In a partial victory for employers, the California Supreme Court ruled in Harris v. City of Santa Monica that even when an employee proves that a discriminatory motive was a “substantial factor” in an adverse employment decision, the employee is not entitled to damages, reinstatement, or backpay, if the employer can show that the same employment decision would have resulted from non-discriminatory factors at the time. However, the Court also held that employees under these circumstances may still be entitled to reasonable attorneys’ fees, as well as declaratory or injunctive relief requiring employers to halt discriminatory practices.
In Harris, the plaintiff, a bus driver, sued the City of Santa Monica for sex discrimination after she disclosed her pregnancy to her supervisor and was later terminated. The City maintained that Harris had been terminated for poor performance.
At trial, the jury was instructed to find the City liable if Harris showed that her pregnancy was a “motivating factor/reason for the discharge.” The jury found in Harris’ favor, awarding $177,905 in damages. The trial court also awarded Harris $401,187 in attorneys’ fees. The Court of Appeal overturned the verdict, finding that the jury should have been instructed that if both legitimate and discriminatory factors had led to Harris’ termination, the City should not have been held liable if the legitimate motive alone would have led to the termination.
The Supreme Court partially affirmed the Court of Appeal’s ruling by holding that even if an employee shows that discrimination was a “substantial” factor, rather than just a “motivating” factor, in an adverse employment decision, under the “mixed motive” theory the employee may not recover damages, backpay, or reinstatement where the same adverse decision would have resulted absent any discrimination. However, elaborating on the legislature’s intent to deter and punish workplace discrimination through the Fair Employment and Housing Act, the Court explained that an employer may still be held liable under these circumstances. Specifically, employees, who prove they have been subject to an adverse employment action in which discrimination was a “substantial” motivating factor, can obtain a court ruling that an employer’s discriminatory acts are unlawful and/or must be stopped. The employee can also recover reasonable attorneys’ fees and costs.
Significantly, the Harris decision clarifies the “mixed motive” defense standard and remedies available to employees in “mixed motive” situations. Stay tuned for further updates as we continue to track this evolving issue. A copy of the Harris opinion can be found here.
Amendments to California’s pregnancy disability regulations proposed by the California Fair Employment and Housing Commission have been formally approved by the Office of Administrative Law. The amendments, which go into effect on December 30, 2012, apply to all California employers with more than five employees. The amendments include a change in how the “four month” duration of pregnancy disability leave is calculated, a broader definition of “disability,” protection of employees or applicants who are “perceived” to be pregnant, and clarification of employer obligations to accommodate pregnancy disability.
Attorneys at Nossaman LLP are preparing a detailed analysis of the impact of these regulatory changes, and will present their analysis at the firm’s upcoming annual legal updates in February 2013. In the meantime, if you have any questions, please do not hesitate to contact us.
In Flores v. Lamps Plus, Inc., the Court of Appeal affirmed the trial court’s denial of plaintiff’s motion for class certification based on Lamps Plus’s alleged failure to ensure that employees took their meal and rest breaks. Relying on Brinker, the Court held that “the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer. obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay.”
The Court relied on the following facts in deciding that Lamps Plus had satisfied its obligation to provide meal and rest breaks: (1) Lamps Plus had a meal and rest break policy that complied with all legal requirements; (2) employees were disciplined for failing to comply with the policy; and (3) the named plaintiffs signed declarations stating that their supervisors had never told them they couldn’t take a meal or rest break. Given that Lamps Plus had compliant meal and rest break policies, the fact that employees had taken short breaks or did not take a break did not support class treatment and the claims would have to be evaluated on an individual basis.
This case illustrates how important it is to ensure your meal and rest break policies are legally compliant, implemented and enforced.
As part of its current campaign to take more aggressive positions regarding policies applicable to nonunion workers, the National Labor Relations Board recently ruled that a human resources consultant’s routine practice of asking employees involved in employment-related investigations not to discuss them with co-workers ran afoul of the National Labor Relations Act (NLRA). The majority held that the employer’s concern with protecting the integrity of its investigations was not enough to outweigh the potential effect on employees’ Section 7 rights.
Section 7 of the NLRA gives employees the right to “form, join, or assist” unions, to bargain collectively with their employers, and to “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” (or to refrain from engaging in such activities). Although less than 7% of private sector employees are represented by unions, the NLRA’s protections extend to nonunion employees as well as union-represented employees. Further, Section 8(a)(1) of the NLRA makes it unlawful for employers to “interfere with, restrain, or coerce employees” regarding their Section 7 rights.
In investigating workplace matters (i.e., alleged harassment, discrimination, retaliation, or other potentially unlawful activity), employers typically request that employees maintain the confidentiality of the investigation. Now, employers will have to justify why confidentiality is warranted for each investigation by showing it has a legitimate business need for it that outweighs the employees’ Section 7 rights. Notably, the NLRB’s admonition is not absolute. An employer may be justified if: a witness needs protection; evidence is at risk of being destroyed; testimony is in danger of being fabricated; or there is a need to prevent a cover-up.
Employers should review any company policies and employment agreements to make sure they are free of any broad confidentiality policies the NLRB could find violative of Section 7 of the NLRB. Notwithstanding, employers should address how they can justify insisting upon confidentiality in connection with investigations into particularly sensitive complaints, such as those of sexual harassment, discrimination, or fraud. To avoid running afoul of Section 7 of the NLRA, employers should work with counsel in analyzing each investigation individually to determine the level of confidentiality required.
Click here for a copy of the NLRB decision in Banner Health System d/b/a Banner Estrella Medical Center (PDF).
Joan M. Cotkin, a Nossaman partner specializing in insurance coverage issues, has been selected by the Society for Human Resource Management (SHRM) to present, “Employment Practices Insurance: Acquiring and Using EPLI To Reduce or Eliminate Exposure To Claims.” Joan will be making this presentation at SHRM’s Annual Conference & Exhibition in Atlanta, GA on Tuesday, June 26, 2012. Joan’s session will provide important guidance on negotiating favorable insurance provisions and properly addressing working claims when they arise. Understanding and having appropriate insurance in place, including employment practices coverage, is essential to effectively conducting business in California. Nossaman’s Employment and Insurance Coverage Practice Groups are well-suited to help clients navigate these issues.
On June 20, 2011, the United States Supreme Court decided the landmark case of Wal-Mart Stores Inc. v. Dukes which significantly impacted enforcing anti-discrimination laws (as well as other laws) by way of class actions.
One year later, both Al Franken, D-Minn., and U.S. Rep. Rosa DeLauro, D-Conn., introduced the Equal Employment Opportunity Restoration Act.
If enacted, the House version of the bill, (a corresponding bill has been introduced in the Senate) which seeks to “restore the effective use of group actions” for claims related to the Civil Rights Act, the Americans with Disabilities Act and other anti-discrimination statutes, will repeal the Dukes ruling requiring workers to demonstrate company-wide discrimination policies at the class certification stage, thus liberalizing the standards under which individuals may pursue relief on behalf of a group in discrimination lawsuits.
Specifically, the Equal Employment Opportunity Restoration Act would:
- provide an alternative mechanism for workers to join together to enforce their rights to a discrimination-free workplace;
- clarify that workers can challenge the unfettered discretion of supervisors in their subjective decision-making to the same extent as other employment practices;
- ensure that an employers’ written nondiscrimination policies are only relevant in determining if a group action can move forward when the policies have been consistently and effectively implemented; and
- restore courts’ discretion to determine the correct method for assessing how victims of discrimination should be made whole.
Stay tuned……………we will be tracking.
Employers who have arbitration agreements may be able to convert putative wage and hour class actions into individual arbitrations, reducing their potential exposure from millions (or hundreds of millions) to thousands of dollars. In 2010, the Supreme Court held in Stolt–Nielsen S.A. v. Animal Feeds Int’l Corp. that if the parties to an arbitration agreement did not explicitly agree to arbitrate their disputes on a classwide basis, a court could not compel classwide arbitration. The Supreme Court followed up that decision with a 2011 decision in AT&T Mobility v. Concepcion (2011) overruling a California Supreme Court decision holding that class waivers in a consumer arbitration agreement were unconscionable. These decisions have paved the way for employers to argue that their arbitration agreements with employees, even if they do not contain explicit waivers of class litigation/arbitration, may compel employees to arbitrate their wage and hour (and other employment-based) claims on an individual basis rather than in class litigation or arbitration.
Relying on these Supreme Court decisions, in Lopez v. ACE Cash Express, Inc.*, Nossaman employment attorneys Veronica Gray and Bradley Schwan recently obtained a successful ruling on behalf of a client in a California District Court compelling the plaintiff in a putative wage and hour class action to individual arbitration instead. This is a significant decision for employers in that it means the difference between a costly, complex, and risky class action and a relatively inexpensive, straightforward, and manageable arbitration.
Now is the time to review your arbitration agreements for enforceability or consider implementing an arbitration agreement if one is not already in place.
*Reprinted from Westlaw with permission of Thomson Reuters. If you wish to check the currency of this case by using KeyCite on Westlaw, you may do so by visiting www.westlaw.com.
The National Labor Relations Board (“NLRB”) Office of the General Counsel has now released a third report addressing social media issues. We previously discussed the first two reports, which primarily addressed employee terminations triggered by social media use. The Operations Management Memo focuses on cases addressing employer social media policies and provides several examples of broadly worded policy provisions determined to be unlawful because they “could be interpreted” to restrict employees’ Section 7 rights to engage in concerted activity and discuss the terms and conditions of their employment. By way of example, policies that broadly preclude employees from posting or discussing any type of “confidential” information on social media sites are overbroad unless defined not to preclude employees from engaging in Section 7 rights protected by the NLRA.
On the heels of Brinker, the California Supreme Court ruled on April 30, 2012, in Kirby v. Immoos Fire Protection, Inc., that parties prevailing on a claim that Labor Code section 226.7 was violated are not entitled to attorney’s fees. Section 226.7, subdivision (a) prohibits employers from requiring employees to work during Industrial Welfare Commission (Wage Order) mandated rest or meal breaks. Subsection (b) provides the remedy – the employer must pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest break is not provided.
This is a good decision for employers as it could have a deterrent effect on plaintiffs’ counsel, who now know they can not recover their fees even if successful in a section 226.7 action for allegedly missed meal or rest breaks. Click here to read more.
In a landmark decision on April 23, the Equal Employment Opportunity Commission (EEOC) issued a ruling concluding that “intentional discrimination against a transgender individual because that person is transgender is, by definition, discrimination ‘based on…sex’ and such discrimination…violates Title VII.” The EEOC found that discrimination against a transgender individual because that person is transgender is, by definition, discrimination based on sex, and that such conduct therefore runs afoul of Title VII. The EEOC’s ruling applies to both public and private employers alike.
Although no federal court has held that Title VII’s anti-discrimination provisions apply to transgender people, the practical effect of the EEOC’s ruling is transgender people are now protected by federal law and have legal recourse if they are denied a job or fired because they are transgender.
In California, the Gender Nondiscrimination Bill of 2003 (which went into effect in 2004) prohibits discrimination against transgender employees and job applicants. The bill amended the Fair Employment and Housing Act to specifically include transgender people. Thus, California employers should have already taken measures to ensure against transgender discrimination, in addition to other types of discrimination.
However, California is only one of fifteen other states which prohibit employment discrimination based on gender identity.
Read the entire ruling here.