Articles Posted in Employment Discrimination

Last week, the New York City Council passed the Stop Credit Discrimination in Employment Act, which amends the New York City Human Rights Law to prohibit employment discrimination on the basis of an individual’s consumer credit history.

The law defines “consumer credit history” as “any information bearing on an individual’s credit worthiness, credit standing, or credit capacity, including but not limited to an individual’s credit score, credit account and other consumer account balance, and payment history.”

Specifically, the law prohibits an employer, labor organization, employment agency or licensing agency from (1) requesting a consumer credit history for employment purposes, (2) using it for employment purposes, or (3) retaliating or otherwise discriminating, against an applicant or employee with respect to employment decisions, including hiring, firing, promotion, and terms, conditions or privileges of employment, based upon information contained in the consumer credit history.

On March 25, 2015, the United States Supreme Court issued its awaited decision in Young_v._UPS_(12-1226), in which the Court set forth the standard to be used in analyzing sex discrimination cases involving an employer’s failure to provide pregnant employees with work accommodations.  Although the  Court did not rule that employers are required to provide reasonable accommodations to pregnant employees per se, the effect of its analysis compels that accommodations be considered and provided.

The case involves a driver for UPS, Peggy Young, whose physician restricted her from lifting more than 20 pounds for the first 20 weeks of her pregnancy, and then 10 pounds for the remainder of her pregnancy.  UPS policies required that employees be able to lift 70 pounds alone, and up to 150 pounds with assistance.  As a result, UPS did not permit Young to work during her pregnancy, and she ultimately lost her medical coverage.  UPS’s policy did, however, provide accommodations to employees who could not meet the lifting requirements, but only where workers  (i) were injured on the job; (ii) had a “disability” under the Americans with Disabilities Act (ADA); and (iii) lost Department of Transportation certifications.  According to UPS, because Young was not included within one of these three categories, UPS did not discriminate against her.  Young argued that UPS  discriminated against pregnant employees because it maintained light duty policies for the three categories of employees, but not for workers who were pregnant.  Consequently, she argued, UPS violated the Pregnancy Discrimination Act of 1978 (PDA), which extended the prohibitions of sex discrimination contained in Title VII of the Civil Rights Act of 1964 to discrimination on the basis of pregnancy.

The Supreme Court rejected both Young’s and UPS’s interpretation of the PDA as they related to the issue of pregnancy accommodations.   According to the Court, the law permits “an employer to implement policies that are not intended to harm members of a protected class, even if their implementation sometimes harms those members, as long as the employer has a legitimate nondiscriminatory, nonpretextual reason for doing so.”  As a result of this principle of employment discrimination analysis, a pregnant worker can establish a prima facie case by showing that she belongs to the protected class, sought an accommodation, that the employer failed to accommodate her, and the employer accommodated others “similar in their ability or inability to work.”  If the employee is able to meet this burden, then the employer must come forward with some evidence of a legitimate nondiscriminatory reason for not granting the accommodation to the pregnant worker.  Although under the traditional analysis, the employee would only be able to rebut the nondiscriminatory reason by showing that it was not the real reason motivating the employer’s refusal to accommodate, the Supreme Court appears to have taken a slightly different approach.  According to the Court, the employee would be permitted to a jury trial if she could produce sufficient evidence that the employer’s policy places a “significant burden on pregnant workers,” and the employer’s legitimate nondiscriminatory reasons are not strong enough to “justify the burden.”  Under such circumstances, with due consideration given to the burden imposed, an inference of intentional discrimination could arise.  Thus, an employee might be able to prove pregnancy discrimination where she could show that the employer accommodates a large percentage of nonpregnant workers, while refusing to accommodate a large percentage of pregnant workers.

Last month, we wrote that the Equal Employment Opportunity Commission (EEOC) had challenged an employer wellness program that was implemented by Orion Energy Systems.  In that case, the EEOC alleged that the employer had violated the Americans with Disabilities Act (ADA) by requiring employees to submit to medical examinations that were not job related or consistent with business necessity.  Several days ago, the EEOC challenged Flambeau, Inc.’s wellness program as violating the ADA’s prohibition against mandatory medical examinations.  According to the EEOC the wellness program required that employees submit to biometric testing and a health risk assessment.  The consequences for failing to agree to these exams were, among other things, the possible cancellation of medical insurance coverage and other potential disciplinary action.

The EEOC alleged in this lawsuit, EEOC v. Flambeau, Inc., Civil Action No. 3:13-cv-00638, which was filed in United States District Court for the Western District of Wisconsin,  that when an employee, Dale Arnold, failed to complete the biometric testing and health risk assessment, the employer cancelled his health insurance coverage.  Although the EEOC does not disapprove of wellness programs, it asserts that the programs must be voluntary in all respects.  Otherwise, they constitute a disability-related inquiry and must, therefore, be related to the job in question and consistent with business necessity.

Flambeau disagreed with the EEOC’s characterization of its program and claimed that it had “adopted a health program that allowed employees to assess their health status and participate in programs to improve their health if they so chose.”  Yet, the fact that employees faced repercussions for refusing to undergo the testing in the first place renders the legality of the program questionable under the ADA. The inquiry, and not participating in any health programs proposed as a result of the inquiry, is what may have violated the ADA.

In recent years, employers have implemented health and fitness measures intended to curb the effects of chronic disease on their employees.  The implementation of these “wellness” programs generally results in lower health insurance premium costs, and a healthier workforce.  Nevertheless, the Equal Employment Opportunity Commission (EEOC) has challenged one of these programs as violating the Americans with Disabilities Act (ADA).

The EEOC has taken the position that although employers are permitted to implement wellness programs, employers cannot mandate that employees participate.  In EEOC v. Orion Energy Systems, No. 1:14-cv-0109 (E.D. Wis.), an employee objected to participating in the employer’s wellness program, because, among other things, she was concerned about the confidentiality of medical information.

Following the employee’s refusal to participate in the program, the employer required that she pay the full premium cost of her health insurance, plus a $50 monthly penalty.  Ultimately, she was terminated, and  has claimed that her termination was based upon her opposition to the wellness program.

Governor Cuomo has signed legislation extending coverage of the New York State Human Rights Law (“NYSHRL”) to unpaid interns.  In March 2014, we wrote about the New York City Council’s decision to amend the New York City Human Rights Law to extend its coverage to unpaid interns.  Now, interns in all of  New York will have the same protections from unlawful discrimination and harassment as paid employees. The NYSHRL prohibits discrimination in employment on the basis of age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, and domestic violence victim status.  The amended NYSHRL includes a new section 296-c, which, among other things, defines an “intern” to mean

a person who performs work for an employer for the purpose of training under the following circumstances:

a. the employer is not committed to hire the person performing the work at the conclusion of the training period;

Earlier this month, the Equal Employment Opportunity Commission (EEOC) issued new Enforcement Guidance applicable to the Pregnancy Discrimination Act (PDA) and the Americans with Disabilities Act (ADA), concerning pregnancy-related conditions.  Pregnancy discrimination implicates both the PDA and ADA as well as other federal and New York statutes.

The PDA was enacted in 1978 to clarify that discrimination based upon pregnancy, childbirth or related medical conditions constitutes sex discrimination, in violation of Title VII of the Civil Rights Act of 1964 (Title VII).  Generally, under the PDA, employers are required to treat women affected by pregnancy, childbirth, or related conditions the same as other applicants or employees with respects to all aspects of employment.

The ADA does not consider pregnancy to be a disability, although pregnant employees may have impairments related to their pregnancies that qualify as disabilities under the ADA.  Following 2008 amendments to the ADA, it is much easier for an employee to demonstrate that an impairment rises to the level of a statutory disability.  Thus, under the ADA, reasonable accommodations must be given to employees who suffer from a pregnancy-related disability.

Yesterday, the New York City Council voted unanimously to extend the protections of the New York City Human Rights Law to unpaid interns.  Now, interns will be protected from unlawful discrimination and harassment, like paid employees.

The amendment defines an “intern” covered by the statute as “an individual who performs work for an employer on a temporary basis whose work: (a) provides training or supplements training given in an educational environment such that the employability of the individual performing the work may be enhanced; (b) provides experience for the benefit of the individual performing the work; and (c) is performed under the close supervision of existing staff.”

The amendment will go into effect 60 days after it is signed by the mayor.

No law requires employers to offer employees severance pay upon termination.  Where an employer has a severance pay plan, however, the obligation to pay severance is triggered upon a qualifying event as defined by the plan, policy or contract at issue.  In most cases, employers will only pay severance in exchange for a general release of employment discrimination claims.  Last week, in Henry v. Federal Reserve Bank of Atlanta 12-cv-1282 (M.D. Tenn., March 17, 2014), however, a judge ordered the employer to show cause why its attempts to obtain a waiver of claims that would have prevented the employee from recovering under Title VII in exchange for severance pay was not a per se act of retaliation.

The circumstances in Henry involved an employee who complained that he was being discriminated against on the basis of religious discrimination.  The employee filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) on May 18, 2011.  On May 31, 2011, the employee received a notice that he was being terminated, effective July 31, 2011, which was the date the facility in which he worked would permanently close.  Apparently, the decision to terminate the employee had been made in January 2011.  Based on these facts, it would appear that the employer did not retaliate against the employee for filing an EEOC charge because the decision was made prior to his filing the charge.  However, the terms of his separation were problematic to the court.  According to the severance package the employee was offered, he was required to “waive [his] right to recover monetary or other damages” stemming from his Title VII claim.

Ultimately, the court was unable to substantiate the employee’s claim of religious discrimination.  The court, however, denied the employee’s motion to dismiss the retaliation claim, and further ordered the employer to show cause why its severance offer, which was contingent upon the waiver of claims, should not be deemed per se retaliatory.  The court reasoned that although it would not find every waiver in exchange for severance to constitute retaliation, in this case it appeared that the employee would have been entitled to the severance under the employer’s plan without the need to execute a release, and that the only reason the employer sought the release  was because of the employee’s claim of discrimination.  According to the court, the severance pay under the plan was “part and parcel of the employment relationship,” and by conditioning the employee’s entitlement to severance on the execution of a waiver, the employer basically deprived the employee of a benefit he would have gotten without the need to execute the waiver.  Simply stated, the plan entitled the employee to the severance regardless of whether he signed the release.  By requiring him to execute a waiver for those very benefits, it appears that the employee may have suffered retaliation.

Prior to filing a claim of discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with Disabilities Act (“ADA”), or the Age Discrimination in Employment Act, a claimant is required to file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”).  Title VII and the ADA require that a claimant not file a complaint in court for at least 180 days after filing the charge in order for the EEOC to conduct an investigation.  It was unsettled, however, whether the statute of limitations on other tort claims arising out of the same circumstances as the discrimination was tolled or continued to run.  The Second Circuit, which covers New York, Connecticut and Vermont, has now joined the Seventh and Ninth Circuit in holding that the statute of limitations is not tolled.

In Castagna v. Bill Luceno, et ano., U.S. Court of Appeals for the Second Circuit (13-0796), March 5, 2014, the Second Circuit held that the an EEOC filing “does not toll the limitations period for state law tort claims, even for those claims that arise out of the same factual circumstances as the discrimination alleged in the EEOC charge.”  The plaintiffs argued that requiring a plaintiff to commence a civil action for a tort based upon the same facts alleged in an EEOC charge would constitute judicial inefficiency because the federal discrimination claims could not be brought in that action at the same time.  The Second Circuit stated that a plaintiff in that situation could ask the court to stay proceedings until the EEOC completed its investigation and processing of the charge, at which time the discrimination claim could then be asserted in the lawsuit.

The Second Circuit’s decision is important to keep in mind because New York  law imposes a one year statute of limitations on most intentional torts.  If the plaintiff wants to preserve the right to assert the tort, it is likely that a lawsuit will need to be filed even while the charge is still with the EEOC.

 

When providing a departing employees with severance pay, most employers require that the employee sign a separation or severance agreement, which, among other things, contains a general release of claims.  The payment of severance is given in exchange for the employee’s agreement not to raise any claims against the employer.  The Equal Employment Opportunity Commission (“EEOC”) does not have a problem with this type of exchange; otherwise, cases could never settle.  The EEOC does, however, take issue with provisions that have become standard in most separation agreements.  Earlier this month the EEOC filed an action in an Illinois federal court against CVS Pharmacy, Inc., alleging that CVS’s severance agreements violate Title VII of the Civil Rights Act of 1964, as amended, because they constitute a “pattern or practice of resistance to the full enjoyment of any rights secured by Title VII.”  The EEOC believes that these provisions violate the retaliation protections contained in Title VII.

According to the Complaint filed in EEOC v. CVS Pharmacy, Inc., certain provisions of the form severance agreement at issue prohibit employees from filing charges of discrimination, and interfere with an employee’s right to participate and cooperate with investigations conducted by the EEOC and state fair employment practices agencies.  The alleged offending provisions included a non-disparagement clause, a confidentiality provision, a cooperation provision that requires the releasee to notify CVS if they are compelled to provide information about the company, and an agreement not to sue.

As most attorneys who practice in the area of employment discrimination law are aware, the clauses challenged by the EEOC are contained in virtually every separation/severance agreement.  If the EEOC prevails, employers may have to give up some of the guarantees  and assurances that they have taken for granted.  Although some argue that prohibiting these types of provisions will make employers less likely to pay severance or settle claims of discrimination, the concern is overstated.  Employers will likely continue to pay severance in exchange for general releases because at the very least they will have secured an agreement that the particular claim at issue will not come back, or continue, to haunt them.

 

 

Contact Information