June 2017

June 2017 Circuit Updates

Second Circuit

Pollard v. New York Methodist Hosp., ___ F.3d ___, 2017 U.S. App. LEXIS 11676 (2d Cir. June 30, 2017).

The Court vacates the grant of summary judgment in this case brought under the Family and Medical Leave Act, holding that the jury could find the plaintiff suffered a serious medical condition as a result of her foot condition and follow-up treatment. Plaintiff worked as a medical files clerk, a job that required her to stand and walk for most of the day. After her doctor determined that surgery was necessary on plaintiff’s foot and that she suffered a “serious health condition,” plaintiff failed to report to work on the day of surgery and was terminated. The Court of Appeals holds that the district court erred in concluding that the foot growth was not a “serious health condition” because the treatment for her condition was complete once the growth was removed from her foot. Instead, the Second Circuit held, “this analysis depended on an excessively narrow concept of ‘treatment’ that is not consistent with the [FMLA] regulation. We see no reason why post-surgical change of dressing and removal of sutures does not qualify as part of the treatment of the condition that occasioned the surgery — at least if such postoperative treatment was medically predictable from the outset.”

Submitted by:
Stephen Bergstein

Third Circuit

De Ritis v. McGarrigle, et al.,___F.3d___,2017 WL 2802636 (3rd Cir. June 29, 2017).

Joseph De Ritis was employed as an Assistant Public Defender in Delaware County, Pennsylvania. Within two years of employment in that position he had become a member of a “trial team,” or a group of three attorneys assigned to handle trials in a particular judge’s courtroom. But after four and one-half years as a trial team member, he was returned to the juvenile court unit, a less senior position. The stated reason for this action was the need to reassign staff after another Assistant Public Defender had been involved in a motorcycle accident. But De Ritis suspected a different reason: That he had been demoted for being too zealous in taking cases to trial and for not having his clients plead guilty “fast enough,” contrary to the alleged wishes of Delaware County’s President Judge. He based this conclusion on statements allegedly made to him by the First Assistant Public Defender and by a former fellow Assistant Public Defender, although the latter admitted that his statement to De Ritis was based on “fourth-person hearsay” he heard during after-work gossip sessions. De Ritis assumed the truth of these statements without confronting the Public Defender or making any other effort to verify their truth.

De Ritis proceeded to spread the story that he had been demoted because his clients did not plead guilty “fast enough.” He informed judges, private attorneys, and his colleagues at the Office of the Public Defender that he was “being punished” for “taking too many cases to trial.” His spreading of this story intensified after he was reassigned (at his request) to the preliminary hearing unit, including informing one judge that he was being punished for having allegedly violated an alleged “policy” of the Public Defender to plead as many defendants as guilty as possible “in order to more easily dispose of the cases assigned to us.” When a hoped-for assignment to the trial team for a newly-elected judge failed to materialize, De Ritis separately approached the County Counsel and the chairman of Delaware County’s governing body to report that he had been punished for taking too many cases to trial, raising the concern that this action “was violating the rights of his clients” due to “the constitutional implications of public defenders being demoted because they advise defendants to seek trials.” When word of what De Ritis was alleging finally reached the Public Defender, he confronted De Ritis, who admitted that he had made this allegation to attorneys, judges, and County officials. The Public Defender thereupon fired De Ritis.

De Ritis then sued a variety of County and court officials under a variety of legal theories. Of particular note, he sued the Public Defender under 42 U.S.C. Sec. 1983, alleging that the decision to fire De Ritis was based on De Ritis’ constitutionally protected speech, and was therefore in violation of De Ritis’ First Amendment rights. The Public Defender moved for summary judgment after the close of discovery under the qualified immunity doctrine. That doctrine provides public officials with immunity from suit if the defending government officials did not violate a statutory or constitutional right or, even if they did, if that right was not “clearly established” at the time of the challenged conduct. The District Court denied the motion. The Public Defender took an immediate appeal under the “collateral order” doctrine. The Third Circuit reversed, finding that De Ritis’ statements were not constitutionally protected, and that the Public Defender had therefore not violated De Ritis’ constitutional rights.

The “collateral order” doctrine allows the immediate appeal of orders that “finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred.” The “collateral order” doctrine permits the immediate appeal of orders denying qualified immunity when the denial is based on an issue of law, not of fact. Such a case was presented here. The facts assumed by the District Court are taken as given and are viewed in the light most favorable to the non-moving party.

A public employee’s speech is protected by the First Amendment only if (1) the employee spoke “as a citizen (and not as an employee),” (2) the employee’s speech involved “a matter of public concern,” and (3) the public employer lacked an “adequate justification” for treating him differently from the general public, based on a balancing of the employee’s and the employer’s interests under Pickering v. Board of Education, 391 U.S. 563 (1968).

De Ritis’ claim to have been demoted for taking too many cases to trial constituted speech as an employee, not speech as a citizen, when it was made to attorneys and judges while he was in court. Public employees are not speaking as citizens for First Amendment purposes when they make statements pursuant to their official duties. More specifically, “an employee does not speak as a citizen if the mode and manner of his speech were possible only as an ordinary corollary to his position as a government employee.” This is a “practical” inquiry that assesses whether the speech at issue is itself ordinarily within the scope of the employee’s duties. De Ritis’ in-court statements to attorneys and judges fell within the scope of his duties as an Assistant Public Defender because his duties included building rapport with the court and with other attorneys. Attorneys are officers of the court, and even their idle, off-the-record chatter constitutes “{o}fficial communications” with “official consequences.” Offhand in-court statements may affect the judicial process, and may be taken as “a proxy for the positions of both {the attorney’s} clients and … employer.” As such, De Ritis’ in-court statements regarding the alleged reason for his demotion failed to meet the first requirement for public employee speech to receive First Amendment protection.

De Ritis’ out-of-court statements to attorneys about his demotion arguably constituted citizen speech because they were not made within the scope of his official duties. However, those statements do not receive First Amendment protection because they did not relate to a subject of general interest, value and concern to the public, either as a matter of political, social or other concern or as a matter of legitimate news interest. This determination requires a particularized examination of each statement that takes into account the statement’s content, form and context, the employee’s motivation, and whether it is important to our system of self-government that the expression take place. Speech that addresses only the employee’s own problems is merely a personal grievance that does not receive First Amendment protection even if the employee’s problems “brush … against a matter of public concern.” De Ritis’ out-of-court statements to other attorneys addressed only his own employment situation, did not rise above the level of an unprotected personal grievance, and therefore failed to meet the second requirement for public employee speech to receive First Amendment protection.

In contrast, De Ritis’ statements the County Counsel and the chairman of Delaware County’s governing body did raise matters of public concern. His statements to these two individuals went beyond De Ritis’ own employment situation and raised the question of the constitutional rights of criminal defendants generally. However, those statements failed to meet the third requirement for First Amendment protection: the Pickering balancing test. Despite his raising of criminal defendants’ rights, De Ritis’ speech remained “more a private grievance than an instance of legitimate whistleblowing, and thus we accord De Ritis’s side of the scale lesser weight.” And “{m}ore importantly, De Ritis’ ‘continued failure to verify and substantiate’ his allegations points up his ‘self-interest.’” The Third Circuit specifically held “as a matter of law, that a person’s speech is recklessly false when he disseminates ‘gossip’ in the form of ‘fourth-person hearsay’ and chooses to do so for ‘six months or eight months’ without investigating its truth.”

On the other hand, the Public Defender’s countervailing interest as an employer in treating De Ritis’ speech differently than that of the general public was substantial. De Ritis had impugned the Public Defender’s integrity, and the integrity of his colleagues, by accusing them of appeasing the President Judge at the expense of their clients’ rights. De Ritis’ statements also had the tendency to undermine the effectiveness of his working relationship with the Public Defender, “whose positions {De Ritis} represents before the courts and the public.” Such “close working relationships” require “personal loyalty and confidence.” In this context, “the potential disruptiveness” of De Ritis’s speech was considerable. Thus, “{u}nder the Pickering balancing test, De Ritis’s interest in disseminating ‘fourth-person hearsay,’ gleaned from after-work ‘gossip,’ … pales in comparison to the ‘potential disrupt{ion}’ it could have caused to the Public Defender’s Office.”

Because the Public Defender had not violated De Ritis’ constitutional rights, the Public Defender was entitled to qualified immunity from suit on De Ritis’ First Amendment claim under 42 U.S.C. Sec. 1983.

Submitted by:
Stephen E. Trimboli
Trimboli & Prusinowski, L.L.C.

Fourth Circuit

Villa v. Cavamezze Grill, LLC, 858 F.3d 896 (4th Cir. 2017).

An employee informed the director of her company that two former colleagues had reported that a manager offered to give them raises in exchange for sex. The director spoke with the colleagues, both of whom denied that manager ever made any such sexual statements. The director thus concluded that the employee had made up the allegations. The company terminated the employee for filing a false report.

The employee sued the company for Title VII retaliation. During depositions, one of the former colleagues admitted that she had in fact reported the manager’s sexual advance, even though no such advance had ever occurred. The company moved for summary judgment on the basis that its belief that the employee made up the allegations was the true basis for her termination and was not a pretext for discrimination. The district court granted summary judgment for the company.

The employee argued that because she made the allegations about the sexual advance in good faith, her termination constituted illegal retaliation no matter what the company believed. The Fourth Circuit disagreed, noting that Title VII retaliation claims require proof that the employer’s desire to retaliate was the but-for cause of the adverse employment action. Here, because the company did not realize that the employee was engaging in protected conduct, the company could not have acted out of a desire to retaliate for that conduct. The Fourth Circuit noted that it was not the Court’s job to decide whether an employment action that falls outside Title VII protections is fair or correct. Accordingly, the Fourth Circuit affirmed the district court’s decision to grant summary judgment for the company.

EEOC v. Consol Energy Inc., 860 F.3d 131 (4th Cir. 2017).

An employer implemented a biometric hand-scanner system to track employees’ hours. A coal miner, who was a devout evangelical Christian, requested a religious exemption from the scanner. The coal miner expressed to the employer his belief that the scanner would cause him to be “marked” with the Mark of the Beast, thereby showing allegiance to the Antichrist. The employee submitted letters from his pastor further explaining the need for the religious exemption. Understanding that the Mark of the Beast was associated with the right hand only, the employer offered to allow the employee to use his left hand on the scanner. The employee submitted additional letters describing why that accommodation would be insufficient.

The employer ultimately permitted other employees with hand injuries to bypass the scanner, but did not provide the same exemption to the coal miner to accommodate his religious beliefs. The coal miner retired rather than use the scanner.

The Equal Employment Opportunity Commission sued on behalf of the coal miner for constructive discharge based on a failure to accommodate the coal miner’s religious beliefs. A jury returned a verdict for the EEOC, granting compensatory damages and lost wages, but denying punitive damages. Both parties appealed.

Under Title VII, an employer must make a reasonable accommodation for the religious observances of its employees short of incurring an undue hardship. An employee claiming a failure to accommodate must show that he has a sincerely held religious belief that conflicts with an employment requirement, that he informed the employer of the belief, and that he was disciplined for failing to comply with the employment requirement.

The employer argued that it did not fail to accommodate the coal miner’s religious belief because the scanner did not in fact “mark” the coal miner. According to the employer, therefore, no conflict existed between the scanner and the coal miner’s religious beliefs. The Fourth Circuit disagreed, holding that there was sufficient evidence that the coal miner’s belief that he was being marked was sincerely held and that the sincerely-held belief conflicted with the employment requirement. The Court specifically noted that it was neither the employer’s nor the Court’s place to question the correctness or plausibility of the employee’s religious understanding.

The employer next argued that the coal miner did not suffer an adverse employment action since he voluntarily retired. The Fourth Circuit applied the test from the Supreme Court’s recent decision in Green v. Brennan, 136 S. Ct. 1769 (2016), to determine whether there was sufficient evidence that as a result of the employer’s discriminatory conduct, the employee was subjected to circumstances “so intolerable that a reasonable person would resign.” The Fourth Circuit found that sufficient evidence existed in this case.

The EEOC cross-appealed, challenging the district court’s order granting judgment as a matter of law for the employer on punitive damages. The Fourth Circuit noted that punitive damages are permitted under Title VII only in cases of malice or reckless indifference by the employer. To meet the reckless indifference standard, an employer must actually know of the risk that its conduct would violate Tile VII and act despite that subjective knowledge. The Fourth Circuit held that insufficient evidence of such reckless indifference existed in this case. The fact that the employer’s efforts to accommodate fell short did not, in itself, rise to the level of indifference required for punitive damages.

Accordingly, the Fourth Circuit affirmed the district court in all respects.

Submitted by:
Paul Sun
Emily Erixson

Fifth Circuit

Borcik v. Crosby Tugs, LLC, 858 F.3d 936 (5th Cir. 2017).

Eric Borcik brought an environmental whistleblower claim under La. Rev. Stat. §30:2027 against his employer Crosby Tugs alleging that he was terminated in retaliation for reporting environmental violations. At trial, the judge instructed the jury that “good faith” under the statute required “an honest belief that an environmental violation occurred and that [the employee] did not report it either to seek an unfair advantage or to try to harm his employer or another employee.” On appeal, the Fifth Circuit determined that it was not in a position to make an Erie guess, so it certified the question to the Louisiana Supreme Court.

In response to the Fifth Circuit’s certified question as to the meaning of “good faith” under the statute, the Louisiana Supreme Court held that “good faith” means that an employee is acting with an honest belief that a violation of an environmental law, rule or regulation occurred. Borcik v. Crosby Tugs, LLC, 2017 WL 1716226 (La. 5/3/17). Based on that definition, the Fifth Circuit found the trial court’s jury instruction erroneous because it required a finding of more than an honest belief that a violation had occurred. The Court then remanded the case for further proceedings before the district court

Welsh v. Fort Bend Independent School District, ___ F.3d ___, 2017 WL 2684490 (5th Cir. June 22, 2017).

School teacher Guadalupe Welsh filed an EEOC charge alleging discrimination and retaliation on August 15, 2012. She amended the charge on June 19, 2014 to allege that the discrimination and retaliation was ongoing, and she received her right to sue letter on June 30, 2014. Welsh filed suit in state court on September 26, 2014 alleging she was not promoted based on her sex, national origin and age and that she was retaliated against after her 2012 EEOC charge (Welsh I). In response to Defendant’s plea to the court’s jurisdiction on the basis that the claim was barred by the statute of limitations because suit was filed more than two years after the EEOC charge, the court dismissed the case on January 9, 2015.

Welsh then filed a new EEOC charge based on discrimination allegedly occurring between April 3, 2014 and December 19, 2014. She received a right to sue letter on May 12, 2015 and filed suit in the Southern District of Texas (Welsh II). Defendant moved to dismiss Welsh II on the basis of res judicata based on Welsh I. The trial court granted dismissal and Welsh appealed.

As Welsh I was filed in Texas state court, the Fifth Circuit applied Texas res judicata principles. In assessing the Texas requirement that the claims in the second case “were raised or could have been raised,” the Court found that not all of the events at issue in Welsh II occurred before the filing of Welsh I and not all of the claims in Welsh II were exhausted at the time of the Welsh I. Given Texas Supreme Court precedent holding that claim preclusion does not apply to claims that could not have been brought due to a legal hurdle to asserting them in the prior suit, the court concluded that the claims in Welsh II were not mature at the time of Welsh I and did not bar Welsh from pursuing them in Welsh II. Relying on Texas Supreme Court precedent and procedural rules, the Court rejected the argument that a party must amend a pending lawsuit to assert new claims that arise during the pendency of suit. The court also recognized the impracticality of requiring a plaintiff to amend a case and seek a stay to file an EEOC charge on every act of discrimination that may occur after the filing of an initial suit. The court found that the only claims in Welsh II that were barred by res judicata were those that were mature at the time Welsh filed Welsh I. It remanded the case for the district court to determine which claims were mature and which were not.

Credeur v. Louisiana, ___ F.3d ___, 2017 WL 2704015 (5th Cir. June 23, 2017).

Renee Credeur worked as a litigation attorney in the Louisiana Department of Justice’s Medical Malpractice Section. After a kidney transplant in 2010, the DOJ granted her an ADA accommodation allowing her to work from home for six months. In 2013, she experienced complications from the kidney transplant and took FMLA leave. After she exhausted her FMLA leave, she requested an accommodation of working from home. Her physician provided a medical evaluation recommending she begin working from home doing as much as possible and slowly incorporate herself back to office hours as she gains strength and endurance. In October 2013, the DOJ granted an accommodation of allowing her to work from home with the goal of reintegrating her back to normal work hours and duties.

In January 2014, the DOJ emailed plaintiff an ADA Supplemental Request for Medical Status form. In response, plaintiff obtained evaluations from three different physicians who issued conflicting opinions as to her capacity to work in the office. Two physicians said she could begin to work in the office, one opining that she could work in the office 3-4 hours per day and another indicating she could work in the office “as tolerated.” The third physician opined that she could not work in the office at all for another six months. The DOJ advised that it was not possible for a litigation attorney to work from home on a long-term basis, requested an updated medical status evaluation from her treating physician, and indicated that her employment would have to be re-evaluated considering her inability to perform the essential job functions of a litigation attorney (i.e., regular office attendance). Plaintiff responded that she had terminated the physician who indicated she could not return for six months and indicated that she could take depositions, fly for depositions and attend hearings and trials. The DOJ and Plaintiff then met and determined that Plaintiff was required to work 3-4 hours per day in the office as tolerated and not to work from home. She was directed to complete leave slips for the remaining hours she could not work in the office. Plaintiff did not return to the office for several weeks, after which she was presented with a Last Chance Agreement informing her of deficiencies in her performance and the required corrective actions. Plaintiff refused to sign the Last Chance Agreement and she did not return to work, instead requesting FMLA leave. While on FMLA leave, Plaintiff notified the DOJ that she had a contagious infection following hospitalization and requested that she be allowed to work from home rather than remain on leave. Two weeks later, the DOJ received a medical evaluation indicating that Plaintiff could not work in the office or attend court hearings, conference or depositions until she was cleared of infection, which would be re-evaluated the next month. The DOJ denied the request to work from home, but allowed plaintiff to take unpaid leave after her FMLA leave expired. On August 22, 2014, Plaintiff provided a medical release to return to work without restriction. Plaintiff then voluntarily resigned on December 31, 2014.

Just two days before providing the unrestricted return to work certificate, Plaintiff filed suit against the DOJ. After discovery, the trial court granted summary judgment dismissing the case. The court dismissed the ADA claim on the basis that Plaintiff was not a qualified individual with a disability under the ADA because she could not perform an essential function of her job (regular attendance in the office), and alternatively, no reasonable juror could find that the DOJ failed to reasonably accommodate Plaintiff’s known limitations. As to the harassment claim, the court found that the cited conduct did not constitute harassment or, if it did, it was not sufficiently severe or pervasive to alter a term or condition of employment. The retaliation claim was dismissed on the basis that Plaintiff failed to demonstrate any adverse action against her.

On appeal, the Fifth Circuit affirmed. Recognizing the lack of dispute as to Plaintiff’s disability and the DOJ’s knowledge of the disability and associated limitations, the court addressed whether Plaintiff could perform the essential job functions as necessary to be a “qualified” individual with a disability under the ADA. Citing the ADA text and related regulations, the court concluded that Plaintiff’s subjective opinion that regular office attendance was not an essential part of her job was insufficient to create a material dispute of fact in the face of the employer’s judgment that regular office attendance was an essential job function. The court noted that the ADA expressly requires consideration of the employer’s judgment as to essential job functions and neither the ADA nor any related regulations suggest that the employee’s opinion is relevant to that determination. Noting that the cited work criticism and even threats of termination did not satisfy the standard for a harassment claim, particularly when the employer demonstrates legitimate grounds for the concern or criticism, the court affirmed dismissal of the harassment claim. The court further recognized that an employer’s imposition of reasonable work-related conditions to transition an employee back to the office after illness does not constitute actionable harassment. The retaliation claim failed because the cited conduct did not rise to the level of material adversity needed to establish actionable retaliatory conduct.

Submitted by:
Donna Phillips Currault

Seventh Circuit

EEOC v. AutoZone, Inc., 860 F.3d 564 (7th Cir. 2017).
 
The plaintiff brought suit under Title VII, alleging he was discriminated against because of his race, black, when the defendant transferred him out of a store located in a Hispanic neighborhood. The plaintiff worked as a sales manager for the defendant for four years, during which he was transferred several times to various Chicago-area stores. None of the transfers entailed any loss in pay, benefits, or job responsibilities.

Writing for a three-judge panel, Circuit Judge Diane Sykes affirmed the district court’s summary judgment decision in favor for the defendant. The Seventh Circuit’s decision was ultimately based on the answer to the following question: Did the EEOC present sufficient evidence from which a reasonable jury could conclude that the plaintiff’s transfer adversely affected his employment? The answer was “no,” striking down the EEOC’s argument that a Title VII subsection (a)(2) claimant is not required to prove that the challenged action adversely affected his employment opportunities or had a tendency to do so. Such interpretation, wrote Judge Sykes, defeats the purpose of the statutory language, “‘deprived or tended to deprive’ the employee of employment opportunities ‘or otherwise adversely affected his status as an employee.’”

Upon concluding, the Seventh Circuit also rejected the defendant’s argument that the lack of an adverse employment action defeats a suit under Title VII subsection (a)(2). A lack of adverse employment action does not automatically mean that there was no tendency to deprive a person of employment opportunities. This distinction reflects the Court’s preservation of a broader statutory interpretation of Title VII subsection (a)(2). Nonetheless, here, the evidence failed to suggest that the plaintiff’s employment transfers tended to deprive him of any job opportunity. For these reasons, the Court affirmed the summary judgment decision in favor for the defendant.

Hanson Cold Storage Co. v. NLRB, 860 F.3d 911 (7th Cir. 2017).

The employer refused to bargain with the union after a representation election, which had resulted in the union’s favor, because the validity of one ballot was in dispute. Eighteen ballots were cast in favor of the union’s representation; seventeen cast against it. The determinative votes were cast by an employee on medical leave and an unknown voter, whose marking on the ballot was unclear. The NLRB (“Board”) determined the unknown ballot was cast in favor of a union representation.

The Seventh Circuit overturned the Board’s decision, holding that the voter’s intent was unclear as reflected by the irregular markings on the ballot. While the Court respects the Board’s discretion, Circuit Judge Michael Kanne nonetheless wrote the Board incorrectly applied its longstanding policy (derived from Kaufman’s Bakery) of “regard[ing] a mark in only one box, despite some irregularity, as presumptively a clear indication of the intent of the voter.” The ballot at issue had a large “X” mark that touched the “Yes” box, but the “X” extended far outside of the box, and had indecipherable scribbling both inside and outside of the box. Because the voter’s ballot was unclear, the Seventh Circuit held the Board should not have applied the Kaufman’s Bakery policy in the first place because the policy presumes the voter intent is clear. If the Board’s goal in these ballot cases is to discern and effectuate the voter’s intent, then a ballot that has scribbles provides absolutely no indication of how the voter intended to vote.

In addition, the Seventh Circuit also addressed the dispute over the validity of the ballot cast by an employee on medical leave. While the Board considered the issue moot, the Court disagreed because that ballot, like the unknown voter ballot, was outcome determinative.

DeKeyser v. ThyssenKrupp Waupaca, Inc., 860 F.3d 918 (7th Cir. 2017).

In 2008, the plaintiffs were conditionally certified for a Fair Labor Standards Act (FLSA) class action that alleged all six foundries (located in Wisconsin, Indiana, and Tennessee) violated the FLSA by not compensating the workers’ time spent on changing clothes and showering on-site at the end of each shift. As the defendant moved to decertify the collective-action class, the Wisconsin employees moved to certify under Rule 23. At the district court level, the Wisconsin employees were certified accordingly, but the claims of the Indiana and Tennessee plaintiffs were severed and transferred to respective states.

Writing for the Court, Circuit Judge Richard Posner affirmed the district court’s decision in certifying the Wisconsin class and decertifying those opting in from Indiana and Tennessee. In DeKeyser I, upon remand, the district court judge ruled that the plaintiffs would prevail if they “convince the finder of fact that changing clothes and showering at work will significantly reduce the risk to the health of the employee.” Thus, the plaintiffs put on an expert witness, a certified industrial hygienist, who presented evidence that changing out of one’s work clothes and showering immediately after the standard eight-hour workday reduces “foundry dust” skin contamination twelve-fold and thus considerably reduces the risk that such contamination poses to an employee’s health. The defendant rebutted that the health risks varied across workers and thus should not be entitled to be paid for the time spent showering and changing on-site. But the defendant neither identified any comparators nor did it challenge the plaintiff’s expert testimony. Therefore, the court below did not err in concluding that the plaintiffs have produced common evidence as required under Rule 23 class certification.

Judge Posner briefly considered, and rejected, the defendant’s objection to severing the claims of the plaintiffs from Indiana and Tennessee. The Seventh Circuit explained that Rule 23(f) appeals are limited to those issues related to the class certification decision. Here, the defendant wants to dismiss the claims, not challenge the class certification decision – this appeal is therefore moot.

Circuit Judge Daniel Manion authored a concurrence, reiterating his support for the majority’s opinion but cautioning against over-reading the majority’s opinion as an endorsement of irregular proceedings. Judge Manion clarified that the majority’s opinion only decided that the Tennessee and Indiana subclasses do not have sufficient claims in common with the Wisconsin subclass to proceed as a single action; the Court did not decide that the Tennessee or Indiana subclasses lacked substance to be certified in their own class. District judges retain “wide discretion to manage collective actions.” This decision should be left for the respective district courts to decide. “This case is a mess”, wrote Judge Manion, “and has gone on for far too long,” but certifying the Wisconsin plaintiffs was rightfully so.

Submitted by:
Jin To

Eighth Circuit

Donathan v. Oakley Grain, Inc., ___ F.3d ___, 2017 WL 2785444 (8th Cir. June 28, 2017).

Donathan was a good employee with a good work ethic, with no record of poor performance reviews or prior discipline. After learning that other employees had received “harvest and safety bonuses” at another facility, she sent an email to the President of both companies complaining that she did not receive a bonus and that the new employees she was required to train, were starting at higher rates of pay. Defendant’s bonus policy treated outdoor workers as eligible for safety bonuses and workers at profitable facilities as eligible for harvest bonuses, thus under policy Donathan was not eligible. Donathan argued in her letter that her duties included outdoor work such that she should have been bonus eligible. Defendants presented evidence that the facility Donathan worked at had never been profitable and that Donathan was not an outdoor worker.

Eight days after Donathan sent her email, Defendant terminated the employment of five workers (three temporary outside workers and two regular workers) including Donathan. The termination letters explained the terminations were attributable to a lack of work, and indicated the company hoped it could employ the workers in the future. The notices did not instruct employees to work the remainder of the day nor did the notices instruct the employees to leave work immediately. Donathan left after receiving the notice, but the other four terminated workers finished the workday. The following Monday, Defendant hired back the three temporary outside workers after securing a new grain contract the Saturday after Donathan’s termination, thus, creating a surprise new demand for labor. Defendant also hired a replacement for Donathan. The replacement was not licensed to weigh and grade grain (as Donathan was) and did not possess experience similar to Donathan.

Donathan filed an EEOC complaint, received a right-to-sue letter, and filed the present action. Donathan alleged wage discrimination and retaliation in violation of the Equal Pay Act, Title VII, and the Arkansas Civil Rights Act. The district court granted summary judgment on the discrimination claims, and Donathan did not appeal that ruling.

Regarding the retaliation claims, the court noted that it is undisputed that Donathan’s email complaining of unequal pay based on sex was a protected act. The Court of Appeals agreed with the district court that the alleged retaliatory act was the termination, and the failure to rehire may also constitute retaliation. Defendants explained the three seasonal laborers who had just been terminated were rehired, because Donathan alone had failed to finish the workday on the Friday of the terminations. Defendants argue that Donathan’s failure to complete the workday was intervening unprotected conduct separate and apart from earlier protected actions. The court rejected this argument because a “rational jury could find impermissible retaliatory animus was the but-for cause of Donathan’s Friday termination, we cannot view the hiring decision the following working day on a clean slate.” Furthermore, the Court discussed that because Donathan’s replacement (out of purported necessity to address the “surprise” Saturday order) remained in position well over a year, and the position remained preserved through many years of seasonal layoffs, at no time did Defendant intend to leave Donathan’s position unfilled. In light of the de minimis nature of the purported infraction (leaving the workplace upon termination when not having been asked to remain) and the fact that a reasonable jury could conclude the employer’s Friday morning animus still drove the Monday decisions, the Court of Appeals reversed the judgment of the district court.

Markham v. Wertin, ___ F.3d ___, 2017 WL 2800723 (8th Cir. June 29, 2017).

Local 545 offers a joint apprenticeship and training program. Participants must complete the program before they can become journeymen or be eligible for full union representation. Markham enrolled in the apprenticeship and training program in 2008. In May 2013, he lost consciousness while on a lunch break during an on-the-job training assignment. Markham returned to work later that day, but he called in sick the next day. Wertin, the supervisor of the apprenticeship and training program, and an authorized agent of Local 545, thereafter informed Markham that he had been terminated from the assignment and instructed Markham to submit a doctor’s note documenting the reason for his absence, which Markham did. Markham suffers from Crohn’s disease. The doctor’s note indicated that he had tested positive for tetrahydrocannabinol (THC), the active compound in marijuana, but also explained that Markham had been prescribed a legal synthetic version of THC to treat his Crohn’s Disease. A urinalysis indicated no presence of marijuana in Markham’s system.

On June 11, 2013, Markham was told that he was placed on probation. Markham expressed to Wertin his belief that he had been placed on probation because of his illness. Thereafter, Markham was not assigned to any on-the-job training until January 2014, and even then his training opportunities were “drastically reduced compared to other members of the Program, including those with fewer hours completed.”

Markham was unable to accrue on-the-job training hours as quickly as his peers and was removed from the program before he had completed it. Although Markham attended two union meetings in an attempt to appeal his dismissal, he was never readmitted to the apprenticeship and training program. Markham filed a petition in the Circuit Court of Buchanan County, Missouri. After removing the action to federal district court, Local 545 moved to dismiss the action, submitting in support of the motion the relevant collective bargaining agreement (CBA) and the statement of policies for apprentices, which Local 545 maintained was incorporated by reference into the CBA. Wertin answered the petition, denied the allegations that he aided and abetted any violation of Markham’s rights, and later filed a brief in support of removal and dismissal of Markham’s lawsuit. Markham moved to remand the case to state court and later sought leave to amend the petition.

The district court determined that Markham’s claims implicated the CBA and the accompanying standards for apprentices and thus were completely preempted by Labor Management Relations Act (LMRA). In addition, the district court concluded that Markham’s claims of discrimination were completely preempted by Section 9 of the National Labor Relations Act (NLRA) because they were, in effect, claims of breach of Local 545’s duty of fair representation. Because Markham’s claims constituted “a hybrid § 301/duty of fair representation action,” the district court dismissed the suit as barred by the six-month statute of limitations that applies to such claims and denied, as futile, Markham’s motion for leave to amend.

The Court of Appeals reasoned that because the discriminatory acts alleged by Markham only arguably violate the Union and Wertin’s duty of fair representation and absent clear indication from Congress or an apparent conflict between Markham’s state law claims and the unions federal duty of fair representation, the court is unable to find that the preemption force “is so extraordinary” that is converts Markham’s state law complaint into one stating a federal claim for purposes of the well plead complaint rule. The Court of Appeals held that Markham’s state law claims were not completely preempted by the LMRA or the NLRA and the district court lacked removal jurisdiction over the case. The case was remanded to district court with direction to remand to state court from which it was removed. The Court of Appeals did not reach the question whether the motion for leave to amend was properly denied.

Edwards v. Hiland Roberts Dairy, Co., ___ F.3d ___, 2017 WL 2743090 (8th Cir. June 27, 2017).

Smith and Edwards were Hiland Dairy employees and worked at Hiland Dairy’s facility in Omaha, Nebraska as part of a sanitation crew, responsible for equipment maintenance between the facility’s production cycles. On July 26, 2013, Smith, at Edwards’ request, used Edwards’s company-issued identification card to clock Edwards out after Edwards had left the facility, in violation of Hiland Dairy’s timecard policies. Smith initially did not admit to clocking Edwards out, but later confessed when confronted with a video recording of the incident. Less than one week later, Hiland Dairy conducted an investigation and terminated Edwards’s and Smith’s employment, citing “theft of time” and dishonest conduct as reasons for termination.

The district court granted Hiland Dairy’s motion for summary judgment. On appeal, Smith and Edwards contend the circumstances of their terminations created an inference of discrimination because they were disciplined more severely than similarly situated white employees for similar offenses. Smith and Edwards also contend that Hiland Dairy’s investigation of their offenses was inconsistent with its policies and their collective-bargaining agreement. Smith and Edwards also suggest their supervisor articulated shifting expiations for why they were fired. Edwards contend their supervisor testified “time theft” was part of the reason for Edwards’ termination and later stated Edwards was terminated because he had Smith clock out for him. The Court of Appeals explained that Defendant’s reasons for termination “neither conflict nor are substantially different because the reasons and explanations for termination are not actually different at all”. The Court of Appeals affirmed the district court’s grants of summary judgmental reasoning that “a shortcoming in an internal investigation alone, without additional evidence of pretext, would not suffice to support an inference of discrimination on the part of the employer” and a change in an employer’s legitimate, nondiscriminatory reason for firing an employee is probative of pretext only if the discrepancy is ‘substantial.”

Submitted by:
Krysta Mitchell

DC Circuit

Niskey v. Kelly, 859 F.3d 1 (D.C. Cir. 2017).

In Niskey v. Kelly, the D.C. Circuit found that the suspension of a federal employee’s security clearance was an adverse employment action notwithstanding the fact that the employee did not lose any wages as a result of the suspension. However, the court also affirmed the dismissal of the employee’s complaint on the grounds that the employee had not exhausted his claims due to his unexplained delays in taking steps in the administrative process.

The employee worked for the Department of Defense in a position involving classified material. After complaining about differential treatment by supervisors in granting leave, the employee alleged that he came under increased scrutiny. Later, the employee’s access to classified material was suspended and the employee was also suspended from his job with pay. After a four (4) year delay, the employee’s security clearance was permanently revoked and the employee was terminated from his position. While the employee protested his clearance revocation, he did so only on procedural grounds and did not assert that the revocation was the product of discrimination or retaliation. His only administrative discrimination charge came in response to the earlier, suspension of his security clearance.

The court first found, in conflict with the district court’s reasoning, that the employee did timely initiate the agency EEO process by contacting his agency’s EEO counselor within 45 days of the suspension of his security clearance. Although the district court reasoned that a suspension with pay was not an adverse employment action, the D.C. Circuit held that the total loss of the employee’s ability to perform his job functions was objectively tangible harm that is actionable under Title VII.

However, subsequent delays between the employee’s initial complaint in 2002 and his filing suit in 2013 ultimately doomed the employee’s case. The court initially granted the employee four (4) years of equitable tolling (until 2006) because his agency’s EEO counselor advised him to wait until his clearance was formally revoked to pursue the administrative process and failed to advise him of the actual deadlines. While the employee could justifiably rely on this advice, however, he failed to ultimately follow it as he did not file any formal discrimination charge after the permanent revocation. While he appealed the revocation, he did so only on procedural, not Title VII, grounds. Beyond that, numerous other multi-month delays by the employee ultimately led the court to conclude that the employee had not diligently pursued his claims as required for the application of equitable tolling.

Arc Bridges, Inc. v. National Labor Relations Board, ___ F.3d ___, 2017 WL 2818637 (D.C. Cir. Jun. 30, 2017).

In Arc Bridges, Inc. v. National Labor Relations Board, an employer successfully challenged the NLRB’s finding that it engaged in an unfair labor practice by extending a three percent (3%) raise to only its non-union employees during the pendency of collective bargaining negotiations with the union.

The case involved a variety of events in 2007 leading up to collective bargaining negotiations later that year. In June 2007, the employer’s board of directors authorized management to give a three percent raise, but before the raise was announced the union demanded a 50% wage increase over three years as well as other benefits. In August, the union’s members voted to authorize a strike. After the union rejected the employer’s offer of a one-time bonus to represented employees, the employer in October 2007 gave its nonunion employees a three percent wage increase. Later in bargaining negotiations, the employer offered the union a smaller wage increase for represented employees.

The D.C. Circuit rejected the NLRB’s ruling that the employer’s extension of the three percent increase to nonunion employees only constituted an unfair labor practice. The court noted that for the employer’s actions to be an unfair labor practice, the NLRB must have found that the employer was motivated by antiunion animus and an intention to prejudice its employees because of their union membership. The court found that conclusion to be unsupported by substantial evidence.

Assessing the evidence claimed by the NLRB to support its position, the court first reviewed a series of statements by supervisors about the wage increase, including that the employer “was going to give us a raise until we voted the Union in” and that a $56,000 sum budgeted by the employer would instead be spend on labor lawyers. The court found that both these statements were simply realistic descriptions of the employer’s bargaining obligations and financial statement, and therefore not evidence of animus. The court also considered the NLRB’s finding that the employer’s stated business justifications for the wage increase were pretextual. First, the employer’s representative testified that unilaterally giving union employees a raise far smaller than that demanded by the union would have risked precipitating a strike. Second, the employer testified that the purpose of the raise was to stem a high turnover rate among the unrepresented employees. The court found that the employer’s stated justifications were, respectively “a facially reasonable bargaining strategy and a rational business decision,” and the NLRB had failed to adequately explain why those justifications supported a finding of animus.

King Soopers, Inc. v. National Labor Relations Board, 859 F.3d 23 (D.C. Cir. 2017).

In King Soopers, Inc. v. National Labor Relations Board, the D.C. Circuit upheld the NLRB’s finding that an employer’s suspension of an employee who asserted rights under a collective bargaining agreement was an unfair labor practice. Separately, the D.C. Circuit also approved a new relief standard implemented by the NLRB.

The employee worked in a grocery store whose workforce was covered by two separate collective bargaining agreements. Each agreement defined the duties that employees in the applicable bargaining unit would perform, restricted bargaining unit work to members of the unit, but also allowed the employer to assign employees “incidental” work outside their classification. Prior to her termination, a supervisor instructed the employee to help bag groceries, which was work outside of the employee’s bargaining unit classification. The employee objected based on her understanding of the applicable collective bargaining agreement. This led to a heated discussion with the supervisor that concluded with the employee being suspended five (5) days for insubordination. On the fifth day, the employee met with the supervisor, a union representative, and two other managers, and this meeting also became heated. The employee was placed on a second five (5) day suspension and subsequently her employment was terminated. The employee then filed a grievance, which the employer denied. The union, without explanation, elected to not pursue arbitration of the employee’s grievance.

The D.C. Circuit first held that the NLRB correctly determined that it was not obligated to defer to the employer’s and union’s dispute resolution procedure. The court found that this decision was proper because the employee had attempted to exhaust the available procedures but was unsuccessful due to the union’s actions. There were accordingly no outstanding contractual procedures to which the NLRB could have deferred. Nor was there any arbitral decision or settlement agreement that was the product of the parties’ alternative dispute resolutions. While the court noted that its decision might have been different had the union assessed the merits of the employee’s grievance and reached a reasonable judgment, on the facts of this case the NLRB could pursue the employee’s unfair labor charge complaint.

The court then upheld the NLRB’s determination that the employee was disciplined as a result of her engaging in concerted activities. Under NLRB precedent, an employee who honestly and reasonably (even if incorrectly) asserts a right grounded in a collective bargaining agreement engages in protected activity. The court upheld the NLRB’s finding that the employee here acted honestly and reasonably. The court also affirmed the NLRB’s finding that the employee’s insubordination was not such an unreasonable outburst as would not cause her conduct to lose its protection.

Finally, the court affirmed the NLRB’s decision to change the manner in which it calculates make-whole relief awarded to an unlawfully-discharged employee. Previously, the NLRB’s practice had been to award an employee her reasonable expenses incurred in seeking replacement employment, but capped the maximum recovery for such expenses at the amount of the employee’s interim wages. The court credited the NLRB’s explanation that eliminating the interim earnings cap was necessary in order to make unlawfully terminated employees whole and encourage employees to diligently seek replacement employment to mitigate their damages.

Montes v. Janitorial Partners, Inc., 859 F.3d 1079 (D.C. Cir. 2017).

In Montes v. Janitorial Partners, Inc., the D.C. Circuit explored the FLSA’s opt-in requirement for collective actions. The court found that it was not a jurisdictional requirement and therefore the failure of two collective action members to file written consents to the collective action did not provide a ground for vacating judgments obtained by those members.

The case arose when an employee filed an FLSA complaint against his employer asserting that the employer failed to pay the minimum wage or overtime. The employee styled his complaint as an FLSA collective action and alleged the existence of two similarly-situated employees. However, the plaintiff-employee did not file executed collective action consents from the other employees. Under the FLSA, an employee is not a party plaintiff to a collective action unless he or she consents in writing and the consent is filed in the action. Nonetheless, the three employees obtained a default judgment against their employer notwithstanding the lack of written consents.

The employer later moved to vacate the default judgment in favor of the two employees. The district court denied the motion and the D.C. Circuit affirmed that denial. In order for the judgment to be vacated, it had to be “void,” meaning the district court lacked subject matter jurisdiction to enter it. The D.C. Circuit found that the procedural defect of the absent consents was not jurisdictional because the FLSA’s text contained no language stating that it is jurisdictional. Accordingly, the lack of written consents did not provide a ground to vacate the employees’ default judgment.

Submitted by:
Jack Blum