Employment law pop quiz #11

Can a co-worker's single racial slur result in employer liability?

"Yes," according to yesterday's California Supreme Court decision in Bailey v. San Francisco District Attorney's Office (California 07/29/2024) [PDF].

I am unaware of any other court decision, and the California court did not cite one, that holds that a single use of the N-word by a co-worker can be severe enough to create a hostile environment for which the employer can be responsible.

An African-American employee claimed that a co-worker – on a single occasion – called her the N-word.

The court rejected a lower court's conclusion that a one-time slur from a co-worker – rather than a supervisor – cannot be actionable under California law.

To determine whether this incident was severe enough as to alter the conditions of employment and create a hostile work environment, a court must take into account the totality of the circumstance. Only one circumstance – a “significant factor” in assessing the severity of harassing conduct – is the status of the speaker.

This employee alleged that she and the co-worker shared an office and job duties. She also said that the co-worker was friends with an HR person and that the co-worker's actions against two other African-American women caused them to be reassigned or to separate from the employer.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

California drops prejudice requirement for arbitration waivers

California no longer requires a party seeking to avoid arbitration to prove they were prejudiced.

The California Supreme Court on Thursday abrogated a rule that had been followed for decades. Quach v. California Commerce Club (California 07/25/2024) [PDF]

This case was brought under the California Arbitration Act, so that statute now lines up with how the Federal Arbitration Act treats waivers.

In 2022 the US Supreme Court decided Morgan v. Sundance, Inc., which announced that prejudice is not part of waiver analysis under the Federal Arbitration Act. The California court adopted the reasoning in the Morgan case. The so-called "policy favoring arbitration” is about putting arbitration agreements on equal footing with other contracts, not about favoring arbitration with arbitration-specific preferential rules.

In the Quach case, a former employee sued his former employer, alleging various employment law claims. Then the employer waited for 13 months before moving to compel arbitration.

During those 13 months the employer actively pursued discovery, requested a jury trial, posted jury fees, left the check box for indicating it was “willing to participate” in arbitration blank, and represented that the only motion it intended to file was a “dispositive motion.” This constituted a waiver of the right to arbitrate.

Employment law pop quiz #10

Can I be fired for my Facebook posts?
Most likely, yes.

The legal landscape is littered with appellate court decisions upholding employers' right to fire employees for posting offensive material on Facebook.

First, consider whether a 1st amendment free speech issue is involved. This is easy. The 1st amendment applies only to the government (federal, state, local). So if the employer is a private company, there simply is no 1st amendment protection for the employee.

When the government is the employer, the employee might get some protection if the posting deals with "a matter of public concern." This is something more than a personal "gripe," and is pretty easy for the employee to demonstrate.

Then the court is going to go through what is called the Pickering balancing test, named after the 1968 US Supreme Court case Pickering v. Board of Education. As the Court put it, "The problem in any case is to arrive at a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees."

Just this week the 7th Circuit decided Hicks v. Illinois Department of Corrections [PDF], upholding the suspension of a corrections sergeant who posted Islamophobic and offensive material on Facebook. The court had no trouble showing how this was in opposition to the goals of his employer and resulted in an adverse news article.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #9

What's the most frequent charge at the EEOC?

Retaliation.
57% of all EEOC filings.

Disability - 36%
Race - 34%
Sex - 31%
Age 17%
(This adds to more than 100% because one filing can contain multiple items.)

But wait!
This needs to be put into context.
(Nerdy perhaps, yet necessary.)

Retaliation overlaps all the other categories.

Retaliation – all by itself – is not a violation of Title VII.

It must be retaliation for opposing an unlawful act.

And that unlawful act has to be tied to race, sex, age, religion, etc.

Therefore, a retaliation claim always involves race, sex, age, religion, etc.

So when you see or hear "retaliation," just ask "Retaliation because of what?"

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #8

Is an employee's refusal to take DEI training a protected activity?

I think not. A recent 7th Circuit decision explains why. Vavra v. Honeywell (7th Cir 07/10/2024) [PDF].

Honeywell required its employees to complete online unconscious bias training. This was around 20 to 30 minutes long and entailed watching videos of different scenarios with a quiz at the end.

Charles Vavra refused. He never clicked the link to access the training. In spite of many reminders and his superiors urging him to take the training, he maintained his refusal.

Honeywell eventually fired Vavra for refusing to take the training.

Vavra sued under Title VII and the Illinois Human Rights Act claiming that firing him was in retaliation for engaging in protected conduct – opposing an action that violated the law. His point was that the training would vilify white people and treat people differently based on their race.

The court pointed out that in order to state a claim of retaliation Vavra needed to have an objectively reasonable belief that the training violated the law. However – because Vavra never took the training – he had no direct knowledge of its contents. Indeed, his supervisor told him that it was not racist and featured a white victim of unconscious bias.

So, in the end, the 7th Circuit affirmed summary judgment in favor of Honeywell because Vavra lacked an objectively reasonable belief that the training was unlawful. As the court put it, "An employee must have some knowledge of the conduct he is opposing for his belief to be objectively reasonable."

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #7

Is the US Supreme Court pro-employer? Or pro-employee?

 Neither one, in my opinion. The Justices don't wake up in the morning thinking "How can I help employers?" Or "How can I help employees?"

What they do is interpret Congress's statutes the way Congress wrote them.

 Recent examples: 

 > Murray v. UBS Securities (9-0) [PDF] – A Sarbanes-Oxley Act whistleblower must prove that their protected activity was a contributing factor in the employer’s unfavorable personnel action, but need not prove that the employer acted with “retaliatory intent.”

> Muldrow v. City of St. Louis (9-0) [PDF] – An employee challenging a job transfer under Title VII must show that the transfer brought about some harm with respect to an identifiable term or condition of employment, but that harm need not be "significant" or "serious" or "substantial" or any similar adjective.

> Bissonnette v. LePage Bakeries (9-0) [PDF] – A transportation worker need not work in the transportation industry to be exempt from coverage under Section 1 of the Federal Arbitration Act.

> Smith v. Spizzirri (9-0) [PDF] – Section 3 of the Federal Arbitration Act requires district courts to stay a lawsuit pending arbitration; no discretion to dismiss the case.

> Starbucks v. McKinney (9-0) [PDF] – Courts must evaluate the NLRB's requests for injunctions under Section 10(j) of the National Labor Relations Act using the traditional four-factor test for preliminary injunctions, not some other more lenient standard.

> Harrow v. Department of Defense (9-0) [PDF] – The 60-day deadline for a federal employee to petition the U.S. Court of Appeals for the Federal Circuit to review a final decision of the Merit Systems Protection Board is not jurisdictional.

 Your results may vary. If you have any of these issues, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Are college athletes "employees"?

Here's the latest on whether college athletes are "employees."

A federal Circuit Court just weighed in on whether they can establish employee status under the Fair Labor Standards Act (FLSA). Johnson v. NCAA (3rd Cir 07/11/2024) [PDF].

As the court put it, the issue is "whether college athletes, by nature of their so-called amateur status, are precluded from ever bringing an FLSA claim. Our answer to this question is no."

The athletes want to get at least minimum wage for the time they spent representing their schools, so they sued the NCAA and several member schools. The defendants are saying the athletes are amateurs, not employees, so not covered by the FLSA.

The trial court ruled that the athletes are employees.

The 3rd Circuit didn't exactly disagree with that conclusion, but did disagree with the way the trial court reached that conclusion. So the case now goes back to the trial court to do a makeover.

In a 65 page decision the 3rd Circuit said that whether college athletes are employees is based on "an economic realities analysis grounded in common-law agency principles."

The court said, "We therefore hold that college athletes may be employees under the FLSA when they (a) perform services for another party, (b) necessarily and primarily for the other party's benefit, (c) under that party's control or right of control, and (d) in return for express or implied compensation or in-kind benefits." (cleaned up.)

Meanwhile, an NLRB Regional Director determined that the players on a men’s college basketball team at Dartmouth are employees of the college. The Board itself has not ruled on this case.

Employment law pop quiz #6

Is it illegal to bully an employee?
It is not, unless the bullying is because of race, sex, religion, disability, or other statutory protected characteristic.

Let's use sex as an example. If an employer bullies an employee because of his or her sex, then that can violate Title VII (and similar state laws).

The reason is that this is a form of sex discrimination. It is not because the bullying – by itself – is illegal.

For example, let's look at Montgomery v. ExchangeBase (Ohio Ct App 07/03/2024) https://www.supremecourt.ohio.gov/rod/docs/pdf/8/2024/2024-Ohio-2585.pdf

Miranda Montgomery alleged a long list of what she referred to as bullying by the employer's president and others. No doubt this was unpleasant for her. The problem for her was that she was unable to connect the important dots. She couldn't show that this offensive behavior was BECAUSE of her sex. The offensive behavior by itself was not enough.

In spite of what I've said above, it's possible that OSHA could conclude that some forms of bullying create a hazardous work environment.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #5

Do egg retrieval and freezing procedures qualify as a pregnancy-related medical condition or disability?

"No" according to the California Court of Appeal. Paleny v. Fireplace Products (Cal App 06/27/2024) https://www.courts.ca.gov/opinions/documents/C097584.PDF

Erika Paleny was undergoing oocyte (egg) retrieval procedures to both donate and freeze eggs for herself for potential use at some unknown time in the future. She said her supervisor didn't like that, and fired her when she said she would need time off for an appointment related to her procedures. So Paleny sued, claiming violations of California's Fair Employment and Housing Act. She claimed she was harassed and discriminated against (1) due to a disability and (2) due to a medical condition related to pregnancy.

Paleny lost on her disability claim because she was not pregnant, and was not disabled by pregnancy. She clearly was not pregnant. She also was not “disabled by pregnancy” because she was not unable to work or to perform any essential functions of her job.

Paleny was not suffering from a medical condition related to pregnancy. The definition of “related medical condition” does not include medical procedures that may tend toward future pregnancies.

The court didn't let Paleny piggyback onto the federal Pregnancy Discrimination Act (PDA). Although some courts recognize infertility as a condition protected under the PDA, Paleny wasn't being treated for infertility. There was no evidence that Paleny was undergoing the egg retrieval procedure because she was experiencing infertility or some other medical condition that necessitated the procedure in order for her to become pregnant. Her reason for extracting her eggs at that time was for donation and to store some for possible future use because the eggs were at their peak quality.

What Paleny really needed was a more sympathetic supervisor.

P.S. The "donation" paid $8,000.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #4

Can Amazon's "last mile" delivery drivers avoid arbitration?

They're exempt from FAA-required arbitration.
But what about state statutes that require arbitration agreements to be enforced?

The Federal Arbitration Act (FAA) requires courts to enforce arbitration agreements, but there is an exception for "seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

These "last mile" delivery drivers are engaged in interstate commerce because they carry packages that crossed state lines, even though they themselves did not cross state lines. So the FAA won't force them to arbitrate, even if they agreed to.
(Not so for your local pizza delivery driver.)

A few cases:
> Mathis v. Kerr (Oklahoma 06/25/2024) https://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=496528
> Waithaka v. Amazon.com, 966 F.3d 10 (1st Cir 2020)
> Rittman v. Amazon.com, 971 F.3d 904 (9th Cir 2020)

I think state arbitration statutes can still be used to enforce arbitration agreements that the FAA won't enforce.

In each of the above cases the court would have used a state-law arbitration statute, but did not due to unique circumstances.

> Mathis: State trial courts have exclusive jurisdiction over workers compensation retaliation claims.
> Waithaka: Arbitration agreement unenforceable because it prohibited proceeding on a class basis.
> Rittman: Arbitration agreement provided that it had to be governed by the FAA.

 Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #3

An employee was on paid administrative leave during an investigation. Does the time spent on paid administrative leave count toward the 1,250 "hours of service" to qualify for Family Medical Leave Act leave?

My answer is "No."

This is based on a recent arbitration opinion of mine.

While on paid leave, the employee was paid regular wages, was required to carry an employer-provided phone, was required to call in twice a day, and – Monday through Friday, 8:00-4:00 – had to be able to respond physically to the employer within two hours. The employee was not required to stay at home, and was free to come and go 24 hours a day and seven days a week.

The FMLA does not define "hours of service," but instead refers to the Fair Labor Standards Act. A FLSA regulation says, "Periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked."

But the real meat lies in two US Supreme Court cases from 1944 – Armour & Co v. Wantock, 323 US 126 (1944) and Skidmore v. Swift & Co, 323 US 134 (1944). Both cases involved private firefighters who were paid for a regular shift during the day, and then had to stay on site to respond to alarms. The Court held that eating and sleeping time does not count, but the other time does.

These cases are famous for (1) distinguishing between whether the employees were "engaged to wait" or "waiting to be engaged," and (2) the need to examine whether time is spent predominantly for the employer's benefit or for the employee's.

Some of this is echoed in a FLSA regulation ("Periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked.") and in a Department of Labor fact sheet ("Generally, the facts may show that the employee was engaged to wait (which is work time) or the facts may show that the employee was waiting to be engaged (which is not work time).")

In my case the employee was waiting to be engaged, and could (24/7) spend the time any way the employee wished. Thus, the hours did not count.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #2:

To prove that a forced transfer violates Title VII, must the employee prove she suffered "significant" harm? Or is "some" harm enough?

The US Supreme Court unanimously says "some" harm is enough. It need not be "significant," or "serious," or "substantial," or "any similar adjective." Muldrow v. City of St. Louis (US Supreme Court 04/17/2024): https://www.supremecourt.gov/opinions/23pdf/22-193_q86b.pdf

This is important because many lower courts have required an enhanced showing of harm.

Examples:

> An engineering technician is assigned to work at a new job site—specifically, a 14-by-22- foot wind tunnel.
> A shipping worker is required to take a position involving only nighttime work.
> A school principal is forced into a non-school-based administrative role supervising fewer employees.

The Supreme Court case involved a police officer who was moved from a plainclothes job in a prestigious specialized division giving her substantial responsibility over priority investigations and frequent opportunity to work with police commanders. She was moved to a uniformed job supervising one district’s patrol officers, in which she was less involved in high-visibility matters and primarily performed administrative work. Her schedule became less regular, often requiring her to work weekends; and she lost her take-home car.

As the Court put it, this changed the what, where, and when of her police work.

You can be sure this will result in an uptick in the number of Title VII cases that go to a jury.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz

Can a wage-earning hotel manager be an "employer" subject to individual liability under the Fair Labor Standards Act (FLSA)?

Are you surprised that the answer is "Yes"?

A hotel's front desk clerk sued the hotel and the manager, claiming he wasn't paid the minimum wage under FLSA. The manager pushed back, saying he was not an "employer" under the FLSA, but the 11th Circuit held that he was an employer. Spears v. Bay Inn & Suites (11th Cir 06/20/2024): https://media.ca11.uscourts.gov/opinions/pub/files/202213376.pdf

The manager argued that he cannot be an employer under the FLSA because he is a wage-earning employee and not an owner of the limited liability company that owned the hotels where the clerk worked. But the court noted that the manager is involved in the day-to-day operations of the company: he lives at one of the properties and supervised the clerk's daily job activities, and he testified that he oversaw things "day-to-day." He gave the clerk tasks and set the clerk's work schedule. He had control over the company’s finances in a way that other company employees did not. He was the only employee other than his father who could sign paychecks.

Thus, the manager is an "employer," defined as "any person acting directly or indirectly in the interest of an employer in relation to an employee."

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

SCOTUS clips NLRB's wings

The US Supreme Court has clipped the NLRB's wings when it comes to seeking preliminary injunctions under NLRA §10(j). Starbucks v. McKinney (US S. Ct. 06/13/2024) [PDF].

The NLRB started its normal administrative process to determine whether Starbucks committed an unfair labor practice. The NLRB claimed that Starbucks unlawfully discharged multiple employees who had invited a news crew from a local television station to visit the store after hours to promote their unionizing effort.

The Board's regional director also brought suit in federal district court seeking a preliminary injunction for the duration of the administrative proceedings that would, among other things, require Starbucks to reinstate the fired employees.

The district court granted the injunction, the 6th Circuit affirmed, but the Supreme Court unanimously reversed.

The district court applied a two-part test that asks (1) whether “there is reasonable cause to believe that unfair labor practices have occurred,” and (2) whether injunctive relief is “just and proper.”

The Supreme Court ruled that the NLRB must satisfy the traditional four-part test: (1) that it is likely to succeed on the merits, (2) that it is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in its favor, and (4) that an injunction is in the public interest.

A lesson from the Supreme Court

Sometimes a seemingly minor Supreme Court decision contains important messages. So it is with Smith v. Spizzirri (US S Ct 05/15/2024). Unanimous opinion: https://www.supremecourt.gov/opinions/23pdf/22-1218_5357.pdf

 The question was whether a trial court has the option to dismiss a case pending arbitration rather than issuing a stay of the proceedings. The answer is "No." When a lawsuit involves an arbitrable dispute, Federal Arbitration Act §3 requires a court to stay the proceeding upon request. The Supreme Court says (spoiler alert) that this means a stay – not a dismissal.

 Important statutory interpretation principles were involved – statutory text, structure, and purpose. These typically guide the Court in all statutory cases.

 Text: Section 3 uses the words "shall" and "stay." That's the plain text. The Court said, "When §3 says that a court 'shall . . . stay' the proceeding, the court must do so." Oh, yes, and Black's 1920 Dictionary says "stay" means a “temporary suspension” of legal proceedings, not a termination of the proceedings. This allows parties to return to court if the arbitration breaks down.

 Structure and purpose: FAA §16 authorizes an immediate interlocutory appeal when a court denies a request for arbitration, but an order compelling arbitration is not immediately appealable. If a court dismisses a case, that triggers the right to an immediate appeal where Congress sought to forbid such an appeal. Also, keeping the case on the court's docket makes good sense in the event there is a need to enforce a subpoena or to confirm an award.