More Soup Please - Shelter Employee's Title VII Retaliation Claim Revived

Noting there was much that was “odd” about the case, and “too many loose ends” to have warranted summary judgment, the United States Court of Appeals for the Seventh Circuit revived a discharged employee’s Title VII retaliation claim against a social service agency that fired him weeks earlier, but didn’t actually pull the trigger until the day after receiving his EEOC charge, his second against the agency. See Ledbetter v. Good Samaritan Ministries (February 6, 2015).

 

By way of background, the employee worked at an emergency shelter for a nonprofit agency that ran the shelter, a soup kitchen, and other services for the needy. A shelter resident complained to the agency’s executive director that she had been frightened by the employee, who had reprimanded her for not completing assigned chores and then threatened to evict her. The executive director, along with the employee’s direct supervisor, spoke to him about the incident and warned that future misbehavior could result in disciplinary action. Riled, the employee denied the resident’s allegations and filed a charge of race discrimination and retaliation with the EEOC; he then filed a Title VII suit, which was eventually dismissed. Meanwhile, though, four days after he filed suit, another supervisor complained to the executive director about an incident in which he’d been “frightened and humiliated” by the employee. Again, the executive director and immediate supervisor spoke to the employee and issued a warning about his intimidating conduct. They contended that after that meeting, the employee falsely accused staff members and members of the agency’s board of directors of lying and of trying to get him fired (accusations the employee denied). They also claimed that, nine days after the latest reprimand (on October 14), the pair had a meeting at which they decided to fire him. However, the day before he had been admonished a second time, the employee had gone to the EEOC once again; he filed a second charge contending he was being discriminated against based on his race and his previous EEOC charge. The agency officials learned of the second charge on October 19, and the next day he was fired, prompting a second lawsuit alleging retaliation. The agency insisted that the discharge decision was made five days earlier and for wholly unrelated reasons, and it was able to convince the district court as much.

According to the Court of Appeals, the problem was, the employer dawdled; they didn’t fire the employee when they claimed they made the decision to do so. “We can’t know how long they would have dawdled—but it is a possible inference that they fired him on the twentieth rather than later (or maybe never) because the filing of his second EEOC charge, which they learned about the day before, was the last straw,” Judge Posner speculated for the court. “An EEOC charge is often a preliminary to a suit. His first EEOC charge had eventuated in a suit; the second was likely to as well; how many more would there be?” Particularly in light of the suspicious timing, the appeals court deemed it quite plausible that, were it not for his filing of the second charge, the agency’s (ostensibly) sharpened ax might never have fallen. Moreover, the employer submitted a supplementary memorandum identifying the date of that fateful meeting as “on or about” October 14, yet the defense hinged on the meeting having taken place on that date. And the appeals court presumed that the officials would have had precise knowledge of the date. Making matters worse, in interrogatories, one of the officials said he didn’t remember the specific date that the meeting took place. Also unconvincing, in the court’s eyes, was the employer’s assertion that the supervisor would have executed the firing earlier, but he had been working 12-hour shifts at his other job and so was prevented from meeting with the doomed employee. The supervisor offered no supporting evidence to back up his work schedule claim and, at any rate, the court pointed out that there were other opportunities to effectuate the termination in the days following the alleged meeting, and other agency officials who could have done so.

There were still other problems with the case that made the appeals court “wonder what was really going on”: The two officials who decided to fire the employee each submitted one-page affidavits that look to have simply “parroted” language inserted by lawyers—and which appeared to have run afoul of Rule 56’s requirement that the affidavit of a lay witness be based on the witness’s personal knowledge. Personal knowledge was crucial in this particular case, the court observed, because while the pair contended that they fired the employee for making false accusations, they had no personal knowledge of such false accusations, and their allegation that he made them was hearsay. Even the reference to “false allegations,” set forth as well in the employer’s memorandum in support of summary judgment, troubled the court. The “allegations” may well have been referring to the employee’s first or second EEOC charge, for all the court knew, in which case the firing decision would have been retaliatory. In addition, the employee alleged that when he was finally summoned to meet with his supervisor, he was asked, before being fired, whether he had filed a second EEOC charge, and he acknowledged that he had indeed. As the court saw it, the implication was that, had he said “no,” the supervisor might have delayed his discharge until he could verify whether the denial was truthful. And if so, then the firing was retaliatory. Finally, in response to the employee’s second EEOC charge, the agency lawyer wrote to the EEOC that the employee was terminated “on October 20” and “subsequent to his display of defiant and insubordinate behavior towards his immediate supervisor.” That conflicted with the stated basis for discharge: false accusations and mistreatment of coworkers and residents occurring prior to October 14. And the letter to the EEOC did not state that the decision to terminate was made on October 14—yet another indication, in the court’s view, “that the defendants may have concocted that date.” Accordingly, the Seventh Circuit reversed the grant of summary judgment in the employer’s favor.

 

Oklahoma University Professor's Discrimination Claims Survive Summary Judgment

A federal district court in Oklahoma recently denied a university’s motion for summary judgment on the Title VII race discrimination and retaliation claims of a professor who was denied tenure after complaining about racist Facebook comments made by three other professors, two of whom were allowed to vote on his tenure application. The employee’s Sec. 1981 claims against several individuals also proceeded based on evidence that a clearly established constitutional right was violated. However, his state law claims failed. See Hannah v. Northeastern State University (February 5, 2015).

 

The employee, who is Native American, was hired as an associate professor of English at Northeastern State University to begin in January 2010. Soon thereafter, he was appointed chair of the language and literature department. A colleague, who previously served as assistant chair but was prevented from serving as chair under a nepotism policy because his wife was also a professor, commented on the appointment on Facebook. His comments included that he “salutes” the university’s direction; “Good luck with that, then!” and, in response to another comment, “There will be an ‘election’ the first week of February. They’re making a f*cking indian chair.” In July 2010, the same colleague, his wife, and a third professor posted several disparaging Facebook comments on the employee’s choice of outdoor venue for a department meeting. At one point, the wife stated that “our chair will bring all the handbaskets we need. He’s probably woven them himself.” And in response to a post about who attended, she wrote “Maybe they were all eaten by wolves.” Also, in response to a comment about not looking forward to the new academic year, the third professor wrote: “Wonder if they sell body armor for use under regalia.” The employee reported the posts to the university. It found them “interpretable as racial references” but also found that it appeared they “were not intended to be racist or threatening at the level of a hate crime but were instead a poor attempt at showing dissatisfaction and mistrust” of university administrators and the selection process. All three professors were reprimanded; the wife entered an agreement under which she resigned. In January 2011, the employee emailed HR that: “I think the time has come for me to leave NSU. This seems to be an unsafe place for American Indians.” He did not resign, though he did resign as department chair. The following summer he emailed HR regarding more Facebook posts by the former assistant chair and his wife, though he did not provide proof of the posts.

 

In the fall of 2012, the employee submitted his application for tenure. The department chair sent it to the tenure committee, which consisted of seven people, including the two remaining professors who had made the racist Facebook posts. Both voted to deny tenure; the final vote was a 3/3 split. The department chair forwarded the vote to the dean, along with a letter summarizing what he thought were the employee’s strengths and weaknesses. The chair did not write in favor or against the application. The dean denied the application, explaining in an affidavit that the employee had “polarized the Department and displayed hostility toward other faculty and staff.” He claimed he was aware of conflicts but was “unaware of the specifics regarding the Facebook postings.” He also stated that he was aware of a “false accusation” by the employee in an email stating the employee had “reason to believe” the department chair had not forwarded his tenure application. The university provost and the president reviewed and concurred in the denial of tenure. The employee appealed to HR but not to the grievance committee. Thereafter the university’s threat assessment team put him on paid administrative leave for the remainder of his contract.

 

Denying summary judgment on the discrimination and retaliation claims against the university, the court found the denial of his tenure and termination were adverse actions. It also found a causal connection considering professors who made racist Facebook remarks about him participated in the tenure vote. Moreover, the dean showed possible animus when he copied the department chair in a reply to the employee’s private message about the chair. And notwithstanding the lapse in time, it was “more than plausible and rather likely that after two years [the two professors] still held some animosity against [the employee] for his reporting their Facebook posts, which resulted in their reprimands and possibly the resignation of [one professor’s] wife.” The court also denied summary judgment on the race-based HWE claim. The Facebook posts were evidence of hostility that remained prevalent in the department. Then two of the professors who made posts voted against the employee’s tenure application. While the university’s initial action of reprimanding the two professors was reasonable, it did not take appropriate steps to end any remaining hostility and allowed the two professors to participate in the vote. Whether the remaining hostility was racially or otherwise motivated was a jury question.

 

The employee also asserted Sec. 1981 race discrimination claims against the two professors who made the Facebook comments and later participated in his tenure vote, and against the department chair, dean, provost, and president. The defendants argued that they were entitled to qualified immunity but the court disagreed. He submitted ample evidence raising questions of fact on whether his clearly established constitutional rights were violated. The court also pointed out that, having done so, he had only to satisfy the same formula and elements applied in to Title VII discrimination claims and he did so for the same reasons discussed with respect to his discrimination claim against the university. Summary judgment was therefore denied on his Sec. 1981 claims as well. The court granted the motion with respect to the employee’s claim that the university violated Article 2, section 2 of the Oklahoma Constitution, which grants the right to “the enjoyment of the gains of [his] own industry.” Although he was denied tenure at the university, he was not prevented from following his chosen occupation elsewhere. His negligence and breach of contract claims against the university also failed as a matter of law because he did not first present his claim to the state and thus did not satisfy the procedural requirements of Oklahoma’s Governmental Tort Claims Act.

 

EEOC Issues New Pregnancy Discrimination Guidelines

As of July 14 2014, the Equal Employment Opportunity Commission (EEOC) has issued a new guidance on pregnancy discrimination, updating and replacing its previous longstanding guidance. With this new guidance the EEOC hopes to address the longstanding uncertainty revolving around the interaction between the Pregnancy Discrimination Act (PDA) and the Americans with Disabilities Act (ADA). However, the EEOC’s decision to replace its 1983 guidance, comes as the Supreme Court prepares to hear Young v. UPS. Here the Supreme Court has been asked to determine what accommodations, if any, the PDA requires from employers. So there is a potential that the EEOC’s new guidelines may be made moot, depending on the Court’s ruling.

Pending the ruling in Young, the EEOC’s new guidance covers the best ways that employers can avoid unlawful discrimination against pregnant employees.  The new guidance includes equal access to benefits such as light duty, leave, and health care. Also the new guidance sets forth reasonable break times for nursing mothers. The EEOC also stated that employers may be in violation of VII by providing health insurance plans that exclude coverage for prescription contraceptives. However, given the recent ruling in Hobby Lobby, the EEOC will need to clarify its position to stay within the bounds of the Court’s ruling in Hobby Lobby.  

Pennsylvania Federal Court Awards Life Insurance Beneficiaries Relief in Form of Equitable Surcharge

A federal judge awarded the beneficiaries of a deceased life insurance participant $120,000 in equitable surcharge after finding that the plan administrator breached its duties by misrepresenting coverage. See Weaver Bros. Ins. Assocs., Inc. v. Braunstein, 2014 BL 160149, E.D. Pa., No. 2:11-cv-05407-JHS, 6/10/14). According to the United States District Court for the Eastern District of Pennsylvania, U.S. Supreme Court's ruling in CIGNA Corp. v. Amara, 131 S.Ct. 1866 (2011), empowers courts to award monetary relief under the Employee Retirement Income Security Act's equitable remedies provision. The opinion was issued June 10 by Judge Joel H. Slomsky.

By way of background, following Deborah Braunstein was an employee of Weaver Bros. After her death in January 2011, Weaver Bros. and its claims administrator, Fortis Benefits Insurance Co., denied life insurance benefits to Deborah's beneficiaries under her life insurance policy with Weaver Bros. on the grounds that her policy lapsed in October 2010, one year after her cancer diagnosis caused her to take disability leave. Weaver Bros. sought a judicial declaration that it wasn't obligated to inform Braunstein of the policy lapse or the need to convert to individual coverage. Braunstein's beneficiaries counterclaimed for fiduciary breach and sought equitable surcharge to cover the loss of life insurance benefits. In March 2013, the court determined that Weaver Bros. was an ERISA fiduciary and that it breached its duties by failing to provide Braunstein with an adequate summary plan description. One year later, the court held a non-jury trial on the remaining claims.

 

In addition to providing an inadequate SPD, the court said that Weaver Bros. made material misrepresentations to Braunstein about the status of her benefits during her period of disability.

Specifically, the court said that the human resources manager for Weaver Bros., Sandra Colangelo, told Braunstein that she would be treated as an active employee even though Colangelo hadn't read the plan's certificate of insurance or SPD. Colangelo also failed to inform Braunstein of the conversion requirement when she sent her beneficiary designation forms to update, the court said.

Further, the court said that evidence in the record demonstrated that Braunstein relied on these misrepresentations to her detriment, because she would have converted her policy to individual coverage had she known about the lapse. The court also rejected the argument of Weaver Bros. that it had no affirmative duty to inform Braunstein about the need to convert her policy. “Because Colangelo knew that Braunstein had cancer and that she sought Colangelo's assurance that her paperwork was sufficient, Colangelo had an affirmative duty to at least read the SPD and Certificate of Insurance and give Braunstein proper advice on which she could rely,” the court concluded. Weaver Bros.' argument that it didn't intentionally deceive Braunstein also failed to sway the court, which found that evidence of intentional deception wasn't required to establish a fiduciary breach based on a plan administrator's material misrepresentations.

 

Weaver Bros. also argued that it couldn't be liable for Colangelo's oral misrepresentations, because they contradicted the written terms of the plan. The company pointed to decisions of Second and Seventh circuit holding that participants bringing misrepresentation claims must point to written statements containing the alleged misrepresentations. Noting that the Third Circuit hadn't “specifically addressed this precise question,” the court nevertheless declined to follow the reasoning of the Second and Seventh circuits. According to the court, Third Circuit precedent makes clear that ERISA forbids fiduciaries from materially misleading participants, and such precedent “does not exclude oral misrepresentations from ERISA's reach.”Further, the court said that even if it followed the Second and Seventh circuits' reasoning, Weaver Bros. still wouldn't prevail, because Colangelo “confirmed her misrepresentations” in a letter to Fortis.

 

Finally, the court found that the beneficiaries' claim for surcharge to cover the lost life insurance benefits qualified as appropriate equitable relief under ERISA Section 502(a)(3). The court said that the Supreme Court's Amara ruling empowered it to “award monetary compensation analogous to the historical relief of ‘surcharge' to the Braunstein Beneficiaries for Weaver Bros.' breach of fiduciary duty.” Given this, the court awarded the beneficiaries surcharge totaling $120,000, along with prejudgment interest.

 

The beneficiaries were represented by James C. Bailey, Michael A. Tilghman II and Jason H. Ehrenberg of Bailey & Ehrenberg PLLC, Washington.

b&e Obtains Victory After Bench Trial In ERISA Case

Firm partner James Bailey obtained a victory on behalf of Firm clients in an ERISA fiduciary breach case in the United States District Court for the Eastern District of Pennsylvania.  After a bench trial before Judge Joel Slomsky, the Court found in favor of b&e's clients on all dispositive legal issues, namely, that the employer was acting as an ERISA fiduciary, that the Summary Plan Description at issue was inadequate,  and that the employer made material misrepresentations to a former employee concerning her employee benefits.  

The Proliferation of Noncompetition Agreements

Interesting article on the expansion of noncompetition agreements/clauses in today's New York Times. Whereas noncompetes used to be geared mostly towards positions in the technology and related sectors (which positions were highly paid and highly skilled), we are starting to see more and more businesses in other, unrelated areas use them as a tool to keep employees and/or keep departing employees from competing. The Times article notes that non-competes have made their way into jobs such as summer camp counselors and hair stylists. There are policy arguments both for and against noncompetes. Traditionally, the argument was that an employer should be allowed to keep an employee who has been trained and paid well by the employer from competing for a reasonable period of time after the employment relationship ends (based on the notion that the employer spent time and money educating and training the employee). However, noncompetes have made their way into lower-paying, less-skilled positions. It is somewhat difficult to articulate a reasonable basis for such agreements where significant time and expense has not been put into training. The article can be found at http://www.nytimes.com/2014/06/09/business/noncompete-clauses-increasingly-pop-up-in-array-of-jobs.html?ref=us&_r=0.

Texas University’s Race Admissions Policy Is Debated Before 5th Circuit Court of Appeals

Interesting article in today's NY Times about the Fisher case the Supreme Court heard a while back. The Fifth Circuit just held oral argument. http://www.nytimes.com/2013/11/14/us/texas-universitys-race-admissions-policy-is-debated-before-a-federal-court.html?ref=us