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Anne M. Radolinski

Anne M. Radolinski Employment & Labor

aradolinski@fredlaw.com
612.492.7104
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U.S. Supreme Court Weighs In on Employment Law Developments

By: ANNE M. RADOLINSKI

September 2009

Employers and their attorneys have been hard-pressed to keep up with rapid changes and developments in employment law in 2009. The U.S. Supreme Court has, for its part, issued a number of important decisions in 2009 that will affect the administration and direction of discrimination challenges and lawsuits. The decisions are discussed below.

Reverse Discrimination Claims are Alive and Well


The Supreme Court in its most recent employment decision, Ricci v. DeStafano, gave new life to reverse discrimination claims, leaving employers in a catch-22 when it comes to hiring and promotion practices. In Ricci, the City of New Haven, Connecticut used written examinations to identify firefighters for promotion. White candidates outperformed minority candidates on the test such that nonwhite candidates could establish a prima facie case of adverse impact discrimination. After a public debate and threats of lawsuits from both white and minority candidates, the City threw out the results of the tests due to the racial disparity of the results. White and Hispanic firefighters who had performed well on the tests pursued race discrimination claims under Title VII.

The Supreme Court characterized the City’s actions in throwing out the results of the tests and failing to promote the candidates who were successful on the tests as “intentional discrimination.” The Court determined that before an employer can engage in intentional discrimination for the purposes of avoiding or remedying an unintentional disparate impact (in this case, the racial disparity caused by the written tests), the employer must have a “strong basis in evidence to believe it will be subject to disparate-impact liability.”

Unfortunately, the Ricci decision provides sparse guidance and no real answers for employers about what to do in these circumstances. The employer who evaluates the results of written tests or other hiring and promotion practices and determines that there is a disparate impact (for instance, on a minority group) is in a quandary. If the employer relies on the results of the tests or practices, it risks litigation from the unsuccessful minority group members. If the employer disregards the results of the tests or practices, it risks litigation from the successful nonminority individuals under the principles of Ricci.

The Ricci decision underscores the importance of seeking legal advice in relation to tests, screening procedures, and other practices used in hiring and promotion, as well as termination or reduction-in-force decisions. Ricci is likely to result in increased litigation and legal challenges to tests and other screening procedures and practices from traditional minority groups as well as reverse discrimination claims from unsuccessful white and other candidates.

Higher Threshold for Proof of Age Discrimination Claims


The Supreme Court issued a decision in June, Gross v. FBL Financial Services, Inc., which raises the bar for proof of a disparate-treatment age discrimination claim. The Court held that a plaintiff who pursues a disparate treatment claim under the federal Age Discrimination in Employment Act must prove, by a preponderance of the evidence, that he/she would not have suffered adverse action (demotion, termination, etc.) but for his/her age. This proof standard is higher than the “mixed motive” proof standard allowed under Title VII for claims of sex, race, national origin, or religious discrimination. Under Title VII, plaintiffs need only show that sex, race, national origin, or religion was “a motivating factor” in the employer’s decision and the burden of persuasion then shifts to the employer to show that it would have taken the action regardless of age.

The plaintiff, Gross, who had been with the company for more than 30 years, was demoted and many of his job responsibilities were reassigned to a younger employee whom he had previously supervised. At trial, Gross presented evidence that his reassignment was based at least in part on his age. The employer defended its decision on grounds that the reassignment was part of a corporate restructuring and that Gross’s skills were better suited to the new position. The judge instructed the jury that it must return a verdict for Gross if it determined that his age was a motivating factor in the decision, and that his age would qualify as a “motivating factor” if age played a role in the decision to demote Gross. The jury returned a verdict in favor of Gross and FBL challenged the instruction on appeal. The Supreme Court reversed and remanded the case for proceedings consistent with its opinion.

Participation in Internal Harassment Investigation


In Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, the Supreme Court determined that an employee who provided information regarding discriminatory practices, not on her own initiative but in response to questioning during an internal investigation, was protected from retaliation under Title VII. The Metropolitan Government of Nashville and Davidson County (Metro) conducted an investigation of rumors that an employee relations director had engaged in sexual harassment. Crawford, who had not made any complaint of harassment, was questioned in connection with the investigation. When asked whether she had witnessed inappropriate behavior on the part of the employee relations director, Crawford provided multiple examples of inappropriate behavior that had been directed at Crawford. Shortly after the investigation was concluded, Crawford and two other employees who had reported harassing behavior were fired. The employee relations director was not disciplined or terminated. Metro maintained that Crawford was fired for embezzlement. Crawford claimed that Metro terminated her because of her disclosures during the sexual harassment investigation and she sued under Title VII. The district court and the court of appeals would have narrowed the protection against retaliation, for instance, to individuals who instigate an internal complaint of harassment or individuals who participate in an investigation prompted by a charge pending before the Equal Employment Opportunity Commission. The Supreme Court, however, found broader retaliation protection.

Pregnancy Discrimination and Pension Benefit Accrual


The Supreme Court ruled that an employer did not violate the Pregnancy Discrimination Act (PDA) when it paid pension benefits calculated in part under an accrual rule that gave less retirement credit for pregnancy leave than for other medical leave, when the accrual rule applied only to the period before the passage of the PDA and was otherwise based on the terms of a “bona fide seniority system.” AT&T Corp. v. Hulteen. The PDA clarified that treating pregnancy-related conditions less favorably than other medical conditions constitutes unlawful sex discrimination. The case was brought by a group of women who took pregnancy leave between 1968 and 1976 and who were later not given full service credit for pension and other benefits for their pre-PDA pregnancy leaves. The Ninth Circuit had ruled that the practice violated Title VII, rejecting arguments that the women’s claims failed because the claims were not brought within the limitations period that began when the system was adopted. The Ninth Circuit determined that liability may be imposed for the employer’s pre-PDA policy because the policy was perpetuated in post-PDA employment decisions. The Supreme Court reversed, reasoning that the PDA prohibitions could not be applied retroactively in this manner. In so doing, the Court declined to apply the principles of the recent Lilly Ledbetter Act which provides in part that the statute of limitations begins to run, for purposes of federal discrimination claims, each time that wages, benefits or other compensation is paid, even if the original discriminatory decision occurred outside the statute of limitations.

Mandatory Arbitration of Discrimination Claims


In 14 Penn Plaza LLC v. Pyett, the Supreme Court determined that a provision in a collective bargaining agreement that clearly required union members to submit discrimination claims to arbitration was enforceable.

Takeaway


Just as we anticipate more changes in the employment law from Congress under the new administration, we anticipate that the Supreme Court will be active in this area as cases under existing laws, amendments, and new laws reach the highest court. We will continue to keep you informed of developments and are pleased to assist with your employment-related questions or issues.