Supreme Court Hears "Employee-Relationship" Retaliation Case

The U.S. Supreme Court heard oral arguments earlier this week in a case that could impact how courts and HR managers define "employee retaliation" under federal anti-discrimination laws. The facts underlying the case, Thompson v. North American Stainless LP, began approximately 13 years ago when Eric Thomspon was hired by North American Stainless (the "Company"). The Company hired Miriam Regalado three years later. The two Company employees soon entered into a relationship, and eventually were engaged to be married. In February 2003, Regalado sued the company, alleging gender discrimination. Three weeks after the Company became aware of Regalado's lawsuit, the Company fired Thompson. Thompson subsequently filed suit in the U.S. District Court for the Eastern District of Kentucky, arguing that he was wrongfully terminated under Title VII of the Civil Rights Act of 1964. The court dismissed his complaint, holding that Title VII doesn't permit claims based upon of third-party retaliation. The U.S. Court of Appeals for the Sixth Circuit affirmed the lower court's decision, and the U.S. Supreme Court eventually agreed to hear the case.

At oral argument, the Supreme Court appeared reluctant to extend its retaliation jurisprudence, and the protections of Title VII's retaliation provisions to such third-party relationships. "Put yourself in the shoes of an employer," said Justice Samuel A. Alito, Jr.. "You want to take an adverse employment action against Employee A. You think you have good grounds for doing that, but before you do it, you want to know whether you're potentially opening yourself up to a retaliation claim." He continued, noting the implausibility of opening up a claim of retaliation for every kind of employee relationship. "Does the employer have to keep a journal on the intimate or casual relationships between all of its employees, so that it knows what it's opening itself up to when it wants to take an action against someone?" The court also debated what kind of relationships would count—a spouse? A friend? A pal? "Can you help provide where the clear line is?" asked Justice Alito. "Does it include somebody who just has lunch in the cafeteria every day with the person who engaged in the protected conduct? Somebody who once dated the person who engaged in the protected conduct?" Thompson's counsel argued the relationship in this case was strong enough to warrant a claim of retaliation. "The reason the relationship is important in this case is because it tends to render plausible the argument that there's a causal connection between the adverse action visited on Thompson in this case." The Company's counsel maintained the line of reasoning that had defeated Thompson in the lower courts. It asserted that the court's previous rulings show that Title VII does not cover third-party employee retaliation, and that because Thompson did not engage in "protected conduct" (i.e. he himself allegedly had not discriminated against), he did not have standing to sue the Company.

Although the Supreme Court appears from its questioning at the oral argument to be reluctant to extend the protections of Title VII's retaliation provisions to Thompson in this case, the case would have far-ranging legal implications for employers and employees if Thompson were to prevail. If Thompson wins, employees who are fired could gain a legal foothold when arguing they were terminated because of retaliation for another employee's behavior.

Empire BCBS Sued Over Denial of Autism Coverage

Empire Blue Cross ("BCBS") has been sued in federal court in Michigan for allegedly denying health care coverage for autism treatment. Two Michigan residents filed a proposed class action against BCBS earlier this week contending that the insurer ERISA by systematically denying payment for certain treatments for autism. See Lorigan v. Empire Blue Cross Blue Shield, E.D. Mich., No. 10-14842. The lawsuit alleges that BCBS violates ERISA each time it refuses to pay for “applied behavior analysis” ("ABA") received by autistic children insured by BCBS health plans. There have been previous attempts to bring ERISA class actions against BCBS in the past. The lawsuit also alleges that ABA treatment is a “scientifically valid, medically accepted, and mainstream treatment” for autism spectrum disorder, and that by refusing to pay for ABA treatment, Empire Blue Cross has violated the terms of its ERISA health insurance plans.

Other cases have challenged the same actions of other Blue Cross Blue Shield Plans. In March 2009, a federal court in Michigan denied a class certification motion in a health plan participant's case challenging Blue Cross Blue Shield of Michigan's refusal to pay for ABA therapy. In another case dismissed earlier this year, Blue Cross Blue Shield of Tennessee Inc. was also targeted in an ERISA class action over its refusal to pay for ABA treatment. The case was dismissed earlier this year by the U.S. District Court for the Eastern District of Tennessee

Supreme Court to Hear Wal-Mart Bias Case

The Supreme Court has agreed to entertain an appeal in what has been labeled the biggest employment discrimination case in the nation’s history. The case, Wal-Mart Stores v. Dukes, involves claims that Wal-Mart discriminated against hundreds of thousands of women in pay and promotion. The lawsuit seeks back pay that could amount to billions of dollars. The question before the court is not whether there was discrimination but rather whether the claims by the individual employees may be combined as a class action. Wal-Mart, which says its policies expressly bar discrimination and promote diversity, said the plaintiffs, who worked in 3,400 different stores in 170 job classifications, cannot possibly have enough in common to make class-action treatment appropriate.

In April, an 11-member panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, ruled by a 6-to-5 vote that the class action could go forward. Judge Michael Daly Hawkins, writing for the majority, said the company’s policies and treatment of women were similar enough that a single lawsuit was both efficient and appropriate. He added that the six women who represent the class, four of whom had left Wal-Mart, had claims typical of the other plaintiffs. The size of the proposed class was not an obstacle, Judge Susan P. Graber wrote in a concurrence. “If the employer had 500 female employees, I doubt that any of my colleagues would question the certification of such a class,” Judge Graber wrote. “Certification does not become an abuse of discretion merely because the class has 500,000 members.” That drew a sharp dissent from Chief Judge Alex Kozinski. “Maybe there’d be no difference between 500 employees and 500,000 employees if they all had similar jobs, worked at the same half-billion square foot store and were supervised by the same managers,” he wrote. “But the half-million members of the majority’s approved class held a multitude of jobs, at different levels of Wal-Mart’s hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female).” “They have little in common but their sex and this lawsuit,” Judge Kozinski concluded. In a second dissent, Judge Sandra S. Ikuta said that allowing the case to go forward as a class action would prevent Wal-Mart from presenting tailored defenses to individual claims.