in Bonnette v. California Health and Welfare Agency, 704 F.2d 1465 (9th Cir. 1983). The Bonnette court’s test examines whether the alleged employer had the power to hire and fire employees, supervised and controlled employee work schedules or conditions of employment, determined the rate and method of payment, and maintained employment records.
But the Fourth Circuit then concluded that courts should no longer rely on Bonnette for two reasons. First, the Bonnette factors focus on the relationship between the employee and putative joint employer, rather than on the relationship between the putative joint employers. Second, the factors incorrectly frame the inquiry as a question of an employee’s “economic dependence” on a putative joint employer.
Accordingly, the Fourth Circuit announced a new test for determining whether joint employment exists. The first step analyzes the relative association or disassociation between the putative joint employers with respect to establishing the essential terms and conditions of employment. The second step analyzes whether the worker is an employee or an independent contractor.
Under the first step of the analysis, the Fourth Circuit created a non-exhaustive list of factors for courts to consider, including: (1) whether the putative joint employers jointly determine the power to direct, control, or supervise the worker; (2) whether the putative joint employers jointly determine the power to hire or fire the worker or modify the terms or conditions of employment; (3) the degree of permanency and duration of the relationship between the putative joint employers; (4) whether, through shared management or ownership interest, one putative joint employer controls, is controlled by, or is under common control with the other putative joint employer; (5) whether the work is performed on a premises owned or controlled by one or more of the putative joint employers; and (6) whether the putative joint employers jointly determine responsibility over functions ordinarily carried out by an employer, such as handling payroll, providing workers’ compensation insurance, paying payroll taxes, or providing the facilities, equipment, tools, or materials necessary to complete the work.
Applying its new test, the Fourth Circuit concluded that Commercial and J.I. jointly employed the contractors. Both entities provided instruction and direction to employees during the workday. The entities shared control over hours worked and hiring decisions to some degree. The entities had a longstanding business relationship through which the majority of J.I. contracts were with Commercial. The contractors worked on premises controlled by Commercial. And, finally, Commercial supplied the contractors with all the tools, materials, and equipment necessary to perform their work. The Court further concluded, as the parties did not dispute, that the contractors were employees of both entities rather than independent contractors.
Based on application of its new test, the Fourth Circuit reversed the district court decision and remanded for further proceedings.
Hall v. DIRECTV, LLC, ___ F.3d ___, 2017 WL 361065 (4th Cir. Jan. 25, 2016)
A group of satellite television technicians sued DIRECTV and DirectSat for violations of the Fair Labor Standard Act (“FLSA”) on the basis that the two entities were joint employers. The district court applied the test for joint employment derived from the Ninth Circuit’s decision in Bonnette v. California Health and Welfare Agency, 704 F.2d 1465 (9th Cir. 1983). Applying that test, the district court granted the entities’ motion to dismiss and the plaintiffs appealed.
The Fourth Circuit applied the new, two-step test for joint employment that the Court adopted in Salinas v. Commercial Interiors, Inc., and reversed the district court. At the pleadings stage, the Fourth Circuit concluded that the technicians had sufficiently alleged that DIRECTV and DirectSat jointly determined the key elements of the technicians’ employment. The Court further concluded that the technicians sufficiently alleged that they were employees rather than independent contractors.
The Fourth Circuit also considered whether the technicians sufficiently alleged the hours worked for which they sought overtime compensation. The Fourth Circuit acknowledged that courts are divided as to the level of detail required for a claim of unpaid overtime under the FLSA. Weighing the approaches of other circuits, the Fourth Circuit adopted a relatively lenient test.
The Court ruled that a plaintiff must provide sufficient detail to support a reasonable inference that she worked more than forty hours in at least one workweek and that the employer failed to pay overtime for that period. A plaintiff can meet this standard by estimating the length of her average workweek during a particular period of time, the rate she was paid, and the amount of overtime she believes she is owed. Under this standard, the Fourth Circuit concluded that the technicians had sufficiently alleged a claim for unpaid overtime under the FLSA.
By: Paul Sun
Sixth Circuit
Kristen Williams v. AT&T Mobility Servs., ___ F.3d ___, 2017 WL 382327 (6th Cir. Jan. 27, 2017)
In Williams v. AT&T Mobility Services, a former customer service representative brought claims under the Americans with Disabilities Act against AT&T following her termination. While employed, the plaintiff had accrued numerous unexcused absences but had also obtained several periods of disability leave for her depression and anxiety. Additionally, she had requested—but was not provided—flexible scheduling and intermittent breaks. Shortly before her termination, the plaintiff had stopped coming to work and her request for short-term disability leave was denied. AT&T discharged her while her appeal of that denial was pending.
The court acknowledged that the plaintiff had requested accommodations in the form of a flexible start time and modified breaks, but determined the plaintiff had failed to show such accommodations would have enabled her to perform the essential functions of her job. The court also held that the plaintiff’s request for additional leave was not reasonable, given the plaintiff’s history of taking several lengthy leaves, her condition not approving during those leaves, and her repeated failure to return on the dates her treatment providers had previously estimated. The timing of the plaintiff’s discharge—while an appeal on her leave request was pending—did not create evidence of retaliation because she had accrued enough absences to justify discharge even if the leave request were granted. The court concluded that the record evidence indicated absenteeism was the actual reason for her termination and affirmed summary judgment.
Seventh Circuit
Wink v. Miller Compressing Co., 845 F.3d 821 (7th Cir. Jan. 9, 2017)
The employer appealed from a jury verdict finding it liable for retaliation under the Family and Medical Leave Act, arguing for judgment as a matter of law on the ground that no reasonable jury could have found enough evidence to justify the verdict. The jury had found in the employer’s favor on three other claims.
A long-time employee, Wink had a work-from-home arrangement in place, whereby she worked from home but also applied FMLA hours to the time she spent at home during the weekday caring for her autistic son, whose autism at times manifested in violent behavior. Several months later, the company was experiencing financial difficulties, and decided that all employees would be required to work fulltime on site. On a Friday, the company gave Wink an ultimatum to comply, or be terminated. Wink got upset, and said she could not find the childcare on such short notice. In response, the company’s human resources officer falsely told Wink that the FMLA only covers leave from work for doctor’s appointments and therapy. When Wink could not return to work on Monday due to childcare reasons, the company considered her employment terminated and she did not return to work.
The court of appeals held that Wink had proven, and the jury determined, that the company retaliated against Wink for asserting her FMLA right to take leave necessary to enable her to take care of her sick child for several hours, two days a week. The court of appeals reasoned that the best inference was that the company was upset at Wink for working at home two days a week, even though her work had not been a problem up until that point. The court of appeals also upheld the award of liquidated damages under the FMLA because the false information given by human resources to Wink about her ability to use FMLA leave could show the employer did not act in good faith to avoid such a penalty.
The employee also cross-appealed, arguing for a higher amount of attorneys’ fees in light of the successful verdict. The district court had reduced them by twenty percent. The court of appeals agreed and directed the district court to award full attorneys’ fees, reasoning that her attorneys were correct to argue two theories under the FMLA, even if only one was successful.
Eighth Circuit
Sieden v. Chipotle Mexican Grill, Inc., __ F.3d __, 2017 WL 370859 (8th Cir. Jan. 26, 2017)
Phillip Sieden began working at Chipotle in 2001. By 2010, he had worked his way to the position of general manager of a newly-built Chipotle location in Vadnais Heights, Minnesota. By 2011, Sieden was promoted to a position called “Restauranteur 3” and was responsible for overseeing the operations of three Chipotle restaurants spread throughout the northern Twin Cities suburbs.
In March 2012, the area manager for Chipotle restaurants in Sieden’s territory, as well as Travis Moe, the team director for all Minnesota Chipotles, visited one of the restaurants under Sieden’s supervision in Crystal, Minnesota. Due to performance issues, they decided to remove the Crystal location from Sieden’s responsibilities. In April 2013, during a managers meeting, Moe allegedly told Sieden that he was hiring “too many Hmong people.” Sieden complained about Moe’s comment after the meeting, but never filed an official complaint with Chipotle. In May 2013, Sieden was demoted to acting manager of only one location in North Maplewood, Minnesota. On June 18, 2013, Moe met with Sieden and terminated his employment due to persistent performance issues.
Sieden sued in Minnesota state court under the Minnesota Human Rights Act (MHRA), bringing claims of reprisal, age discrimination, and sexual orientation discrimination. Chipotle removed the case to federal court and moved for summary judgment. The U.S. District Court for the District of Minnesota granted summary judgment for Chipotle on the reprisal and sexual orientation discrimination claims. The age discrimination claim proceeded to trial, and a jury returned a verdict in favor of Chipotle. Sieden appealed only the district court’s grant of summary judgment on his reprisal claim.
On appeal, Sieden argued that the district court abused its discretion in granting summary judgment because a reasonable jury could have concluded that the record supported a finding that Chipotle’s proffered reason for his termination was pretextual. Sieden argued that: (1) Chipotle’s performance concerns had no basis in fact; (2) Chipotle set him up for failure and increased its scrutiny of his performance after he complained about Moe’s comment; (3) Chipotle’s stated reason for terminating him changed over the course of litigation; (4) Chipotle failed to follow its own disciplinary policies; and (5) Chipotle’s complaints about his performance were based on subjective, rather than objective, considerations.
The 8th Circuit rejected each of these arguments, and affirmed the district court. The 8th Circuit noted that Chipotle’s concerns with Sieden’s performance long predated his complaint about Moe’s comment. Sieden testified at trial that the Chipotle restaurants under his supervision performed very poorly. Further, an annual safety audit at one of Sieden’s restaurants revealed what the area manager called “pretty shocking things” for which Sieden ultimately apologized via email. Sieden had told the area manager that he took “full responsibility for the lack of validation … [and would] not allow myself or my teams to miss the mark on so many easily sustainable items going forward.” Further, Sieden’s latest performance reviews before his complaint were negative, with the evaluator noting “major issues with the dedication” among other serious problems with Sieden’s performance and the performance of the restaurants under his supervision. Because Chipotle’s concern over Sieden’s performance originated before his complaint, the 8th Circuit held that the district court did not abuse its discretion by rejecting Sieden’s argument that Chipotle had no factual basis to terminate his employment.
With respect to Sieden’s other arguments, the 8th Circuit agreed with the district court that he had failed to provide any evidence to support the notion that Chipotle increased scrutiny towards his performance after his complaint or that it failed to follow its own disciplinary procedures. Also, contrary to Sieden’s claim to the contrary, Chipotle apparently never deviated from its assertion that it terminated Sieden’s employment based on performance concerns. Thus, the 8th Circuit affirmed the district court’s grant of summary judgment for the employer.
Guenther v. Griffin Construction Co., Inc., __ F.3d __, 2017 WL 218022 (8th Cir. Jan. 19, 2017)
Semmie John Guenther began working for Griffin Construction in 2008, where he oversaw projects across Arkansas and Texas. Guenther was diagnosed with prostate cancer in 2012. He requested and received approximately three weeks’ leave from work to receive treatment, which was apparently successful. However, in 2013, Guenther learned that the cancer had spread throughout his body. He again requested three weeks’ leave to undergo radiation therapy. Griffin Construction immediately fired Guenther and told him he could reapply for openings in the future if he wished. Despite alleged promises to the contrary, Griffin Construction also terminated Guenther’s insurance policies.
Guenther filed a timely charge with EEOC. However, he died before the EEOC administrative process was complete. A year after Guenther passed away, the EEOC issued a right to sue letter having found probable cause that Griffin Construction violated the ADA. Justin Guenther, special administrator of Semmie Guenther’s estate, sued under the ADA and the Arkansas Civil Rights Act (ACRA) seeking compensatory damages. Griffin Construction filed its answer and moved to dismiss, arguing that Guenther’s claims did not survive his death. The Western District of Arkansas agreed, adopting the Arkansas state tort survival statute as the federal rule of decision to rule that Guenther’s ADA claim abated at his death. The district court ruled for the employer on the pleadings.
On appeal, the 8th Circuit was tasked with determining whether Guenther’s ADA claim for compensatory damages survived his death. Under Arkansas state law, Guenther’s claim would not have survived. But the 8th Circuit declined to apply Arkansas state law in this instance. The court reasoned that incorporating state law under these circumstances would frustrate the specific objectives of the ADA to provide consistent and enforceable standards to address disability discrimination. Allowing abatement of claims for compensatory damages under the ADA poses a special threat to enforcement because victims of disability discrimination are often targeted precisely because of their poor health. Further, applying state law in the context of abatement of ADA claims would undermine national uniformity in the in application of the ADA. It was particularly relevant to the 8th Circuit that Guenther’s claims would have survived in many other states, even within the 8th Circuit. Thus, the 8th Circuit reversed the decision of the district court, and held that federal common law does not incorporate state law to determine whether an ADA claim for compensatory damages survives the death of the aggrieved party. Guenther’s claim for compensatory damages under the ADA therefore survived his death, and the case was remanded.
Rodney v. Board of Regents of the University of Minnesota, __ F.3d __, 2017 WL 405636 (8th Cir. Jan. 31, 2017)
Rodney Raymond worked at the University of Minnesota—Duluth. In 2009, the University received complaints that Raymond violated the school’s sexual harassment policy and other school rules. The University conducted a series of investigations and concluded that Raymond violated school polices. Raymond appealed, alleging that the investigations were biased, involved collusion, and exceeded the scope of the allegations. Further, Raymond asserted that he should have the right to examine and cross-examine witnesses.
In November 2012, Raymond requested that the Board of Regents intervene to address his grievances with the investigations, but the Regents denied Raymond’s request. In April 2013, the University concluded that there was “just cause” to discipline Raymond and terminate his employment. In May 2013, Raymond petitioned for a hearing before the University’s Office of Conflict Resolution (OCR). Although OCR granted Raymond’s request for a hearing, it declined to review the sexual harassment allegations. Raymond challenged the limited scope of the OCR hearing and the neutrality of the presiding officer. In February 2014, Raymond withdrew from the hearing based on the “futility of the process and its inherent unfairness and bias.”
After the University denied Raymond’s request for a post-termination hearing, Raymond filed suit under § 1983, alleging procedural due process violations. The District Court of the District of Minnesota found that Raymond failed to state a claim upon which relief could be granted, because the University’s termination procedures were adequate, and Raymond failed to exhaust state remedies to bring a § 1983 due process claim.
On appeal, the 8th Circuit Court of Appeals first considered Raymond’s pre-termination procedural due process claim. The Court emphasized that pre-termination hearings do not need to be elaborate and must only satisfy three requirements: oral or written notice, an explanation of evidence, and the opportunity for an employee to present their side of the argument. The court found that the University met these minimum requirements, and that Raymond’s complaint about not having the opportunity to examine witnesses suggests that he was entitled to a more formal process than provided under the law.
Second, the court considered whether the University violated Raymond’s post-termination due process rights. Federal law requires a litigant seeking deprivation of procedural due process to exhaust state remedies before stating a § 1983 claim. Although Raymond acknowledged that he did not exhaust state remedies, because he withdrew from OCR’s post-termination process, he argued that the court should “recognize futility as an exception to the exhaustion requirements.” Specifically, Raymond argued that deprivation of certain rights—including the right to examine witnesses and respond to charges—should constitute “futility” and excuse the exhaustion requirement. The court rejected Raymond’s argument, finding that Raymond only speculated that the OCR panel would deprive his rights, and that without pursuing the OCR hearing, there was no indication that the post-termination hearing would be adverse to Raymond.
Ultimately, the 8th Circuit affirmed the district court’s judgment and held that Raymond’s § 1983 procedural due process claims were properly dismissed. In a concurring opinion, Judge Shephard found that Raymond’s argument failed as a matter of law, because existing case law does not recognize “futility” as an exception to a § 1983 procedural due process claim.
By: Frances E. Baillon and Tyler J. Adams
Ninth Circuit
Navarro, et al. v. Encino Motorcars, LLC, 845 F.3d 925 (9th Cir. Jan. 9, 2017)
Plaintiffs are “service advisors” who greet Mercedes-Benz owners as they arrive to the service area of the dealership. They listen to the customers’ concerns about their car, evaluate the repair and maintenance needs of the cars, suggest services to be performed, suggest supplemental services beyond those that will remedy the customers’ concerns, write up estimates, and often follow up with the customer while the repair work is underway to suggest further repairs and maintenance. The defendant, Encino Motorcars, classified these employees as exempt under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § § 201-219, by relying on the exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles[.]” Id. at 213(b)(10)(A). Plaintiffs claimed that Encino Motorcars improperly classified them as exempt and that they were entitled to overtime pay. The district court held that Encino Motorcars correctly classified “service advisors” as exempt.
In 2015, the Ninth Circuit reversed the district court’s decision and deferred, under Chervron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), to a 2011 Department of Labor regulation providing that service advisors are not exempt under the FLSA. In 2016, the Supreme Court granted certiori and held that the Ninth Circuit erred by deferring under Chevron because the Department of Labor had “vacillated” over the years on whether service advisors were exempt and that the 2011 regulation did not provide a reasoned explanation for the most recent change. The Supreme Court then remanded the case back to the Ninth Circuit to determine whether the exemption applied by interpreting the statute and not giving deference to the Department of Labor’s position.
On remand, the Ninth Circuit reached the same result and held that service advisors were not exempt under the FLSA. This time the Ninth Circuit analyzed the statutory text and the legislative history. The Ninth Circuit reasoned that the exemption applied to three job titles: salesman, partsman, and mechanics. It further reasoned that Congress was aware of the position of service advisor (it was in the legislative history) and “could have included ‘service advisors’ in the statutory list” but did not. The Ninth Circuit acknowledged that the term “salesman” might be broad enough to include “service advisors” who sell service repairs, but held that they do not “qualify as salesman primarily engaged in selling cars because they do not sell cars.” The Ninth Circuit further held that “service advisors are not primarily engaged in servicing automobiles” because “the advisor neither performs any repairs nor provides any maintenance.” Accordingly, the Ninth Circuit held that “service advisors” are not exempt under 29 U.S.C. § 213(b)(10)(A).
The Ninth Circuit acknowledged that this decision conflicts with the decisions of the Fourth and Fifth Circuits and the Supreme Court of Montana but explained that it was “unpersuaded by the analysis of those decisions.”
Alaska Airlines Inc. v. Schurke, et al., ___ F.3d __, 2017 WL 360557 (9th Cir. Jan. 25, 2017)
A flight attendant, Laura Masserant, called in sick in May and requested two days off to care for her sick child. Masserant had used all of her sick leave in May. In addition, Masserant had cashed out most of her vacation leave and had scheduled her remaining vacation leave for the upcoming December. Under the Collective Bargaining Agreement (“CBA”), flight attendants scheduled their vacation time in October for the upcoming year, so as to help ensure that each flight was properly staffed. A flight attendant who was out sick and had no more “sick leave” would accumulate “points” under the CBA’s progressive discipline policy. An employee who accumulates too many points is subject to discipline – counseling, warning, and eventually, termination. Masserant claimed an entitlement under the Washington Family Care Act to use her December vacation leave to care for her sick child in May. The Washington statute does not provide an entitlement to leave but provides that an employee is entitled to use any time off to care for a sick child.
Alaska Airlines took the position that Masserant could not use the vacation time scheduled for December to care for her sick child in May. Masserant and the union disagreed with Alaska Airlines. Instead of filing a grievance under the CBA’s grievance procedure, Masserant and the union filed an administrative complaint with the Washington Department of Labor. The Department determined that Massarant was entitled to use her December vacation time in May and fined the airline $200 for violating the statute. The district court granted summary judgment against Alaska Airline’s claim that the Railway Labor Act preempted Massarant’s claim under the Washington Family Care Act. The Ninth Circuit reversed.
The Ninth Circuit stated that “[t]he fundamental question is always whether the state right is sufficiently independent of the collective bargaining agreement to avoid the broad preemption of the National Labor Relations Act and the Railway Labor Act.” The court then applied a “three-step decision tree” to analyze “(1) whether the CBA contains provisions that govern the actions giving rise to a state claim, and if so, (2) whether the state has articulated a standard sufficiently clear that the state claim can be evaluated without considering the overlapping provisions of the CBA, and (3) whether the state has shown an intent not to allow its prohibition to be altered or removed by private contract.” The court reasoned that Masserant’s request for leave is “substantially dependent” on analyzing the CBA to determine if she was entitled to leave and therefore is preempted by the Railway Labor Act. The court then concluded that, under the Railway Labor Act, the claim was a “minor dispute” about defining the rights guaranteed by the CBA and Masserant was therefore required to use the CBA grievance procedure to resolve her claim.
Judge Christen dissented, opining that the flight attendant’s claim was not preempted because the right Masserant asserted arose from the Washington Family Care Act, if it existed at all, and did not depend upon the collective bargaining unit.
Reynaga v. Roseburg Forest Products, ___ F.3d __, 2017 WL 370862 (9th Cir. Jan. 26, 2017)
The Plaintiff, Efrain Reynaga, worked with his son as a millwright for the defendant, Roseburg Forest Products (“Roseburg”). Reynaga worked for Roseburg for six years, while his son worked there for two years. Reynaga and his son were the only Hispanic millwrights at Roseburg. Reynaga asserted claims for racial harassment, disparate treatment, and retaliation under Title VII. The district court granted summary judgment in favor of Roseburn, which the Ninth Circuit reversed.
Reynaga alleged that the lead millwright, Timothy Branaugh, racially harassed him by making facially derogatory comments and engaging in other harassing conduct. The Ninth Circuit held that the following facts were sufficient to create genuine disputes of material fact as to the severity and pervasiveness of Branaugh’s conduct: (1) Branaugh referred to black people as “niggers” and Arabs as “rugheads”; (2) after Reynaga received hunting tags for a second year, Branaugh stated: “I’m a true believe[r] that we should close the borders to keep mother***ers like you from coming up here and killing our elk. I know one mother***er who drew tags back to back”; (3) Branaugh stated: “Minorities are taking over the country”; (4) Branaugh asked, “Efrain, are all Mexican women fat?”; (5) Branaugh, aware that Efrain’s wife is Native American, referred to Native American women as “nasty fat squaws”; and (6) Branaugh left in the break room a printed email containing an article that claimed President Obama was an illegal alien and that “our borders are like sieves.” The Ninth Circuit relied on these statements and other derogatory but non-racially charged statements to hold that “a reasonable trier of fact could conclude that Branaugh’s repeated racially derogatory and humiliating remarks were sufficiently severe or pervasive to create a hostile work environment.”
The Ninth Circuit also found that a reasonable trier of fact could find that Roseburg knew about Branaugh’s misconduct and responded inadequately. Although Roseburg hired an independent company to conduct the investigation, this was not enough. The Ninth Circuit relied on the following two supporting facts: (1) Branaugh continued to harass Reynaga after Reynaga reported the harassment to management in October; and (2) the men were still assigned to the same shift on January 9, 2010, and were in close enough proximity for Branuagh to rev his engine at Reynaga on January 13, 2010.
Reynaga also asserted a claim for disparate treatment. The Ninth Circuit rejected Roseburg’s argument that Reynaga failed to allege a prima facie case of disparate treatment because he did not have evidence that a similarly-situated non-Hispanic individual had been treated differently. The Ninth Circuit held that this prong of the prima facie case could be satisfied with sufficient evidence to give rise to an inference of discrimination based on evidence that non-Hispanic employees were treated more favorably than Reynaga. Here, the Court relied on the following supporting evidence: “Branaugh was hardly reprimanded (and, significantly, not terminated) after several complaints were made about his hostile behavior, and Martin, a white employee, was not subjected to the same lock-cutting intrusion as [Reynaga].” The Ninth Circuit also rejected Roseburg’s claim that it terminated Reynaga for a legitimate, non-discriminatory reason when he walked off the job on Jan. 9 and refused to work on January 13, 2010. The Ninth Circuit held that Reynaga’s refusal to continue working in a hostile work environment (Branaugh was assigned to the same shift on both those days) and Roseburg’s failure to properly discipline Branaugh were sufficient to establish that Roseburg’s claimed reasons for termination were pretextual.
The Ninth Circuit also held that Reynaga presented sufficient evidence to establish a prima facie case of discrimination in connection with the lock cutting incident. Specifically, the Ninth Circuit held that cutting the lock off an employee’s locker constituted an adverse employment action: “Roseburg’s act of breaking into [Reynaga’s] locker witout notice materially affected the terms, conditions, or privileges of [Reynaga’s employment because it was a ‘substantial interference with work facilities important to the performance of the job.’”
Reynaga also asserted a claim for retaliation based on his termination. The Ninth Circuit held that, based on the facts discussed above, Reynaga asserted a prima facie case for retaliation. The Ninth Circuit further found that the Reynaga put forth sufficient evidence (evidence as to how he was treated during his employment, the timing of his termination being one month after his written complaint, and the disparity in punishment between Efrain and Brauagh) “to establish a genuine dispute of fact as to whether Roseburg’s proffered reason for terminating Efrain’s employment was pretextual.”
Judge Bea dissented in part. He opined that the district court properly granted summary judgment on Reynaga’s hostile work environment claim because “Roseburg took prompt and effective action to rectify the hostile work environment experienced by Reynaga and terminated Reynaga only after he repeatedly refused to work his assigned shifts.”
By: Shannon S. Pierce and Fennemore Craig
Eleventh Circuit
Brown Jordan International, Inc. v. Carmicle, ___F.3d___, 2017 WL 359651 (11th Cir. Jan. 25, 2017)
In Brown Jordan International, Inc. v. Carmicle, the 11th Circuit affirmed Judge Rosenberg’s grant of partial summary judgment in the employer’s favor as well as the judgment entered in favor of the employer following a bench trial.
By way of background, Mr. Christopher Carmicle was employed with Brown Jordan, a manufacturer of furniture, from 2002 through his termination in early 2014. During Carmicle’s employment, the new CEO requested Carmicle to enter into an Employment Agreement. Towards the end of Carmicle’s employment, the company began to have doubts of and issues with his employment, but the employer gave him a second chance. Yet, in 2013, Carmicle incurred more unauthorized expenses and the CEO was prepared to terminate his employment for cause, but decided to hold off on the decision as Brown Jordan was in the process of being sold to a new buyer. Around the same time, Brown Jordan began a transition of email services and provided a generic password to employees, instructed them to test their email with the new password. Carmicle was suspicious of a subordinate employee, believing he was lying to him about a personnel issue. He used the generic password to access the email of both of the subordinate employee and Brown Jordan’s CEO and read their emails. He continued to access their email accounts as well as those of others. During this time, he learned of the scrutiny of his expenses. In an attempt to save his job, Carmicle wrote a letter to Brown Jordan’s Board of Directors regarding alleged fraudulent activity of the CEO and others. The Board of Directors hired an investigator, who learned of and reported Carmicle’s email access, that he had incurred over $100,000 of unauthorized expenses, and that his complaints were without merit. He was terminated for cause.
At litigation, the employer and employee, Mr. Carmicle, filed cross-complaints, and the matter was consolidated. Judge Rosenberg granted summary judgment in favor of the employer and the district court conducted a bench trial with judgment granted on behalf of the employer. On appeal, Mr. Carmicle challenged the court’s decision in favor of the employer’s claims under the Computer Fraud and Abuse Act (CFAA), the Store Communications Act (SCA), wrongful discharge under KY law, and breach of an employment agreement for his termination for cause. As it relates to the CFAA claim, Carmicle asserted that Brown Jordan did not suffer a loss because he did not damage their computer system and that there was no interruption of service. However, the 11th Circuit disagreed, determining that the loss was the payment to the outside consultant and contractor who swept the building for surveillance devices placed by Carmicle and for research to determine how Carmicle accessed the emails. The 11th Circuit determined that an individual can suffer a compensable loss independent of interruption of service and that the loss is reasonable when it is done in course of responding to an offense, like here. Regarding the SCA claims, Carmicle asserted that he did not violate the Act because the emails were not held in “electronic storage,” and because his email access was authorized. While recognizing a split in authority, Carmicle argued that a “more reasonable” reading of the SCA would exempt previously opened emails from the statute. Side stepping the issue, the 11th Circuit again declined to address the circuit split, concluding that Carmicle did not fairly present the unopened-versus-opened-email issue to the district court, and therefore, it was unable to reach the merits on first impression. As it relates to the authorized email access, the 11th Circuit determined that Carmicle’s arguments on appeal were waived or failed on the merits, thus affirming the 11th Circuit conclusion.
As such, the 11th Circuit affirmed the district court’s conclusion that Carmicle’s CFAA arguments failed because the employer suffered a “loss” as defined by the CFAA and that the employer showed Carmicle exceeded his authorization in accessing emails of other employees – a fatal flaw to his SCA claim. The 11th Circuit affirmed that he was not wrongfully terminated under Kentucky law nor did he have a breach of contract for termination for cause.
By: Lindsey Wagner
D.C. Circuit
800 River Road Operating Company, LLC v. National Labor Relations Board, ___F.3d___, 2017 WL 343542 (D.C. Cir. Jan. 24, 2017)
D.C. Circuit affirms NLRB’s refusal to hear testimony of witnesses where employer could not make any proffer of witnesses’ direct knowledge.
In 800 River Road Operating Company, LLC v. National Labor Relations Board, the D.C. Circuit rejected a slew of procedural from an employer relating to the exclusion of witnesses from a representation hearing. After a union representation election, the employer challenged the vote in favor of representation on the grounds that certain supervisor employees had created a coercive atmosphere during the election by supporting the union. At a hearing, the witnesses called by the employer generally denied any wrongdoing or knowledge of wrongdoing.
After hearing several witnesses so testify, the hearing officer refused to issue 6 additional subpoenas sought by the employer on the ground that the employer could not adequately assure the hearing officer that the witnesses had firsthand knowledge of wrongdoing. The employer could not make that assurance because the witnesses had all exercised their right under NLRB precedent to refuse to speak with the employer prior to the hearing. The hearing officer also refused to hear the testimony of 8 previously-subpoenaed witnesses, but did state that 5 witnesses who the employer had previously interviewed could testify. Rather than proceed to the hearing’s third and final day under those conditions, the employer refused to continue to participate in the remaining proceedings, and the hearing officer overruled the employer’s objections to the election.
With respect to the issuance of the 6 additional subpoenas, the court held that while it was error for the NLRB to refuse to issue the subpoenas, the error was harmless. First, the court noted that the employer’s voluntary choice to discontinue its participation before finishing its presentation made it impossible to separate the harm from the denial of subpoenas from the harm the employer created by truncating the hearing. Second, the employer presented no concrete evidence that the testimony of the employees it sought to subpoena would have been material. Finally, the court found that in the context of this case, where a parade of the employer’s witnesses over 2 days had testified inconsistently with the employer’s offer of proof, it was reasonable for the hearing officer to insist upon a more substantial proffer before allowing several additional witnesses.
By: Jack Blum