Fourth Circuit

Westmoreland v. TWC Administration LLC, 924 F.3d 718 (4th Cir. May 22, 2019)

After a company discharged a long-time employee, the employee sued her former employer for violation of the Age Discrimination in Employment Act, 29 U.S.C. § 623.  Across three decades, the employee consistently performed well.  After a corporate transition, the employee conducted a required one-on-one meeting with a younger subordinate.  Six days later, the employee and subordinate completed a form documenting their meeting; at the employee’s request, the subordinate wrote the date of the meeting on the form, rather than the date she signed the form.  The subordinate reported to the employee’s direct supervisor that the employee had asked the subordinate to alter the date.  When the supervisor inquired about the date issue, the employee explained that the form reflected the date of the meeting, and the supervisor told her “not to worry about it.”  Several weeks later, the company fired the employee, citing company policy that false statements may result in termination of employment. 

All company officials involved in the termination testified that the sole justification for the decision was the employee’s role in backdating the form.  After the termination, one of the employee’s supervisors said, “You’ll get another job.  Just go home and take care of those grandbabies.”  The company promoted a 37-year-old subordinate to replace the employee, who was over age 60.  At trial, the district court entered judgment as a matter of law in favor of the employer on the employee’s race discrimination claims and declared a mistrial on the age discrimination claims after the jury hung.  At a second trial on the age discrimination claims, the jury found for the employee, and awarded her more than $300,000.  The district court denied the employer’s motions for judgment as a matter of law.  On appeal, the Fourth Circuit affirmed.

To prevail on an ADEA claim, a plaintiff must show that age was the but-for cause of the challenged employment action.  Using the McDonnell Douglas framework, to make out a prima facie case, the plaintiff must show that (1) at the time of firing, she was at least 40 years old; (2) she was qualified for the job and performing according to the employer’s legitimate expectations; (3) she was discharged; and (4) a substantially younger individual with comparable qualifications replaced her.  The employer then has the burden to produce evidence that it acted for a legitimate, nondiscriminatory reason.  The employee must then prove that the legitimate reason offered is a pretext for discrimination.

On the employer’s appeal, the parties did not dispute that the employee presented sufficient evidence to establish a prima facie case of age discrimination, or that the employer presented sufficient evidence of a legitimate, nondiscriminatory reason for termination—backdating the form.  The employer argued that the employee failed to present sufficient evidence of pretext to support the jury’s verdict.  The Fourth Circuit disagreed, citing evidence of the employee’s satisfactory performance, the age difference between the employee and her replacement, the supervisor’s remark about “grandbabies,” another supervisor’s assurance that the employee had nothing to worry about with the backdating incident, and the fact that lesser sanctions than termination were available.  The Fourth Circuit concluded that this evidence, taken together, was sufficient for a reasonable jury to determine that the company’s justification was a pretext for age discrimination.  The Fourth Circuit criticized the employer’s reliance on cases applying a pretext-plus standard, noting that the Supreme Court had since rejected that standard.  The Court found it sufficient that the employee presented evidence that the proffered reason for termination was implausible, and other evidence permitting an inference of discrimination.

The Fourth Circuit also considered and rejected the employer’s challenge to a summary charge, given at the end of the jury instructions, where the district court referred to a “legitimate business reason,” instead of a legitimate, nondiscriminatory reason for discharge.  The Court concluded that the district court properly exercised its discretion in giving the charge.

Finally, the Fourth Circuit rejected the employer’s argument that the district court’s questions during trial were prejudicial.  The district court asked each witness between two and ten questions, and the questions were necessary to develop material facts.  The Fourth Circuit found no error in the questions and affirmed the jury’s verdict.

In dissent, Judge Niemeyer expressed his view that there was “absolutely no evidence” that the employee was fired because of her age and contended that the jury’s verdict should be reversed.


Muhammad v. Norfolk Southern Railway Co.,
925 F.3d 192 (4th Cir. June 4, 2019)

A railroad employee was injured while replacing railroad crossties on a bridge over the Elizabeth River, which has been declared navigable by the U.S. Coast Guard.  The employee sued his employer under the Federal Employers’ Liability Act (FELA), 45 U.S.C. § 51, alleging that his employer’s negligence caused his injuries.  The district court ruled that the injury occurred “upon navigable waters” and the employee was engaged in “maritime employment,” and therefore concluded that the Longshore and Harbor Workers’ Compensation Act (LHWCA) provided the exclusive remedy for the employee’s claim.  As a result, the district court dismissed the FELA action for lack of subject matter jurisdiction.  The employee appealed, and the Fourth Circuit reversed.

The LHWCA provides the exclusive remedy for on-the-job injuries to workers who are both engaged in “maritime employment” (the status requirement) and are injured “upon the navigable waters of the United States” (the situs requirement).  Maritime employment includes “any longshoreman or other person engaged in longshoring operations, and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker.”  Navigable waters include “any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel.”  An LHWCA claim must be filed with the Department of Labor, where it is adjudicated by an administrative law judge.

Before considering whether the LHWCA applied, the Fourth Circuit explained that the district court erred by dismissing the case for lack of subject matter jurisdiction, because the court plainly had jurisdiction under FELA.  If the LHWCA applied, its preemptive effect would be an affirmative defense to the employee’s FELA claim, but that defense would not deprive the court of subject matter jurisdiction.  For purposes of analyzing the appeal, the Fourth Circuit construed the district court’s dismissal order to have concluded that the FELA claim was preempted by the LHWCA.

The Fourth Circuit concluded that the LHWCA did not preempt the employee’s FELA claim, because the injury did not occur “upon navigable waters.”  The Fourth Circuit ruled that the definition of “upon navigable waters” did not include a land-accessed bridge over navigable waters, like the bridge where the employee was injured.  Because the situs requirement was not satisfied, the Fourth Circuit did not need to reach the status requirement to determine that the LHWCA did not apply.  The Fourth Circuit reversed the dismissal of the FELA claim and remanded for further proceedings.


Pense v. Maryland Dep’t of Public Safety & Correctional Services
, 926 F.3d 97 (4th Cir. June 11, 2019)

A former prison employee sued the Maryland Department of Public Safety and Correctional Services, alleging that he was terminated on the basis of sexual orientation discrimination and disability discrimination after he disclosed that he was gay and HIV positive.  The employee brought federal and state claims, including claims for violation of the Maryland Fair Employment Practices Act (FEPA).  The Department moved to dismiss the FEPA claims on Eleventh Amendment immunity grounds, and the district court denied the motion.  On the Department’s appeal, the Fourth Circuit reversed.

The Eleventh Amendment protects states, state agents, and state instrumentalities from suit in federal court, unless the state has waived Eleventh Amendment immunity.  A state may waive immunity by statute, but only if the statute specifies the state’s intention to subject itself to suit in federal court.  The Supreme Court applies a stringent test for waiver, requiring a clear declaration that the state intends to submit itself to federal court jurisdiction. 

The Department argued on appeal that Maryland had not waived Eleventh Amendment immunity for FEPA claims, and the Fourth Circuit agreed.  FEPA contains a consent to suit provision, which provides that the state, its officers, and its units may not raise sovereign immunity as a defense in an employment discrimination case.  A separate venue provision states that a FEPA action shall be filed in the circuit court for the county where the alleged unlawful employment practice occurred.  The Fourth Circuit ruled that these statutes did not provide a clear declaration that Maryland intended to submit itself to federal court jurisdiction.  The Fourth Circuit rejected prior district court cases holding that Maryland had waived immunity for FEPA claims.  In those cases, the district court ruled that because some Maryland consent to suit statutes contain an express limitation to state court, and the FEPA provision does not contain such a limitation, Maryland intended to waive Eleventh Amendment immunity for FEPA claims. 

The Fourth Circuit found those cases inconsistent with Supreme Court precedent requiring a clear declaration that a state intends to submit itself to federal court jurisdiction.  The Court also distinguished its prior ruling in a case involving a similarly worded consent to suit provision, explaining that it deferred to a decision of the Court of Appeals of Maryland, the highest state court, specifically concluding that the statute at issue subjected the state to federal jurisdiction.  There was no Maryland high court case holding that the FEPA consent to suit provision subjected the state to federal jurisdiction.  Because there was no clear declaration that Maryland intended to submit itself to federal jurisdiction in FEPA cases, the Court concluded that Maryland had not waived Eleventh Amendment immunity.  Therefore, the Fourth Circuit reversed the district court’s order and remanded with instructions to dismiss the employee’s FEPA claims.


Northrop Grumman v. United States Department of Labor, __ F.3d __, 2019 WL 2455321 (4th Cir. June 13, 2019)

In 2007, the employee filed a defamation case in Virginia state court, alleging that her supervisor made false statements in her performance review.  The company successfully moved to compel arbitration pursuant to its arbitration policy.  Over the next three years, until the Supreme Court denied her certiorari petition, the employee challenged the order compelling arbitration on the ground that she did not agree to the arbitration policy.  During that time, the employee refused to sign a company conflict of interest form, contending that the form was the company’s way of binding her to the arbitration policy. 

In 2011, the employee complained to company executives, saying that the company used the conflict of interest form to trick employees into agreeing to the arbitration policy.  In one email, the employee claimed that she was exempted from the arbitration policy by senior company executives, and this alleged exemption rendered the company’s SEC filings inaccurate.  The employee was suspended for refusing to complete the conflict of interest form, but later reinstated when she completed it.  Several months later, the company notified the employee that her employment was being terminated as part of a reduction in force.  The employee filed an administrative complaint with the Occupational Health and Safety Administration (OSHA), alleging that the termination of her employment violated the whistleblower protection provision of the Sarbanes-Oxley Act (SOX).  After OSHA dismissed the complaint, the employee appealed to a Department of Labor administrative law judge, who found that the company violated SOX.  The Department of Labor Administrative Review Board (ARB) affirmed.  The company filed a petition for review with the Fourth Circuit, which vacated and remanded for dismissal of the employee’s administrative complaint.

The whistleblower protection provision of SOX prohibits public companies from firing an employee for providing information to a supervisor relating to one of six categories:  (1) mail fraud, (2) wire fraud, (3) bank fraud, (4) securities fraud, (5) a violation of any SEC rule or regulation, or (6) fraud against shareholders.  An employee asserting a whistleblower claim must establish that (1) the employee engaged in protected activity; (2) the employer knew or suspected that the employee engaged in protected activity; (3) the employee suffered an adverse action; and (4) the circumstances raise the inference that the protected activity was a contributing factor in the adverse action.  To show that she engaged in protected activity, the employee must show that she had a subjectively and objectively reasonable belief that the conduct she complained of violated one of the categories of the whistleblower provision.

The Fourth Circuit concluded that the ARB erred by ruling that the employee engaged in protected activity.  The DOL argued that the employee engaged in protected activity by objecting to the arbitration policy because she believed it violated 18 U.S.C. § 1514A(e), a provision of the SOX whistleblower statute prohibiting pre-suit arbitration of SOX claims.  According to the DOL, this activity was protected because the anti-arbitration provision was a provision of federal law relating to fraud against shareholders, the sixth enumerated category of the whistleblower statute.  The Fourth Circuit disagreed, reasoning that the employee’s complaints about the arbitration policy did not involve a concern about shareholder fraud, and therefore did not constitute protected activity.

The Fourth Circuit also concluded that there was not substantial evidence supporting the conclusion that the employee had an objectively reasonable belief that the arbitration policy violated § 1514A(e), and that the violation constituted shareholder fraud.  The Court explained that a reasonable person in the employee’s position could not have believed that the company’s conduct violated § 1514A(e) for at least two reasons.  First, no reasonable person could believe that the arbitration policy was incorporated into the conflict of interest form, which did not mention the arbitration policy.  Second, even if the form incorporated the arbitration policy, no reasonable person could believe that the arbitration policy violated § 1514A(e) by requiring arbitration of SOX claims, because the policy expressly stated that it did not apply to claims as to which an arbitration agreement was prohibited by law.  Finally, the Fourth Circuit concluded that no reasonable person could have believed that the company’s alleged violation of § 1514A(e) constituted shareholder fraud, because the alleged violation did not involve misrepresentations or omissions to investors.

Because it concluded that the employee did not engage in protected activity, the Fourth Circuit granted the company’s petition, vacated the ARB decision, and remanded for dismissal of the administrative complaint.

Submitted by:

Paul Sun’s practice focuses primarily on business litigation and appeals.  Mr. Sun has experience in the areas of trade secrets and unfair competition, business and health care fraud (civil and criminal), employment, consumer claims, antitrust, premises and product liability, and contract disputes.  He has tried cases in areas as varied as health care fraud, product liability/wrongful death, and First Amendment.  Mr. Sun also regularly handles civil and criminal appeals in the North Carolina and federal appellate courts.  He is a Fellow in the American College of Trial Lawyers, and a member of the American Law Institute.
 

Kelly Margolis Dagger is a trial and appellate lawyer focusing on business litigation, employment litigation, higher education, and criminal defense.  She has tried a variety of cases in North Carolina state and federal courts.  Her civil practice includes higher education litigation, contract disputes, antitrust and unfair competition claims, trade secrets, restrictive covenants, and other departing employee litigation, as well as wrongful termination and related employment law claims.  Ms. Dagger also represents clients on appeal to the United States Court of Appeals for the Fourth Circuit, the North Carolina Court of Appeals, and the North Carolina Supreme Court.  She is the current President of the Eastern District of North Carolina Chapter of the Federal Bar Association.

Paul K. Sun, Jr.
Kelly Margolis Dagger
ELLIS & WINTERS LLP
paul.sun@elliswinters.com
kelly.dagger@elliswinters.com
POST OFFICE BOX 33550
RALEIGH, NORTH CAROLINA 27636
TELEPHONE: 919.865.7014
http://www.elliswinters.com/


Fifth Circuit

English v. Perdue, ___ F. App’x ___, 2019 WL 2537414 (5th Cir. June 19, 2019)

United States Department of Agriculture (“USDA”) employee Todd English brought claims for discrimination based on age and sex, hostile work environment and retaliation against the Secretary of the USDA.  English alleged that female employees under 40 were given preferential treatment, groomed for promotion, and given assignments and opportunities that he believed he should have received.  He asserted that he experienced a hostile work environment where he was ridiculed, and berated publicly, subjected to unwarranted scrutiny, and where his leave request was dealt with unfairly and capriciously.  He alleged that he experienced retaliation after filing a Charge of Discrimination. 

The Magistrate Judge recommended denial of the Motion to Dismiss and granted leave to file a Second Amended Complaint.  Contrary to that recommendation, the District Judge granted dismissal.  It found that English’s Complaint failed to plead the requisite causal links because he did not plausibly allege that he experienced discrimination or hostility due to his sex or his age, nor did he plausibly allege that the identified retaliatory acts were due to the protected activity of filing a Charge of Discrimination.  Reviewing the district court’s decision de novo, the Fifth Circuit affirmed the dismissal. 

Acknowledging that a plaintiff need not make out a prima facie case at the pleading state, the Court reiterated that a plaintiff must set forth allegations that plausibly address the ultimate question, i.e., whether the employer took adverse action because of the plaintiff’s protected status.  The conduct identified as preferential treatment (e.g., coworkers being able to socialize with higher-ups) is not cognizable as adverse employment action.  Simply alleging that “another employee was treated better and given more opportunities does not become actionable under federal law just because she was female or because she was younger.”  More is needed to bring a claim above the speculative level. 

The Fifth Circuit agreed that English did not adequately plead that his hostile work environment was based on his sex or age because none of his allegations made it more than merely speculative that his sex or age caused the alleged hostile treatment.  He failed to plead any hostile age-based remarks and identified a variety of inconsiderate conduct in only a conclusory fashion.  Likewise, he failed to state a retaliation claim because he did not show a causal link between the protected activity and adverse action.  Simply alleging that the adverse actions occurred “subsequent to” the protected activity is insufficient.  Having failed to allege the detailed facts necessary to establish a retaliation claim, the Court avoided the need to determine whether the Fifth Circuit recognizes a claim for retaliatory hostile environment.

Submitted by:

Donna Phillips Currault
Gordon, Arata, Montgomery, Barnett,
   McCollam, Duplantis & Eagan, LLC
201 St. Charles Ave.  40th Floor
New Orleans, Louisiana 70170-4000
Direct: (504) 569-1862
Email:  dcurrault@gamb.law


Sixth Circuit

Mager v. Wisconsin Cent. Ltd., 924 F.3d 831 (6th Cir. May 15, 2019)

Plaintiff was injured when he slipped on a hydraulic oil leak at a railway yard.  He later brought an action against his employer, Defendant Wisconsin Central Ltd. (“WCL”), seeking to recover damages under the Federal Employer’s Liability Act (FELA).

After Plaintiff was deposed, Defendant scheduled an IME. Plaintiff’s counsel initially objected because of the distance between the IME location (Wisconsin) from Plaintiff’s residence (Michigan).  After Defendant moved to compel, however, the parties agreed that Mager would appear for the IME and that Defendant would pay for his travel.  Before the IME, Defendant gave Plaintiff a questionnaire, which Plaintiff’s counsel objected to on the basis that the questions had already been answered at deposition.  The magistrate judge ordered Plaintiff to appear for an interview with a doctor’s assistant prior to the IME to collect the necessary information reflected in the questionnaire.  Plaintiff and his counsel appeared for the IME, but Plaintiff continuously refused to answer questions throughout the interview and exam.  Plaintiff’s counsel also made an audio recording of the IME without disclosing to the examiner he was doing so.  Defendant moved to dismiss because Plaintiff had violated the magistrate judge’s order.  The district court dismissed Plaintiff’s action with prejudice for violating a Rule 35 order.

The Sixth Circuit examined four factors to determine if the sanction of dismissal with prejudice was an appropriate sanction for failure to comply with the lower court’s order:

(1) whether the party’s failure is due to willfulness, bad faith, or fault; (2) whether the adversary was prejudiced by the dismissed party’s conduct; (3) whether the dismissed party was warned that failure to cooperate could lead to dismissal; and (4) whether less drastic sanctions were imposed or considered before dismissal was ordered.

In this case, the Sixth Circuit found that the sanction of dismissal was appropriate because Plaintiff deliberately failed to comply with the magistrate judge’s orders and prejudiced Defendant, prior warning of dismissal would not have changed Plaintiff’s behavior, and because the magistrate judge considered lesser sanctions.  On that basis, the Sixth Circuit affirmed.


Sec’y of Labor v. Timberline S., LLC
, 925 F.3d 838 (6th Cir. May 29, 2019)

The Secretary of Labor (the Secretary) brought this action against Defendants alleging violations of the overtime and recordkeeping provisions of the Fair Labor Standards Act (“FLSA”).  Defendants together were Timberline South, LLC (“Timberline”), a timber-harvesting company that operates solely in Michigan but used logging and harvesting equipment and trucks that were manufactured outside of Michigan, and its director, Jim Payne.  The Eastern District of Michigan granted summary judgment in the Secretary’s favor and awarded damages.  Defendants appealed, arguing that the district court erred in finding liability and awarding unpaid overtime and liquidated damages.

Before the Sixth Circuit, Defendants first argued that Timberline was not an “enterprise” and that the logging and harvesting equipment it used were not “materials” under the FLSA.  The Court found that plain language of the FLSA contradicted that position, however, as it provides coverage where employees handle, sell, or otherwise work on “goods or materials that have been moved in or produced for commerce by any person.”  The court also found that “the logging and harvesting equipment used by Timberline’s employees plainly constituted ‘materials’ because the equipment is necessary to cut down trees and transport the timber.”

Defendants next challenged the district court’s determination that Timberline’s truck drivers are not exempt from the FLSA’s overtime provisions pursuant to 29 U.S.C. § 213(b)(1), which exempts from coverage “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49.”  It was undisputed that Timberline’s driver did not cross state lines, however, and were therefore not exempt employees.

Notwithstanding these findings, the Sixth Circuit reversed the district court’s award of damages because the district court determined that the ordinary commute time and meal time qualified as compensable hours under the FLSA.  Ultimately, the Sixth Circuit held that “any ordinary commute and bona fide meal time must not be included in determining how many hours of overtime each employee worked.”  On that basis, the Sixth Circuit reversed and remanded the damage calculations for further review.


Jane Doe v. Déjà Vu Consulting, Inc.,
925 F.3d 886 (6th Cir. June 3, 2019)

In Doe v. Déjà Vu Consulting, Inc., a panel of the Sixth Circuit affirmed approval of a settlement in a Fair Labor Standards Act (“FLSA”) class action brought by 28,177 exotic dancers.  After a district court approved a settlement in a similar case in 2011, another dancer filed a complaint against Déjà Vu Consulting in 2016, alleging FLSA and state wage-and-hour law violations, including misclassifying class members as independent contractors; failing to pay minimum wage; forcing employees to share gratuities; and other violations.  The district court approved a settlement that provided the plaintiffs injunctive and monetary relief, but four class members objected.

Focusing primarily on the value of the class members’ claims, the Sixth Circuit affirmed acceptance of the settlement agreement.  The Sixth Circuit emphasized the high risk of arbitration, as confirmed by the Supreme Court’s decision in Epic Systems v. Lewis, 138 S. Ct. 1612 (2018), to support the conclusion that many class members would receive little or no relief absent settlement.       


Holt v. City of Battle Creek
, 925 F.3d 905 (6th Cir. June 3, 2019)

In Holt v. City of Battle Creek, two battalion chiefs for a city fire department alleged the city violated the FLSA when it refused to pay them overtime wages for time spent on “standby” duty.  While on standby, battalion chiefs were required to monitor a pager and radio, answer phone calls if needed, and help with problems that might arrive after hours.  The chiefs received 1.5 hours of pay for every day on standby and were paid overtime if they actually were called in to work while on standby. 

After a bench trial, the district court held that the battalion chiefs were exempt from the FLSA overtime requirement under both the executive and administrative exemptions.  The Sixth Circuit upheld the trial court’s decision, emphasizing the evidence that the plaintiffs’ primary duties were managerial.  The evidence in favor of this decision included that the battalion chiefs were responsible for “tak[ing] charge” in the event they were called to a fire, were “in charge” of certain fire personnel, and had even referred to themselves as “management” in an earlier letter to the fire chief.  The battalion chiefs’ significant authority over discipline in the fire department further supported the finding that the executive exemption to the FLSA’s overtime requirements applied.  The Court of Appeals did not separately address whether the plaintiffs were subject to the FLSA’s administrative exemption or whether standby time was so onerous as to be compensable under the FLSA.


Hickle v. Am. Multi-Cinema, Inc
., __ F.3d __, 2019 WL 2529251 (6th Cir. June 20, 2019)

In Hickle v. American Multi-Cinema, Inc., the Sixth Circuit found material fact disputes in a case alleging that a movie theater discharged its employee because of the employee’s military service in violation of the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). 

The plaintiff, Jared Hickle, worked as a kitchen manager at the defendant movie theater, AMC, and was also a member of the Ohio Army National Guard.  AMC never interfered with Hickle’s military obligations and never denied him time off.  Nevertheless, Hickle submitted evidence that a senior manager at AMC made multiple negative comments about Hickle’s obligations, including that his “requesting time off was always frustrating to her,” made scheduling difficult, and his inability to work on a particular weekend meant he “no longer met the . . . minimum qualifications for being employed at AMC.”  When Hickle told the manager that he could not be terminated for fulfilling his military duties, the manager said, “[w]e will find something else to terminate you on.”  This manager, however, lacked the power to discharge Hickle.  Instead, AMC fired Hickle after a corporate compliance officer investigated a particular workplace incident and found that Hickle had engaged in unprofessional behavior and impeded the investigation.

The district court granted summary judgment in favor of AMC, in part because it saw no evidence that the ultimate decisionmaker shared or was even aware of the manager’s anti-military animus.  The Sixth Circuit reversed.  The appeals court found evidence that the ultimate decisionmaker chose to fire Hickle based in part on input from a manager who had exhibited such animus.  There was also evidence that the manager who harbored animus induced Hickle to impede the compliance officer’s investigation, which, in turn, led to Hickle’s discharge.  The court concluded that such evidence created a triable question on whether Hickle’s military obligations were a proximate cause for his discharge.

Submitted by:

Jessica B.K. Pask
Miller, Canfield, Paddock & Stone, P.L.C.
150 W. Jefferson, Suite 2500
Detroit, Michigan, 48226
pask@millercanfield.com

An associate at Miller Canfield, Jessica assists with litigation and arbitration and represents various clients in labor relations and employment issues.

Kamil Robakiewicz
Miller, Canfield, Paddock & Stone, P.L.C.
One Michigan Ave., Suite 900
Lansing, Michigan 48933
robakiewicz@millercanfield.com
http://www.millercanfield.com/KamilRobakiewicz

Kamil Robakiewicz specializes in litigation and alternative dispute resolution, with a particular emphasis on sophisticated employment disputes.

Seventh Circuit

Equal Employment Opportunity Comm’n v. Costco Wholesale Corp., 903 F.3d 618 (7th Cir. 2018)

The EEOC filed suit on behalf of a female employee, alleging that her employer Costco subjected her to a hostile work environment in violation of Title VII by tolerating a customer’s harassment.  Over a period of thirteen months, a Costco customer often sought out, followed, and physically touched and made comments to the employee while she completed her job duties.  After the first few interactions, the employee reported the customer’s actions to her supervisor and eventually filed a police report and secured a Stalking No Contact Order against the customer.  The employee went on a medical leave of absence and later was terminated because her unpaid medical leave of absence extended beyond twelve months.  The jury rendered a verdict in the EEOC’s favor and the district court denied Costco’s motion for judgment as a matter of law because a reasonable jury could conclude that the customer’s conduct was severe or pervasive enough to render the employee’s work environment hostile.

On appeal, the Seventh Circuit affirmed the jury and district court.  Costco argued that the customer’s interactions with the employee were not as lewd as actions the court had previously found did not meet the severe or pervasive standard.  The court explained that harassment is not always limited to comments and physical contact, and in this case, the customer’s persistent presence at the employee’s workplace, his appearing in disguise, and his monitoring of her actions and conversations, among other actions, were sufficient.  Thus, the court could not find that the jury unreasonably found the customer’s actions severe or pervasive.  This case serves as a reminder that employers can be held liable for actions of third parties, including nonemployees and customers, in addition to those of a supervisor or coworker.


Kleber v. CareFusion Corp
., 888 F.3d 868 (7th Cir. 2018), reh’g en banc granted, opinion vacated (June 22, 2018), on reh’g en banc, 914 F.3d 480 (7th Cir. 2019)

In Kleber, the company CareFusion had posted an advertisement for a senior counsel position in its corporate legal department, seeking candidates with “3 to 7 years (no more than 7 years) of relevant legal experience.”  The plaintiff was 58 years old at the time he applied for the position and had more than seven years of pertinent experience.  CareFusion denied Kleber’s application, and Kleber brought action against the prospective employer pursuant to the Age Discrimination in Employment Act (ADEA).  The district court dismissed Kleber’s complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), holding that the ADEA’s disparate impact provision does not extend to job applications.  On appeal at the Seventh Circuit in 2018, a three-judge panel reversed the district court; the divided panel held that the ADEA’s disparate impact provision does protect outside job applications and the practice of excluding job applicants who exceed a maximum level of experience could be unlawful.

Sitting en banc, however, the Seventh Circuit affirmed the district court in an 8-4 decision, holding that the ADEA does not permit a disparate impact theory of liability brought by a job applicant.  The Seventh Circuit explained that the plain language of the ADEA disparate impact provision extends protections only to “employees,” which does not encompass “job applicants.”  In reaching this conclusion, the court also examined the language of other provisions in the ADEA and the disparate impact provision of Title VII, which both enumerate “employees” and “job applicants” as protected categories.  Kleber’s petition for certiorari is pending with the United States Supreme Court.

The Seventh Circuit joins the Eleventh Circuit, which also held that only current or former employees can pursue disparate impact claims in Villareal v. R.J. Reynolds Tobacco Co., 839 F.3d 958 (11th Cir. 2016) (en banc).  The Seventh and Eleventh Circuits are the only federal appellate courts to have weighed in on the issue.


Levitin v. Northwest Community Hospital
, 923 F.3d 499 (7th Cir. May 8, 2019)

Dr. Yelena Levitin owned and operated her own private practice, while also performing surgeries at Northwest Community Hospital.  When the hospital terminated her practice privileges, Levitin brought a Title VII suit alleging that the hospital discriminated against her based on her sex, religion and ethnicity.  The hospital responded that it did not employ Levitin, which precluded her claims.  The district court agreed and granted Northwest’s motion for summary judgment.  The only question on appeal was whether Levitin was a hospital employee for purposes of Title VII.  The Seventh Circuit affirmed, finding that Levitin was an independent physician with practice privileges at the hospital.

This ruling reaffirms the Seventh Circuit’s employer-employee relationship test.  As articulated in Knight v. United Farm Bureau Mutual Insurance Company, 950 F.2d 377 (7th Cir. 1991), the Seventh Circuit examines the “economic realities of the relationship” and the “decree of control” the employer exerts over the alleged employee.  Relevant factors include the extent of the employer’s control, the nature of the occupation and required skills, responsibility for the costs of operation, method and form of payment and the length of the job commitment.  The Seventh Circuit emphasized that the employer’s control is the key factor courts consider.


Richardson v. Chicago Transit Authority
, ___ F.3d ___, 17-3508 & 18-2199, 2019 WL 2442786 (7th Cir. June 12, 2019)

Richardson, a former Chicago Transit Authority (CTA) bus operator, alleged that CTA terminated his employment because of his extreme obesity in violation of the Americans with Disabilities Act of 1990 (ADA). In addition to his extreme obesity, Richardson suffers from hypertension and sleep apnea. When trying to return to work after being sick with the flu, CTA’s third-party medical provider determined that Richardson could not return to work until he controlled his blood pressure. Due primarily to his obesity, Richardson failed to meet a CTA assessment for bus operators and was unable to return to his prior role. Eventually, Richardson’s inability to work as a bus operator culminated with CTA terminating his employment. The district court held extreme obesity only qualifies as a disability under the ADA if it is caused by an underlying physiological disorder or condition; because Richardson did not present such evidence, the ADA did not cover Richardson and the court granted summary judgment to CTA.

The Seventh Circuit affirmed the district court, examining whether Richardson could demonstrate that his extreme obesity is an actual impairment or CTA perceived his extreme obesity to be an impairment. Rejecting Richardson’s interpretation of the EEOC interpretive guidance, the court reasoned that conditions that are not the result of a physiological disorder are not impairments. The court also found that Richardson did not demonstrate that CTA perceived his extreme obesity was caused by an underlying physiological disorder or condition. As such, CTA did not violate the ADA.

The Seventh Circuit joins the Second, Sixth, and Eighth Circuits, which have all held that obesity is only an ADA impairment if it is the result of an underlying physiological disorder or condition.  See Francis v. City of Meriden, 129 F.3d 281, 286–87 (2d Cir. 1997); EEOC v. Watkins Motor Lines, Inc., 463 F.3d 436, 441–43 (6th Cir. 2006); Morris v. BNSF Ry. Co., 817 F.3d 1104, 1108–13 (8th Cir. 2016).  No other circuits have addressed this question, although the Ninth Circuit recognized that it is an open question in that circuit.  See Taylor v. Burlington N. R.R. Holdings, Inc., 904 F.3d 846, 851–53 (9th Cir. 2018).

Submitted by:

Mikaela Shaw
Judicial Law Clerk
U.S. District Court, Northern District of Illinois


Eighth Circuit

Beckley v. St. Luke’s Episcopal-Presbyterian Hosp., 923 F.3d 1157 (8th Cir. May 16, 2019)
 
Karen Beckley worked as a surgical technician for St. Luke’s Episcopal-Presbyterian Hospital from 1995 until the hospital terminated her employment in 2015.  In 2012, St. Luke’s promoted Beckley from her position in the Labor & Delivery Department to a full-time position in the Operating Room Department.  The new position described that a surgical technician was expected to “[p]erform[] in the scrub role during surgical procedures, following all established Nursing Standards and Hospital Policies.”
 
At that time, Beckley had been on intermittent Family and Medical Leave Act (“FMLA”) leave and St. Luke’s was aware she would need to take additional intermittent FMLA leave.  Beckley did so from August 2012 through February 2013; from February 2013 through August 2013; and from April 2014 through April 2015.
 
St. Luke’s reprimanded Beckley three times in 2014 for failing to respond to call-in requests while she was on-call and counseled her on other several other issues with her work.  Those issues included discussions about the need for her to focus more and talk less during surgical procedures and mislabeling a syringe that contained medication rather than the saline needed for a flush.  Seven months after the third and final warning for missing a call-in request, St. Luke’s terminated Beckley on March 20, 2015.  The termination came 11 days after she broke sterility during a complicated surgical procedure.

Beckley later sued under the FMLA, 29 U.S.C. § 2601 et seq.  Beckley believed St. Luke’s treated her differently than other employees because of the FMLA usage.  She based this belief on incidents such as a co-worker telling her she “need to watch herself” regarding FMLA usage and a supervisor’s inquiry as to whether she could schedule doctor’s appointments during off-duty hours.

The 8th Circuit upheld the district court’s grant of summary judgment in favor of St. Luke’s. Beckley argued the summary judgment motion was improperly granted because that she had established an FMLA claim on two grounds: the temporal proximity of the exercise of her FMLA rights to the disciplinary actions and termination and St. Luke’s alleged more lenient treatment of other employees who did not exercise rights under the FMLA.  But the court held Beckley’s FMLA retaliation claim failed because she could not “establish her termination was motivated by the exercise of FMLA rights.”

With respect to the temporal proximity argument, the court noted that between October 2012, when Beckley started the Operating Room Department position, and her first warning for missing a call-in in March 2014, there were no negative consequences despite her use of FMLA leave.  Subsequent warnings related to the on-call policy put Bleckley on notice that additional occurrences could lead to termination.

The court also held Beckley’s alleged evidence of differential treatment was not actionable under the FMLA without evidence of tangible injury or harm.  That evidence—which included allegations of mistreatment by supervisors such as treating her differently,  scrutinizing her work more closely, and failing to address a co-worker’s comment about FMLA leave usage—involved the sort of “petty slights or minor annoyances” that, “although frustrating to an employee,” do not give rise to an FMLA claim.

Ultimately, the court held the evidence Beckley presented did not create a genuine dispute of material fact as to St. Luke’s legitimate, nondiscriminatory reasons for her termination.


Charleston v. McCarthy
, No. 18-1965, 2019 U.S. App. LEXIS 17740 (8th Cir. June 13, 2019)

Dan Charleston joined the Polk County, Iowa Sheriff’s Office in 1997 as a sergeant.  In 2008, the people of Polk County elected Bill McCarthy sheriff. McCarthy, a democrat, stood for re-election in 2012.  Charleston, a Republican, announced he would challenge McCarthy that year.

The election was contentious, including several issues that questioned Charleston’s performance as an officer of the law.  The Pomona, California Police Department had previously terminated Charleston for lying in an official police report.  The Polk County Sheriff’s Department had suspended Charleston for two days in 2012 for failing to render any aid to a bleeding man before paramedics arrive.  The decision for the 2012 suspension came from the Office of Professional Standards, though McCarthy ultimately affirmed the decision after appeals.  The man died, but the medical examiner later determined that the man would not have survived had aid been rendered.  During an October debate, McCarthy and Charleston sparred over the latter’s views, with Charleston alleging McCarthy refused to promote him due to his political beliefs.  McCarthy responded without mention of Charleston’s political views.

Sheriff McCarthy was re-elected and held a “clean the air” meeting with Charleston on December 6, 2012.  During that meeting, McCarthy expressed his suspicions of Charleston and Charleston questioned whether McCarthy intended to push Charleston out of law enforcement.  McCarthy responded that he intended to allow Charleston to remain in the department, stating Charleston had “a place here [in the department] if [he would] just accept the position [he had] and make the best out of that.”

Further, in 2013, a department investigation found Charleston had violated an Iowa Code provision governing collective bargaining.  Discipline could have ranged from counseling Charleston regarding the interference to termination.  McCarthy ultimately issued a reprimand that went into Charleston’s personnel file but did not affect his salary.  Later that year, McCarthy transferred Charleston from the Patrol Division to the Transport Division.  Charleston’s new position, while he supervised eight fewer employees, did not involve a pay cut and required him to work regular business hours.

In 2014, Charleston sued McCarthy and other county officials, alleging he suffered certain treatment as a result of his political beliefs and associations.  The district court dismissed the other defendants and several claims and subsequently granted summary judgment against Charleston on the remaining First Amendment discrimination and retaliation claims, which he appealed.  The Eighth Circuit affirmed the district court.

The court reviewed the elements of a prima facie case for both First Amendment retaliation and discrimination claims, both of which require an adverse employment action.  Charleston alleged the following constituted adverse employment actions: a 2012 suspension and McCarthy’s refusal to rescind it; the 2013 reprimand; the 2013 transfer; and McCarthy’s failure to promote Charleston.  The Eighth Circuit held none of those actions, independently or cumulatively, could constitute an adverse employment action.  The 2012 suspension fell outside of the two-year statute of limitations periods for § 1983 claims.  The court held Charleston’s later request for rescission of the suspension could not bring the adverse employment action within the applicable statutory period.  The 2013 reprimand could not constitute an adverse action, the court held, because there was no evidence alleged that the terms or conditions of Charleston’s employment changed; a note in a personnel file was insufficient to make a prima facie showing.  Similarly, Charleston’s transfer to the Transport Division did not materially alter his employment conditions because the transfer was largely lateral.  While he supervised fewer employees, he was transferred two-and-a-half months later to a position in which the number of employees increased. Charleston admitted the Transport Division performed essential functions of the sheriff’s department.  He did not receive a pay-cut and he could still work overtime.  Lastly, Charleston presented no evidence that the suspension or reprimand would have prevented him from appearing on the promotion list.  Without evidence showing how the promotion list was compiled, Charleston could not show an adverse action.


Barbee v. Big River Steel, LLC
, No. 18-2255, 2019 U.S. App. LEXIS 18527 (8th Cir. June 20, 2019)

 
Kim Pierce filed a proposed class action against Big River Steel, LLC for unpaid overtime wages under the Fair Labor Standards Act and related Arkansas law.  Pierce and Big River Steel reached a settlement agreement.  The parties filed a joint status report, which notified the court they had settled and would soon file a voluntary dismissal.  The district court then ordered the parties to submit the proposed settlement agreement and attorney billing records for approval.  The district court disapproved of the wage settlement and the attorney fees for independent reasons. 

Following that denial, Pierce died and the court stayed the case until her estate could be substituted as a party.  Paulette Barbee, the estate’s administrator, and Big River Steel submitted a new agreement.  The district court then approved of the new wage settlement and again disapproved of the proposed attorney fees amount.  The district court entered judgment with the full wage settlement amount and a reduced fee amount. Barbee appealed, which Big River Steel did not contest.

The Eighth Circuit, noting there is a circuit split on the issue of whether all FLSA settlements require judicial approval, sided with Barbee.  Specifically, the split centers on whether disputes over hours worked or wages owed require judicial approval.  The Second and Eleventh Circuits have held that such suits require approval of a district court or the Department of Labor, while the Fifth Circuit has held no such approval is required.

In this case, the Eighth Circuit did not reach that issue because, in ruling for Barbee, the court held that “any authority for judicial approval of FLSA settlements in 29 U.S.C. § 216 does not extend to review of settled attorney fees.”  Specifically, the court noted that fees are allowed “in addition to any judgment awarded.”  Because how much employers pay employees’ counsel has no bearing on whether the employer has adequately settled the wage or hours case, even if judicial review of all FLSA settlements is proper, that judicial review would not extend to attorney fees.

The court noted that its reading of the FLSA “is consistent with the rationale of the circuits that require approval for all FLSA settlements because such approval serves ‘the FLSA’s underlying purpose’ of protecting workers’ rights.”  And in a footnote, the court wrote that FLSA settlements, if subject to judicial review, would leave courts with the authority to ensure attorney fees were in fact negotiated without regard for the underlying merits claims.
 
The Eighth Circuit vacated the district court decision and, because there was no judicial authority to review the proposed attorney fees, did not remand the case.

Submitted by:

Frances E. Baillon is a recognized advocate for those who have been victimized by the unfair and illegal practices of employers. She currently serves as Vice President of the Minnesota Chapter of the National Employment Lawyers Association, as well as chair of its Amicus Committee, and is a member of the MSBA’s Civil Jury Instruction Committee on Employment Law.

Frances E. Baillon
Baillon Thome Jozwiak & Wanta LLP
100 South Fifth Street, Suite 1200
Minneapolis, MN 55402
(612) 252-3570
http://www.baillonthome.com/

Miller Jozwiak
Law Clerk, Baillon Thome Jozwiak & Wanta LLP
University of Minnesota School of Law
Juris Doctorate Candidate, May 2021


D.C. Circuit

Marshall County Coal Company v. Federal Mine Safety and Health Review Commission, 923 F.3d 192 (D.C. Cir. 2019)

In Marshall County Coal Company v. Federal Mine Safety and Health Review Commission, the D.C. Circuit declined to address the question of whether an employer’s allegedly retaliatory act must be motivated by a miner’s protected activity to run afoul of the Federal Mine Safety and Health Amendments Act of 1977’s (the “Act”) whistleblower protection provision, finding that the employer’s actions violated the act regardless of what standard was used.

After a mining company acquired 5 mines in West Virginia, miners filed a flurry of complaint with the Mine Safety and Health Administration (“MSHA”) under Section 103(g) of the Act, which permits miners who have a reasonable ground to believe that safety violations exist to obtain an immediate inspection of the mine by reporting the violation to MSHA.  The miner believed that these complaints were spurious and had been filed to harass it, rather than because of genuine safety concerns.  The miner held five mandatory employee meetings at which stated that the MSHA complaints put the miners’ jobs at risk and required that if the miners reported violations to MSHA they must also report the same violations to the company.
MSHA found that the meetings constituted impermissible interference and retaliation under the Act using a two-part test.  First, the meetings would be reasonably viewed, from the miners’ perspective, as tending to impair the right to report violations to MSHA, and second, the employer had not justified the meetings with a legitimate and substantial reason that outweighed the interference with the miners’ protected right.  The D.C. Circuit upheld these findings, ruling that the employer’s heavy-handed attempts to suggest that employees would lose their jobs due to the filing of MSHA complaints satisfied these requirements.  While the employer challenged MSHA’s two-part test and claimed that it improperly imposed liability without a finding that the employer’s action was motivated by the miners’ protected activity, the D.C. Circuit declined to address whether proof of motivation was a required element because there was substantial evidence that the employer was motivated by the miners’ protected activity.  Therefore, the employer was properly liable under any standard.

Haynes v. District of Columbia Water and Sewer Auth., ___ F.3d ___, 2019 WL 2147249 (D.C. Cir. 2019)

In Haynes v. District of Columbia Water and Sewer Authority, an ex-employee sought to bring disability, age, and race discrimination claims against his former employer.  He was unable to do so, however, due to his failure to meet various procedural requirements, leading the D.C. Circuit to affirm the district court’s grant of summary judgment in favor of the employer.

The employee in question was employed as an Electrical Equipment Repairer, holding an apprentice electrician license.  During a broader restructuring, the employer discovered that apprentice electricians were required to be directly supervised by master electricians.  The employer did not employ, and could not hire, enough master electricians to supervise all of its apprentice electricians.  The employer therefore replaced the employee’s position with a new position requiring a journeyman electrician’s license that permitted unsupervised work.  The employer set a deadline for employees to obtain this license or see their employment terminated.

The employee asserted that he had dyslexia and requested more time to obtain the new license.  He claimed that younger, white employees were given more time, not subjected to the heightened license requirement, or allowed to return to school for additional training.  While the employer provided the employee an additional 60 days to obtain the journeyman’s license, it terminated his employment when he failed to do so.

The employee was never able to pursue his claims on their merits, because he both failed to timely file his complaint and exhaust his administrative remedies.  First, he did not file his federal court complaint for 16 months after receiving his right to sue letter from the EEOC, far exceeding the 90-day filing deadline.  The court rejected the employee’s claim that his dyslexia excused the late filing, holding that while the condition may have impaired the employee’s understanding of his obligations, it did not render him unable to handle his everyday affairs as required to toll the statute of limitations. 

The court also found that the employee’s race and age claims were not exhausted because his EEOC charge only asserted a claim of disability discrimination.  The employee did not check the boxes for race, color, or age discrimination on the charge form, and his charge’s narrative did not mention age or race.  While the employee did mention age in his intake questionnaire, he also checked a box on the questionnaire stating that he wanted to speak with an EEOC employee before filing a charge and, therefore, his questionnaire was not itself a charge.  Moreover, he crossed out the portion of his questionnaire addressing age issues.  Based on these facts, the court held that the questionnaire did not provide any notice to the EEOC that it should investigate an age-based claim and therefore the employee did not exhaust administrative remedies with respect to that claim.

Figueroa v. Pompeo, 923 F.3d 1078 (D.C. Cir. May 10, 2019)

In Figueroa v. Pompeo, the D.C. Circuit reversed the district court’s grant of summary judgment in favor a federal agency employer, finding that its general reliance on rankings issued during its formalized promotion review exercise, without describing how those rankings were formulated for the pertinent candidates, failed to sufficiently articulate a legitimate, non-discriminatory reason for the employee’s non-promotion as is necessary to satisfy the second step of the McDonnell Douglas framework.

In this case, the plaintiff-employee was a Hispanic foreign service officer.  Every year, the Foreign Service went through a promotion review exercise using a formalized process.  First, each department determined the number of available promotion slots, which were divided between two selection boards.  The first board reviewed all employees across each salary level.  The second board reviewed employees across each subject matter area who had been recommended by the first board but not immediately promoted.  The board received candidate files for each candidate, and each member of the board reviewed the files independently.  Any candidate recommended by any one member became a finalist.  The finalists’ files were reviewed a second time, and given an overall score of 1 to 10 based on an 8 page chart of precepts in 6 performance areas.  Some of these areas were more or less subjective in nature.  The highest scoring finalists would be promoted.  The employee applied for promotion each year, but was never selected as a finalist.

The district court granted summary judgment based on the Foreign Service’s proferred legitimate, non-discriminatory justification that other candidates were deemed better qualified through the promotion exercise.  The D.C. Circuit found, however, that the Foreign Services did not present a “clear and reasonably specific explanation.”  No specific reasons or basis was provided for the rankings issued by the promotion board showing how the standards in the precept chart were applied to the employee’s specific circumstances.  This did not present the employee with a “full and fair opportunity for rebuttal.”  Instead, the employer was required to provide evidence giving “far notice as to how the employer applied the standards to the employee’s own circumstances.”

Submitted by:

 

Jack Blum is a member of the Employment Disputes, Litigation and Arbitration practice in the Washington, D.C. office of Polsinelli, PC.  Mr. Blum represents employers in connection with claims of discrimination, wage and hour issues, the interpretation of employment agreements, the enforcement of restrictive covenants, and misappropriation of trade secrets.