{"id":51,"date":"2019-12-09T18:16:45","date_gmt":"2019-12-09T18:16:45","guid":{"rendered":"https:\/\/www.fedbar.org\/labor-employment-law-section\/\/september-2018\/"},"modified":"2019-12-09T18:16:45","modified_gmt":"2019-12-09T18:16:45","slug":"september-2018","status":"publish","type":"page","link":"https:\/\/www.fedbar.org\/labor-employment-law-section\/le\/circuit-updates\/2018-2\/september-2018\/","title":{"rendered":"September 2018"},"content":{"rendered":"

Second Circuit<\/span><\/span><\/b><\/p>\n

Tapia v. BLCH 3rd Avenue<\/em>, ___ F.3d ___, 2018 WL 4685628 (2d Cir. Oct. 1, 2018).<\/strong><\/span><\/p>\n

Where plaintiffs\u00a0 prevailed at trial alleging they were denied minimum and overtime wages under state and federal law, the district court held that plaintiffs cannot recover liquidated damages under both statutes. The Court of Appeals affirms.\u00a0 The trial court awarded liquidated, or double, damages under the state law claim. But federal law also provides for these double damages. While plaintiffs seek liquidated damages under federal law,\u00a0 the Second Circuit has already held that the Fair Labor Standards Act does not allow for duplicative liquidated damages. The Court of Appeals said that in Rama v. Islam<\/i>, 887 F.3d 118 (2d Cir. 2018). Plaintiffs also appeal because they seek damages against an individual, Sharma. The trial court held that Sharma was not personally liable because plaintiffs could not satisfy the relevant factors guiding that inquiry, including whether Sharma had control over the plaintiffs\u2019 employment. The multi-factor test is inherently factual, and since the Court of Appeals will not second-guess the district court\u2019s factual findings if they have some basis in the record, the ruling in Sharma\u2019s favor stands.<\/span><\/p>\n

Judge Calabresi concurs, adding that the Second Circuit has never held that the FLSA bars a state <\/i>from awarding double or even treble damages for labor law damages in cases like this. Instead, \u201cour holding [in Rama<\/i>] is limited to reading the FLSA to vacate the federal <\/i>damage award, given the existence of state labor law damages.\u201d Judge Calabresi expresses concern Rama<\/i> could be read to mean that the FSLA damages should be vacated because state law does not allow double recovery. He worries that other federal courts \u201cwill read Rama<\/i> as making a holding as to what is required by New York state labor law,\u201d which would \u201ccreate all sorts of problems.\u201d<\/p>\n

Flood v. Just Energy<\/span><\/i><\/b>, ___F.3d ___, 2018 WL 4471630 (2d Cir. Sept. 19, 2018).<\/span><\/b>.<\/span>
The Court of Appeals holds that the Fair Labor Standards Act does not require management to pay \u201coutside salesmen\u201d overtime. Plaintiffs engaged in door-to-door solicitation to persuade customers to buy Just Energy\u2019s electricity or natural gas. Courts around the country are divided on whether Just Energy\u2019s salespersons are entitled to overtime. The Second Circuit says they are not. Under the regulations, an outside salesman is someone whose primary duty is \u201cmaking sales\u201d or obtaining orders or contracts for services or the use of facilities, and who is customarily and regularly engaged away from the employer\u2019s place of business in performing these primary duties. Plaintiff Flood falls within the exception. He was \u201cmaking sales\u201d by going door-to-door selling Just Energy\u2019s products, and he got paid only when he was able to obtain a written contract. Flood argues that he was not \u201cmaking sales\u201d because defendant had discretion to reject the contracts he secured from customers. Rejecting that argument, the Court of Appeals says, \u201cwe do not agree that the outside salesmen exemption requires a showing that a selling employee has an unconditional authority to bind the buyer or his employer to complete the sale.\u201d Authority for this proposition lies with the Supreme Court\u2019s ruling in Christopher v. SmithKline<\/i> (2012), which \u201cdeclined to interpret the \u2018making sales\u2019 requirement to mandate a showing that an employee has fully consummated a sales transaction or the transfer of title to property.\u201d The Court in Christopher <\/i>also counseled against the use of technicalities to defeat the outside salesmen exception.<\/span><\/p>\n

Munoz-Gonzalez v. DLC Limousine Service, Inc., ___ <\/span><\/i><\/b>F.3d ___, 2018 WL 4471522 (2d Cir. Sept. 19, 2018)<\/span><\/b>.<\/span><\/p>\n

Long<\/span><\/span>: The Court of Appeals holds that limousine drivers are not entitled to overtime pay under the Fair Labor Standards Act. In this case, the Court applies the FLSA\u2019s \u201ctaxicab exception\u201d to the overtime rules. The Second Circuit has never interpreted the taxicab exception before, so it starts with the language of the statute in determining its scope. The statute does not define \u201ctaxicab,\u201d so the Court looks to Webster\u2019s New International Dictionary, the unabridged second edition from 1934, issued around the time of the FLSA. That dictionary says a taxicab is \u201c[a] passenger<\/span>\u2010<\/span>carrying vehicle, usually a motor vehicle designed to seat five or seven persons, with or without a taximeter, maintained for hire on public thoroughfares or at public stations or stands, but not operated on a schedule.\u201d More broadly, the FLSA exempts employees throughout the transportation industry, which was already regulated by other statutes.<\/span><\/p>\n

In this case, the Court of Appeals notes that while \u201cour Circuit has traditionally construed FLSA exemptions narrowly and against the employers asserting them,\u201d that framework changed in 2018, when the Supreme Court issued Encino Motorcars v. Navarro, <\/i>which <\/i>hat method of statutory interpretation for the first time. The Second Circuit states:<\/p>\n

\n

we conclude that there is no genuine dispute that DLC\u2019s drivers qualify for the taxicab\u00a0exemption. First, DLC\u2019s fleet consists of chauffeured passenger vehicles, including town\u00a0\u00a0cars, SUVs, and luxury vans. Second, DLC\u2019s cars are available for hire by individual\u00a0members of the general public. Third, DLC\u2019s cars take passengers wherever they want to\u00a0go and \u201cdo not cover fixed routes or adhere to fixed schedules\u201d or fixed termini.\u00a0\u00a0Accordingly, DLC\u2019s drivers qualify for the taxicab exemption.<\/span><\/span><\/p>\n<\/blockquote>\n

Submitted by:<\/strong><\/p>\n

Stephen Bergstein<\/a>, Esq. <\/p>\n

Bergstein & Ullrich, LLP
<\/span>5 Paradies Lane
<\/span>New Paltz, New York 12561
<\/span>(845) 419-2250
<\/span>www.TBULaw.com<\/a><\/span>
\nwww.secondcircuitcivilrights.blogspot.com<\/span><\/p>\n

Fourth Circuit<\/strong><\/span><\/span><\/span><\/p>\n

Equal Employment Opportunity Commission v. Baltimore County<\/span><\/i>, __ F.3d __ , 2018 WL 4472062 (4th Cir. Sept. 19, 2018).<\/span><\/strong><\/p>\n

The EEOC sued Baltimore County alleging that it violated the Age Discrimination in Employment Act, 29 U.S.C. \u00a7 621, by requiring older employees to pay higher retirement plan contributions than younger employees.\u00a0 The district court initially granted summary judgment in favor of the County.\u00a0 On appeal, the Fourth Circuit reversed.\u00a0 On remand, the district court entered partial summary judgment in favor of the EEOC on liability.\u00a0 The Fourth Circuit affirmed the partial summary judgment, and remanded for consideration of damages.\u00a0 On the second remand, the EEOC sought retroactive monetary relief, in the form of back pay to the affected employees.\u00a0 The district court denied the motion, concluding that it had discretion to grant or deny back pay.\u00a0 In the alternative, even if back pay were a mandatory remedy, the district court concluded that it would deny back pay pursuant to its equitable powers because of the EEOC\u2019s delay in bringing litigation.\u00a0 The EEOC appealed.<\/span><\/p>\n

The enforcement provision of the ADEA, 29 U.S.C. \u00a7 626(b), confers jurisdiction on federal courts to \u201cgrant such legal or equitable relief as may be appropriate to effectuate the purposes of\u201d the statute.\u00a0 Upon enacting the ADEA, Congress incorporated \u00a7 216(b) of the Fair Labor Standards Act, which provides that any employer who violates the FLSA \u201cshall be liable\u201d for back pay, among other remedies.\u00a0 On appeal, the County relied on the broad language of the ADEA enforcement provision to contend that courts have discretion to grant or deny relief, including back pay.\u00a0 The EEOC argued that back pay was mandatory, citing Congress\u2019s incorporation of \u00a7 216(b) of the FLSA into the ADEA.\u00a0 <\/span><\/p>\n

The Fourth Circuit agreed with the EEOC, holding that retroactive monetary relief, including back pay, is mandatory upon a finding of liability for violation of the ADEA.\u00a0 The Court first cited the remedial purpose of the ADEA.\u00a0 The Court then examined Congress\u2019s intent when it incorporated \u00a7 216(b) of the FLSA into the ADEA.\u00a0 The Court concluded that because back pay was a mandatory legal remedy under the FLSA at the time Congress enacted the ADEA, Congress intended to provide a mandatory remedy when it incorporated \u00a7 216(b) into the ADEA.\u00a0 The Fourth Circuit also cited Supreme Court law for the general proposition that where the ADEA adopted part of the FLSA, the ADEA provision should be interpreted in the same way as its FLSA counterpart.\u00a0 Finally, the Fourth Circuit concluded that the legislative history of the ADEA confirmed that Congress deliberately chose to incorporate the FLSA\u2019s remedies into the ADEA.<\/span><\/p>\n

The Fourth Circuit rejected the County\u2019s reliance on Title VII cases where the Supreme Court has held that retroactive monetary relief is discretionary.\u00a0 While back pay is a discretionary equitable remedy under Title VII, it is a mandatory legal remedy under the ADEA.<\/span><\/p>\n

Although the EEOC conceded that it unduly delayed its investigation, causing the County to incur additional back pay liability, the EEOC represented that it would not to seek back pay for the period of delay.\u00a0 Based on this representation, the Fourth Circuit concluded that the delay did not affect its analysis on appeal.\u00a0 Therefore, the Fourth Circuit vacated the district court\u2019s order and remanded for a determination of the amount of back pay.<\/span><\/p>\n

Submitted by: <\/strong>
<\/span>Paul K. Sun<\/a>, Jr.
<\/span>Kelly Margolis Dagger
<\/span>Ellis & Winters LLP
<\/span>paul.sun@elliswinters.com<\/a><\/span>
\nkelly.dagger@elliswinters.com<\/span>
\nPost Office Box 33550
<\/span>Raleigh, North Carolina 27636
<\/span>Telephone: 919.865.7014
<\/span>www.elliswinters.com<\/font><\/a><\/span> <\/span><\/p>\n

Fifth Circuit<\/strong>
<\/span><\/span>
DeVoss v. Southwest Airlines Co.,<\/span><\/b><\/span><\/i>__F.3d __, 2018 WL 4268435 (5th Cir. Sept. 7, 2018).<\/span><\/b><\/p>\n

<\/span><\/p>\n

Amy DeVoss worked as a flight attendant for Southwest Airlines.\u00a0 She took sick leave for sinusitis from June 7 -11, 2018.\u00a0 On June 8th<\/sup>, Southwest sent her notice of FMLA eligibility for a serious health condition and asked that she return her FMLA application by June 23rd<\/sup>.\u00a0 DeVoss did not submit an application expressing an intent to take FMLA-protected leave by that deadline.\u00a0 A few weeks later, on June 24, DeVoss called Southwest to invoke a commuter policy when she realized that she would be late for work.\u00a0 After being advised that the commuter policy did not apply, DeVoss asked how many points would be assessed for a no-show versus a sick call.\u00a0 After being told how many points would be assessed for a no-show, she said she would not be at work because she was sick with sinusitis.\u00a0 Southwest initiated an internal investigation after DeVoss missed a 3-day work assignment.\u00a0 It determined that DeVoss had been dishonest when she claimed to be ill on June 24th<\/sup> and terminated her for dishonesty.\u00a0 DeVoss filed a grievance under the Collective Bargaining Agreement, but it was denied.\u00a0 DeVoss later filed suit against Southwest alleging FMLA interference and retaliation.\u00a0 <\/span><\/p>\n

Rejecting DeVoss\u2019s effort to stablish a prima facie case because she could not establish that she notified Southwest of her intent to take FMLA leave, the district court issued summary judgment.\u00a0 The court also ruled that, even if she had established a prima facie case, she failed to establish that Southwest\u2019s proferred reason for termination was pretextual, and that DeVoss had no basis for a retaliation claim.\u00a0 <\/span><\/p>\n

On appeal, the Fifth Circuit reiterated the five elements of an FMLA interference claim, finding that DeVoss failed to establish the fourth element (she gave proper notice of her intention to take FMLA leave).\u00a0 Plaintiff argued that her failure to give notice of the need for FMLA was excused because Southwest failed to provide her with another FMLA notice of eligibility, but the Fifth Circuit held that, because the two absences stemmed from the same illness, Southwest did not need to re-issue the FMLA eligibility notice for the June 24th<\/sup> absence.\u00a0 The court also rejected DeVoss contention that Southwest\u2019s reason for termination was pretextaul, finding that Southwest had a good faith belief that DeVoss had lied about being sick.\u00a0 Finally, the court rejected DeVoss\u2019 arguments of alleged procedural irregularities in the termination process<\/span><\/p>\n

Roberson-King v. Louisiana Workforce Commission, Office of Workforce Development<\/span><\/i><\/b>, __F.3d __, 2018 WL 4402110 (5th Cir. Sept. 17, 2018).<\/span><\/b>.<\/span><\/p>\n

In June 2014, Angela Roberston-King applied for a promotion to a district supervisor position from her position as a rehabilitation counselor at Louisiana Rehabilitation Services.\u00a0 After being interviewed, but not selected, for the promotion, Plaintiff filed suit alleging that she was not promoted because of her race.\u00a0 The district court dismissed Plaintiff\u2019s state law tort claim pursuant to Rule 12(b)(6) and granted summary judgment on her Title VII claim.\u00a0 <\/span><\/p>\n

On appeal, the Fifth Circuit affirmed the trial court\u2019s decision that a claim of discrimination must be brought pursuant to Louisiana\u2019s Employment Discrimination rather than state tort law, finding a general tort claim inconsistent with the governing, specific employment law provisions.\u00a0 As to her Title VII claim, although Plaintiff established a prima facie case under the McDonnell Douglas standard, she could not overcome Defendant\u2019s legitimate business reason for its decision (i.e., the employee awarded the position was more competitive and had credentials that Plaintiff lacked).\u00a0 The court found that Plaintiff was not \u201cclearly more qualified\u201d than the promoted employee, and the employer\u2019s decision to weigh certain credentials over other qualifications was a reasonable business judgment.\u00a0 <\/span><\/p>\n

Submitted by:<\/strong>
Donna Phillips Currault
<\/a><\/span>Gordon, Arata, Montgomery, Barnett,
<\/span>McCollam, Duplantis & Eagan, LLC
<\/span>201 St. Charles Ave.\u00a0 40th Floor
<\/span>New Orleans, Louisiana 70170-4000
<\/span>Direct: (504) 569-1862
<\/span>Email:\u00a0 <\/span>dcurrault@gamb.law<\/font><\/span><\/a><\/span> <\/span><\/p>\n

Sixth Circuit<\/strong><\/span><\/span><\/span><\/p>\n

Bullington v. Bedford County, __F.3d__, 2018 WL 4579692 (6th Cir. Sept. 25, 2018). <\/span><\/strong><\/p>\n

In Bullington v. Bedford County, __F.3d__ (6th Cir. 2018), the plaintiff filed a lawsuit against her employer alleging that it treated her differently because of her cancer diagnosis and treatment. The plaintiff claimed that this violated, among many others, (1) the Americans with Disabilities Act (\u201cADA\u201d) and (2) the Fourteenth Amendment\u2019s Equal Protection Clause. After the district court granted the county\u2019s motion to dismiss on the pleading, the plaintiff appealed to the Sixth Circuit.<\/span><\/p>\n

Addressing the plaintiff\u2019s ADA claim, the Sixth Circuit agreed with the district court that the plaintiff failed to exhaust her administrative remedies. While admitting that she had not filed a timely charge with the Equal Employment Opportunity Commission, the plaintiff argued that this requirement was waived because she had relied on advice from her prior counsel, relying on Curry v. United States Postal Service, 583 F. Supp. 334 (S.D. Ohio 1984). However, the court disagreed with the plaintiff\u2019s argument, finding that in Curry, equitable tolling applied because the misleading statement was made by an Equal Employment Opportunity counsel, an individual who was \u201cseemingly empowered by law to implement and enforce any discrimination statutes.\u201d In contrast, the plaintiff\u2019s prior private counsel did not have similar power to enforce the ADA. <\/span><\/p>\n

Turning to the plaintiff\u2019s constitutional claim, the Sixth Circuit held that the district court was incorrect in ruling that the plaintiff\u2019s ADA claim precluded her \u00a71983 claims for disability discrimination under the Fourteenth Amendment. First, the court distinguished a \u00a71983 claim to enforce the ADA with a \u00a71983 claim to enforce the U.S. Constitution. Accordingly, the district court had mistakenly relied on a previous Sixth Circuit decision, which held that the plaintiff could not use a \u00a71983 claim to enforce a purely statutory claim under Title VII (which has an analogous remedial scheme as the ADA). Moreover, the district court also erred in relying on an Eight Circuit decision that preceded and lacked the Supreme Court\u2019s guidance in Fitzgerald v. Banstable Sch. Comm., 555 U.S. 246 (2009), which had held that Title IX did not preclude a \u00a71983 claim for an Equal Protection violation.<\/span><\/p>\n

Based on Fitzgerald, the Sixth Circuit then considered the \u201cthree key components\u201d of the ADA\u2014(1) its text and history, (2) its remedial scheme, and (3) the contours of its rights and protection\u2014to conclude that Congress did not intend for the ADA to preclude a constitutional claim for disability discrimination. In examining the first component, the Sixth Circuit found that the ADA\u2019s statutory text and legislative history do not demonstrate a congressional intent to preclude simultaneous claims. Indeed, both the statutory language of the ADA and its legislative history provide that the ADA should not be construed to limit the rights and remedies under any other law that provides greater or equal protection for the rights of disabled individuals. Additionally, the close relationship between the ADA and Title VII confirms that Congress did not intend to preclude alternative remedies for disability discrimination, because at the time the ADA was passed, courts, including the Sixth Circuit, had frequently found that Title VII did not preempt an Equal Protection claim brought under \u00a71983. Finally, the Supreme Court in Fitzgerald similarly applied this reasoning to find that Title IX does not preclude a plaintiff from bringing a \u00a71983 claim alleging a Fourteenth Amendment violation. Thus, the Sixth Circuit concluded that the ADA was not intended to displace \u00a71983 suits enforcing constitutional rights; rather, Congress envisioned the ADA to supplement, not replace, existing remedies to victims of disability discrimination. <\/span><\/p>\n

Regarding the second component, the Sixth Circuit found that an analysis of the ADA\u2019s remedial scheme showed that the ADA does not preempt the parallel Equal Protection claims for disability discrimination. Per the court, it had long held that an employee may bring a \u00a71983 claim for a constitutional violation along with a Title VII claim. Because the ADA employs the same remedial procedure as Title VII, the ADA\u2019s remedial scheme does not evince a congressional intent to preclude \u00a71983 disability discrimination claims for violation of the Fourteenth Amendment. <\/span><\/p>\n

Lastly, the Sixth Circuit found that the differences between the rights and remedies provided by the ADA and those provided by the Fourteenth Amendment evidence a lack of congressional intent that the ADA preclude separate enforcement of disabled individuals\u2019 Equal Protection rights. First, the rights created by the ADA differ from those already protected by the Equal Protection Clause.\u00a0 This is evidenced by how the stated purposes of the ADA pronounce protections that had not been firmly established and how, in enacting the ADA, Congress invoked its power not only under the Fourteenth Amendment but also under the Commerce Clause. Second, the protections available under the ADA and the Fourteenth Amendment vary in material respect, because they require different showings, analysis, and standards of proof. Accordingly, the court found that Congress did not intend the ADA to be the exclusive mechanism for addressing disability discrimination. <\/span><\/p>\n

In conclusion, the Sixth Circuit ruled that there was no congressional intent to abandon the rights and remedies provided for disabled individuals by the Fourteenth Amendment\u2019s Equal Protection Clause in enacting the ADA. Thus, a plaintiff asserting an ADA violation may also bring an Equal Protection claim for disability discrimination under \u00a71983. <\/span><\/p>\n

Pension Benefit Guar. Corp. v. Findlay Indus., Inc., et al., 902 F.3d 597 (6th Cir. 2018).<\/span><\/strong><\/p>\n

In Pension Benefit Guar. Corp. v. Findlay Indus., Inc., et al., 902 F.3d 597 (6th Cir. 2018), the Pension Benefit Guaranty Corporation (\u201cPBGC\u201d) brought action under the Employment Retirement Income Security Act (\u201cERISA\u201d) to collect the defendant Findlay\u2019s underfunded pension liabilities following its bankruptcy. When Findlay could not meet its obligations, the PBGC asked the court (1) to view the trust formed by Findlay\u2019s founder as a under-common-control \u201ctrade or business\u201d and (2) to apply the federal-common-law doctrine of successor liability to hold the son of Findlay\u2019s founder liable for some of Findlay\u2019s obligations. The district court denied the PBGC\u2019s requests, so it appealed to the Sixth Circuit.<\/span><\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>\u201cTrade or Business\u201d for ERISA Purposes<\/span><\/span><\/span><\/p>\n

In examining the PBGC\u2019s first contention that the trust formed by Findlay\u2019s founder is Findlay\u2019s commonly-controlled \u201ctrade or business,\u201d the Sixth Circuit set out the specific facts surrounding the trust. In 1986, Findlay transferred two properties to its founder and owner. Less than a month later, Findlay\u2019s founder conveyed the properties to an irrevocable trust, which was to provide for his sisters for life and then to be distributed equally to his two sons, one of whom was the trustee. For 16 years until the day Findlay went out of business, the trust leased the properties to Findlay. After all life beneficiaries of the trust had died, the trust was split between two sons of Findlay\u2019s founder, who were the majority shareholders and controlled Findlay in its final years. Based on these facts, the PBGC argued that the trust was jointly and severally liable for Findlay\u2019s pension liabilities because it was a commonly controlled \u201ctrade or business.\u201d <\/span><\/p>\n

The Sixth Circuit agreed with the PBGC. In so doing, the court ruled categorically that any entity that leases property to a commonly controlled company was a \u201ctrade or business\u201d for ERISA purposes. First, the court found that the district court erred in applying the Supreme Court\u2019s fact-intensive test in Comm\u2019r v. Groetzinger<\/i>, 480 U.S. 23 (1987). The court reasoned that Goertzinger<\/i>\u2019s treatment of the terms \u201ctrade\u201d or \u201cbusiness\u201d was narrow and specific to tax law. In addition, Groertzinger<\/i>\u2019s test requires courts to determine the primary purpose of an activity to ascertain a \u201ctrade or business,\u201d which, if applied in ERISA context, would create dangerous incentives. Specifically, entities would be incentivized to engage in reorganization while claiming a different primary purpose to escape underfunded-pension liability. Moreover, according to the court, applying Groetzinger<\/i> test in ERISA cases would not serve the legislative purpose. What is important for ERISA purposes is whether the assets are effectively the employer\u2019s and thus should be used to pay what it had promised its employee, not whether the employer\u2019s primary motive in dissipating its assets is to escape liability or otherwise. <\/span><\/p>\n

After finding that Groetzinger<\/i>\u2019s fact-intensive test was inapplicable, the Sixth Circuit turned to the purpose and structure of ERISA to determine the meaning of \u201ctrade or business.\u201d The court found that ERISA\u2019s structure demonstrated that the common control provision was designed to prevent employers from evading the obligations promised to their employees by operating through separate entities. Per the court, such a purpose could only be fulfilled with a categorical test, which would stop leases between commonly controlled entities as a way of shielding those entities from ERISA liability. Specifically, in the instant case, by conveying the land to the trust, Findlay guaranteed that it could still use and control the properties. Meanwhile, because Findlay did not technically own the properties, they were not included as Findlay\u2019s assets that were subject to its ERISA obligations. In other words, Findlay enjoyed the benefits of the land, but did not take any of the risk or responsibility that came with its ownership. On the other hand, the trust was completely shielded from any of the risk of an arms-length leasing arrangement with a lessee that was not under common control. The situations like the one at issue, according to the court, were precisely the types that the common-control rule aimed to prevent. In sum, the court concluded that leasing to a commonly controlled entity, like in the instant case, was categorically a \u201ctrade or business\u201d for ERISA purposes, and thus the trust created by Findlay\u2019s founder may be reached by the PBGC to satisfy a part of Findlay\u2019s underfunded-pension liabilities. <\/span><\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span>Application of the Federal-Common-Law Doctrine of Successor Liability in ERISA<\/span><\/span><\/span><\/p>\n

In examining the PBGC\u2019s second contention, the Sixth Circuit set out the pertinent facts surrounding the transfer of Findlay\u2019s assets. Specifically, after Findlay had gone out of business in 2009, two companies owned by a son of Findlay\u2019s founder purchased all of its assets, without assuming any of Findlay\u2019s $30 million underfunded-pension liabilities, through a series of transactions totaling $3.4 million. For the next four and a half years, the new companies generated profits totaling $12 million using Findlay\u2019s former assets, employing Findlay\u2019s former employees, making Findlay\u2019s former products, and selling to Findlay\u2019s biggest customers.\u00a0 Based on these facts, the PBGC argued that the federal common law\u2019s treatment of successor liability was applicable to hold the son and his company accountable for Findlay\u2019s liability.<\/span><\/p>\n

The Sixth Circuit agreed with the PBGC. Per the court, the creation of federal-common-law successor liability was essential to promote ERISA fundamental policies. ERISA aimed to protect the interests of the participating employees, of which a fundamental premise was the PBGC\u2019s power to enforce employers\u2019 promises to their employees. To fulfill its functions in the scheme of ERISA, the PBGC must be able to keep its payout minimum by holding employers liable for their promises to the employees. Thus, the creation of the equitable doctrine of successor liability was appropriate as it promoted ERISA\u2019s fundamental policy of the PBGC\u2019s enforcement power. Indeed, because ERISA did not expressly provide for the enforcement of situations like in this case, the court said that ERISA\u2019s fundamental policies would be frustrated absent successor liability: the promises Findlay made to its employees would not be kept, while the PBGC would be left paying millions of dollars of underfunded-pension liabilities. Finally, the court found that applying federal common law would be most appropriate. This is because Congress intended to establish employee benefit plan regulation as an exclusive federal concern and there had already been a body of federal common law applying successor liability in employment and labor cases.\u00a0 In sum, the court held that the federal-common-law doctrine of successor liability applied in the instant case, so the PBGC could look to the new companies to satisfy a part of Findlay\u2019s underfunded-pension liabilities.\u00a0<\/span>\u00a0 <\/span><\/p>\n

Submitted by:
<\/span><\/b>Jennifer L. Sabourin<\/a>
<\/span>Miller, Canfield, Paddock & Stone, P.L.C.
<\/span>150 W. Jefferson, Suite 2500
<\/span>Detroit, Michigan 48226
<\/span>sabourin@millercanfield.com<\/font><\/span><\/a><\/span>
https:\/\/www.millercanfield.com\/JenniferSabourin<\/font><\/a><\/span><\/span><\/span><\/b><\/span><\/span><\/p>\n

Eleventh Circuit <\/p>\n

Smelter v. Southern Home Care Services Inc.<\/span><\/i><\/b>, __F.3d __, 2018 WL 4560684 (11th Cir. Sept. 24, 2018).<\/span><\/b><\/p>\n

Plaintiff Smelter worked for two months as a Customer Service Supervisor for a home health co. in Georgia before her employment was terminated during her probationary period.\u00a0 She was the sole black person working in the office.\u00a0 She allegedly heard co-workers making racist comments, some of which were directed at her.\u00a0 On her last day a co-worker allegedly called her a \u201cdumb black n\u2014\u2013\u201d during an argument.\u00a0 Smelter claimed she was fired for reporting this epithet along with her co-workers\u2019 other racist comments to her direct supervisor.\u00a0 The supervisor claimed she did not report any comments.\u00a0 Smelter filed suit claiming discriminatory termination, hostile work environment, and retaliation under Title VII and 42 U.S.C. \u00a7 1981.\u00a0 The trial court granted summary judgment.<\/span><\/p>\n

The Eleventh Circuit reversed the grant of summary judgment on the hostile work environment claim, and affirmed on the remaining claims because she provided insufficient evidence of pretext in response to employer\u2019s legitimate, nondiscriminatory reasons for termination.<\/span><\/p>\n

Smelter did not report alleged harassment until the last day of employment, but she claims a supervisor overheard some of the remarks.\u00a0 Though she did not report the alleged harassment earlier, the Court found that her testimony about the impact the harassment had on her could lead a reasonable jury to conclude she subjectively perceived the co-workers\u2019 conduct as hostile and abusive.\u00a0 As to the objective inquiry, eight examples of racist remarks made in Plaintiff\u2019s presence during her two months of employment was harassment that was pervasive.\u00a0 A co-worker\u2019s one-time use of an epithet to insult her in the midst of an argument, along with alleged daily racist comments by co-workers in the two months, are sufficiently severe for a hostile work environment, and grant of summary judgment reversed.\u00a0 Providing little to no evidence of the impact the harassment had on her job performance did not require the dismissal of her claim.<\/span><\/p>\n

As to the discriminatory termination and retaliation claims, Plaintiff\u2019s failure to rebut even one nondiscriminatory reason was sufficient to warrant summary judgment.\u00a0 Despite apparent tension between \u201cnearly identical\u201d and \u201cthe same or similar conduct\u201d standards for comparators, it made no difference in this case since Smelter\u2019s comparator evidence was insufficient.<\/span><\/p>\n

Gogel v. Kia Motors Manufacturing of Georgia, Inc.<\/span><\/i><\/b>, __ F.3d __, 2018 WL 4558300 (11th Cir. Sept. 24, 2018).<\/span><\/b><\/p>\n

Title VII protects H.R. employees when they support other employees in asserting Title VII rights, and the manner of support is reasonable.\u00a0 The test in this Circuit has always sought to balance achieving the purposes of Title VII with avoiding workplace disruption.\u00a0 Regarding H.R. employees, sometimes the balance requires accepting an employee\u2019s opposition to discrimination as protected activity even where the employee has stepped outside the bounds of work rules to do so.\u00a0 Here, the Court found that Gogel tried to use Kia\u2019s internal framework, and her deviation from it furthered the purposes of Title VII \u201cwithout impacting Kia\u2019s illusory efforts at voluntary compliance.\u201d\u00a0 The Court reversed the grant of summary judgment on the retaliation claim.<\/span><\/p>\n

The Court affirmed summary judgment on the gender and national origin discriminatory termination claims.\u00a0 Though there was evidence Gogel suffered discrimination based on her gender and national origin, there is no evidence that discrimination formed a basis for termination.\u00a0 The record indicated that Kia fired Gogel for assisting a co-worker with her charge.<\/span><\/p>\n

The dissent asserted it is hard to argue that a high-ranking manager whose job duties include working to resolve employee disputes without litigation can be effective in that position if she instead solicits subordinates to sue.\u00a0 The dissent argued that the act of soliciting another employee to file a claim \u2013 when that action violates an essential duty of an employee\u2019s job \u2013 is per se unreasonable.<\/span><\/p>\n

Submitted By:
<\/span><\/b>Patricia T. Paul<\/a>
<\/span>Attorney at Law
<\/span>OLIVER MANER LLP
<\/span>218 W. State Street
<\/span>P. O. Box 10186
<\/span>Savannah, Georgia\u00a0 31412
<\/span>(912) 236-3311
<\/span>(912) 429-3639 (cell)
<\/span>ppaul@olivermaner.com<\/font><\/span><\/a><\/span>
www.olivermaner.com<\/font><\/a><\/span> <\/span><\/span><\/p>\n

D.C. Circuit<\/span><\/span><\/b><\/p>\n

Teachers College, Columbia University v. National Labor Relations Board<\/span><\/i><\/b>, 902 F.3d 296 (D.C. Cir. 2018)<\/span><\/b><\/p>\n

In Teachers College, Columbia University v. National Labor Relations Board<\/i>, the NLRB found that an employer committed unfair labor practice by refusing to comply with a union\u2019s request for information about non-bargaining unit employees where that request was relevant to the union\u2019s responsibilities.\u00a0 In the case, the union had long suspected that the employer had violated the applicable CBA by transferring work that was supposed to be reserved for bargaining unit members to non-unit employees.\u00a0 The union filed a grievance on this matter, and requested a list of all non-unit employees.\u00a0 Later, the union focused its request by having its members canvass the employer\u2019s departments to identify 34 non-unit positions that it believed were performing unit work.\u00a0 The union presented these suspicions to the employer in chart format, providing information about each position and the basis for the union\u2019s belief, but the employer continued to refuse to provide information.<\/span><\/p>\n

The court affirmed the NLRB\u2019s finding that the employer\u2019s refusal to provide information was an unfair labor practice.\u00a0 The court noted that employers are subject to a duty to provide requested information that will enable the union to negotiate effectively and perform its other duties.\u00a0 The court further found that the union had met its low burden to show that the requested information was relevant.\u00a0 While the information was not presumed relevant because it concerned non-bargaining unit employees, the court noted that the threshold of relevance is relatively low, requiring only that the union show based on objective evidence that the information is of probable or potential relevance to some pending issue.\u00a0 The court found that the chart of positions provided by the union more than met this threshold.<\/span><\/p>\n

Submitted by:
<\/span><\/b>Jack Blum<\/a>
<\/span>The Law Firm of Paley Rothman
<\/span>4800 Hampden Lane
<\/span>6th Floor
<\/span>Bethesda, MD 20814-2930\u00a0
<\/span>jblum@paleyrothman.com<\/font><\/span><\/a><\/span>
(301) 968-3415<\/span><\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/span><\/span><\/span><\/b><\/p>\n


\n\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

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