1 At-Will Employment

Employment Practices and

Loss Prevention Handbook
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 1 At-Will Employment

By:
Paul J. Siegel, Esq. Noel P. Tripp, Esq.
Jackson Lewis LLP Jackson Lewis LLP
Melville, New York 11747 Melville, New York 11747
Phone: (631) 247-4605 Phone: (631) 247-4636
Email: siegelp@jacksonlewis.com Email: trippn@jacksonlewis.com

This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an
attorney/client relationship between Jackson Lewis LLP and any reader or recipient. Since these materials and related
discussions are informational and educational in nature and represent the author’s own views, attendees should
consult with counsel before taking any actions and should not consider these materials or discussions thereabout
to be legal or other advice. Professional advice should be obtained before attempting to address any legal situation
or problem. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis LLP.
Jackson Lewis LLP represents management exclusively in workplace law and related litigation.
The information presented in this publication is intended to provide guidance and is not intended as a legal interpretation
of any federal, state or local laws, rules or regulations applicable to your business. The loss prevention information
is provided is intended only to assist policyholders in the management of potential loss producing situations involving
their premises and/or operations based on generally accepted safe practices. In providing such information Great
American does not warrant that all potential hazards or conditions have been evaluated or can be controlled. It is
not intended as an offer to write insurance for such conditions or exposures. The liability of Great American and its
affiliated insurers is limited to the terms, limits and conditions of the insurance policies underwritten by it.

This Material Has Been Prepared By

Jackson Lewis LLP
Copyright 2009© By Jackson Lewis LLP

GreatAmericanELD.com
Table of Contents
1 At-Will Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Who Is Terminable At-Will? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Judicial Erosion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Statutory Erosion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2 Federal Law of Discrimination and Harassment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Title VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Age (The ADEA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Equal Pay Act (EPA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Family and Medical Leave Act (FMLA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Americans with Disabilities Act (ADA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Types of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3 Disability and Medical Leave Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

What Does the FMLA Require? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Leave Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Developing Policies Which Properly Differentiate Between
Leaves of Absence and Monetary Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
General Principles Regarding Medical Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

4 Wage and Hour Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

5 Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

6 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Appendix: Recent Developments in Employment Law . . . . . . . . . . . . . . . . . . . . . . 34

Today, at-will employment is

the baseline legal rule in every

American state except Montana.

1 At-Will Employment

The traditional American common law rule is that
an employee without a contract for a definite term
or an explicit protection against discharge can
be discharged for good cause, no cause, or even a
morally wrong cause. Today, at-will employment
is the baseline legal rule in every American state
except Montana, which in 1987 enacted the Wrongful
Discharge from Employment Act. In the other forty-
nine states, modern application of the at-will rule has
been tempered by the gradual encroachment, over the
last fifty years or so, of federal and state employment
statutes, and also by state common law contract and
tort doctrines. Erosion of the at-will doctrine occurs
on a state-by-state, piecemeal basis. When planning
a discharge, employers should consider the current
state of the law in the applicable jurisdiction.
Who Is Terminable At-Will?
In New York, for example, unless an employer and employee
agree that their relationship is for a definite term, the law
presumes that the relationship is at-will. As in other states, an
employee is not considered terminable at-will if the employer
has made an express or implied promise that employment will
continue for a fixed duration or for a period of time that may
be reasonably determined. In addition, the general rule is that
an employee who remains after expiration of a contract for a
definite term at a stated annual salary may remain protected
pursuant to an implied agreement. However, courts will not
recognize this type of automatic contract renewal where an
employer and employee have explicitly agreed that the contract
will expire at a set time absent additional negotiations for a new
agreement, and the parties fail to negotiate a renewal. In such
a case, an employee who remains after expiration of a definite
contractual term will be employed at-will.
Judicial Erosion
The at-will rule has come under consistent criticism in recent
years. Present day economic relations between employer and
1 At-Will Employment
employee do not justify the harshness of the rule, according to
some commentators, who point out that freedom of contract
does not exist between parties of grossly unequal bargaining
power. It is unlikely that there ever was equality of bargaining
power. To address that perceived unfairness, courts and
legislatures in most states have responded to a call for protection
from arbitrary discharge for workers by carving out a variety of
exceptions to the at-will doctrine.
Collectively Bargained Agreements
If the employee is subject to a collectively bargained labor
agreement, the employer’s right to discharge will be governed
by that agreement, which is negotiated between the employer
and the union. Such an agreement governs the employment of
all covered employees. Collective bargaining agreements usually
contain provisions requiring that employees can be dismissed
solely for “just cause”, which means the employer must have a
valid reason to dismiss an employee. Usually, these agreements
also prescribe disciplinary measures of a lesser severity that an
employer must implement before terminating the employee.
The National Labor Relations Act (“NLRA”) also has provisions
that protect organized activity. Section 7 of the NLRA gives
employees the right to join and form unions, and to bargain
collectively, while Sec. 8(a)(1) makes it an offense for an employer
to restrict an employee’s Sec. 7 rights. Such restrictions often
include terminating employees for engaging in organized activity.
Sec. 8(a)(3) of the NLRA makes it an unfair labor practice for
an employer “by discrimination in regard to hire or tenure
of employment… to… discourage membership in any labor
organization.” Sec. 8(a)(4) also makes it an unfair labor practice
for an employee to be discharged if he or she has filed charges or
given testimony against the employer. Employees in labor unions
generally have more tools for redress than employees who lack
such representation.
Individual Employment Contracts
Breach of Contract Claims
As a matter of course, in the absence of good cause, an employer
cannot terminate an employment contract with a fixed term
before the term expires because such a termination would
constitute breach of contract. Even if an employment contract
is not for a fixed term, the parties may expressly limit the
employer’s right to terminate the employment contract for either
just cause or a specified reason. Discharge for any other reason
would constitute breach of contract. The express limitation on
the employer’s right to terminate has been found to exist in a
7
 1 At-Will Employment

written contract, in an employment manual, and sometimes in

an oral statement.

Implied Contracts
Most workers do not have individual employment contracts and
are not members of unions. Nevertheless, they may be protected
from discharge by implied contractual limitations arising from
employee handbooks, company policies, offer letters, and oral
promises of discharge for good cause. In most states, implied
limitations carry the same weight as fully-negotiated, written
employment contracts and can restrict the employer’s right to
discharge the employee. To assert a contract claim, an at-will
employee must demonstrate that he or she was made aware of
a written policy that expressly limits the right of discharge, and
the employee detrimentally relied on that policy in accepting
employment. To prove detrimental reliance upon an employer’s
policy statements, an employee must show he or she was
induced to leave a prior place of employment or declined other
employment offers. Some states, like New Jersey, require neither
detrimental reliance nor notice of the protective policy.

Public Policy Violations

In more and more states, it is no longer permissible for employers
to discharge at-will employees for “bad” cause that is, for an
unlawful reason or for a purpose that contravenes public policy.
Forty-two U.S. states and the District of Columbia recognize
public policy as an exception to the at-will rule. Under the
public policy exception, an employer may not fire an employee
if it would violate the state’s public policy or the public policy
set forth in a state or federal statute. If the discharge of an
employee undermines public policy, the injured employee has a
claim that the discharge was “wrongful.” States that recognize
a public-policy exception to employment at-will usually require
a demonstration that the plaintiff was discharged for exercising
a clearly established statutory right or performing a clearly
established statutory duty (or refusing to engage in conduct
violative of a statute intended to protect the public). Even if such
statutes do not explicitly create a cause of action for wrongful
or abusive discharge, courts have recognized such causes of
action as necessary to carry out the intention of the legislature.
A claim for wrongful discharge in violation of public policy arises
in either tort or contract or both, depending on the state where
the case is filed.

New York and a minority of courts generally shy away from any
regulation of employer action that requires them to define public
policy, reasoning that such decisions are best made by the state

8

legislature. A public policy exception to the employment-at-will
presumption will not be recognized unless there is a violation of
a constitutional right or statutory proscription by the employer.
In essence, the tort of wrongful discharge is not available to
at-will employees. To protect the public from specific types of
harm, though, New York’s whistleblower law provides a limited
cause of action to employees who were discharged for disclosing,
threatening to disclose, or refusing to participate in activity
by an employer that violates a law, rule, or regulation if that
violation gives rise to “a substantial and specific danger to the
public health or safety.” The statute’s protection only applies if
the unlawful conduct or policy is brought to the attention of the
employer by the employee, and the employer has a reasonable
opportunity to remedy the problem. In order to sustain an
unlawful retaliation claim, an employee must show an actual
violation; the employee’s reasonable belief that the law was
violated is insufficient.
Statutory Erosion
Identifying Who is Terminable At-Will
If an employment relationship is for a definite term, that is, if
it is not at-will, the employment will cease upon expiration of
the term. Neither the employer nor the employee can lawfully
terminate the contract prior to that time without justification,
unless the employment agreement otherwise provides. An
unlawful termination constitutes a breach of contract for which
the breaching party will be liable for damages. Under New York
law, when there is an express contract of employment for a
definite term, an employee cannot be terminated before the
expiration date unless the employer has ‘‘just cause.’’ The just
cause standard applies in the non-at-will setting even if the
contract provides for termination ‘‘for any reason.’’ As a result,
courts have required good cause to terminate an employee when
the contract stated that the employee could be terminated for
an ‘‘unforeseen sick condition, circumstance, administrative
decision, Act of God or any other reason.’’ However, by contract
the parties may agree to termination at the judgment of the
employer for business reasons.
Erosion of Employment At-Will by Statute
As stated, the erosion of the employment-at-will rule began
with exceptions being created for certain classes of employees.
For instance, employees represented by trade unions and civil
servants were given protection against arbitrary dismissals.
Later, the protection was afforded to certain members of classes
1 At-Will Employment
historically subjected to discrimination. Today, there are a whole
host of statutory restrictions or exceptions to the employment-
at-will rule. Congress has enacted several statutes that provide
employees with protection against discriminatory termination.
For example, as noted above, the NLRA prohibits the discharge of
employees for union activity, protected concerted activity, filing
charges or giving testimony under the Act. The NLRA was passed
in 1935 and established a federal policy to promote collective
bargaining and to define employee rights in detail. In addition to
prohibiting discharge of employees for unionizing activities, the
NLRA also gave rise to labor unions which negotiated collective
bargaining agreements restricting arbitrary termination of
unionized employees.
The Fair Labor Standards Act (“FLSA”) prohibits discharge of
employees for exercising rights guaranteed by the minimum
wage and overtime provisions of that Act. In general, the FLSA
requires employers to pay time and one half to employees who
work more than 40 hours per week. Certain employees are
exempted from the provisions of the FLSA based upon their
executive, administrative or professional status. Title VII of
the Civil Rights Act of 1964 (“Title VII”) prohibits discharge of
employees based on race, color, religion, sex or national origin.
Title VII also prohibits an employer from retaliating against
an employee for exercising rights under the statute. The Age
Discrimination in Employment Act (“ADEA”) prohibits age based
discharges of employees by private employers and the federal
government and protects employees against retaliation for
exercising statutory rights. The Americans with Disabilities Act
(“ADA”) was enacted in 1990 but was made effective in 1992 for
entities of more than 25 employees. The purpose of that statute
was to provide a clear comprehensive national mandate for the
elimination of discrimination against individuals with disabilities.
The Act prohibits discrimination against employees who have
a physical or mental impairment that substantially limits them
in one or more major life activities and requires employers to
make reasonable accommodations to disabled employees. ERISA
prohibits the discharge of employees in order to prevent vesting
of pension rights and governs how pension plans are to be
administered by private employers.
9
Congress passed Title VII in

1964 prohibiting discrimination

by employers with 15 or more

employees, on the basis of

race, color, religion, sex, or

national origin.

2 Federal Law of Discrimination

and Harassment
 2 Federal Law of DisCrimination and harassment
Title VII
Congress passed Title VII in 1964 prohibiting discrimination
by employers with 15 or more employees, on the basis of race,
color, religion, sex, or national origin. Title VII also prohibits
discrimination because of their association with an individual
in one of the protected categories. Title VII applies to state and
local governments, employment agencies, labor organizations,
and to the federal government.
Although Title VII prohibits discrimination against individuals
who are members of a protected class, there are situations where
an employer is permitted to “differentiate” if the protected trait
is a bona fide occupational qualification (“BFOQ”) reasonably
necessary to the normal operation of the business. An employer
can prove the BFOQ defense by showing that the relationship
between the protected trait and the ability to perform the duties
of the job; the BFOQ relates to the essence of the business; and,
there is no less-restrictive or reasonable alternative. Automobile
Workers v. Johnson Controls, Inc., 499 U.S. 187 (1991). BFOQ’s,
however, have been interpreted very narrowly.
Title VII is enforced by the Equal Employment Opportunity
Commission (EEOC) and state fair employment practices
agencies (FEPAs). While Title VII allows an individual to bring
a private lawsuit, the complaining individual first must file a
complaint with the EEOC within 300 days of learning of the
discrimination. The 300-day filing period is just 180 days in
states lacking equal employment opportunity agencies.
Race
An individual cannot be denied equal employment opportunities
because of race, perceived race, or race-linked characteristics, or
because of marriage or association with someone of a particular
race. This prohibition extends to employment decisions based
on stereotypes and assumptions about individuals of a certain
race and applies regardless of whether the individual is Black,
Asian, Latino, Caucasian, or any other race. Discrimination
based on race is unlawful at the recruiting stage, hiring stage,
and advancement stage.
Not only is intentional discrimination prohibited by Title VII,
but neutral job policies that disproportionately affect persons
of a certain race that are not related to the job and needs of the
business are also prohibited. Title VII also prohibits offensive
conduct, such as racial or ethnic slurs, or other physical or verbal
conduct based on an individual’s race.
The U.S. Supreme Court ruled that the City of New Haven
improperly discriminated on the basis of race when it refused
to certify the results of a promotional test on which white and
Hispanic firefighters outperformed their black colleagues.
Ricci v. DeStefano, Docket Nos. 07-1428 & 08-328 (June 29, 2009).
A 5 - 4 majority of the Court rejected the City’s argument that it
lawfully disregarded the test results to avoid violating Title VII’s
disparate-impact provisions. Writing in behalf of the majority,
Justice Kennedy found, “[R]ace-based action like the City’s in
this case is impermissible under Title VII unless the employer
can demonstrate a strong basis in evidence that, had it not taken
the action, it would have been liable under the disparate-impact
statute.” According to the Court, the City of New Haven did not
demonstrate a “strong basis in evidence” for certain liability and
thus, could not validate the results of its promotional test.
Color
Title VII also prohibits discrimination based on an individual’s
color or skin tone. Personnel decisions cannot be predicated
on a person’s specific race or nationality or the shade of his or
her skin.
Color bias is difficult to categorize and often is viewed as another
form of race discrimination. Discriminatory treatment based on
skin color also may be attributed to ethnic heritage and race. For
this reason, color bias complaints standing alone are seen less
frequently than the more typical race discrimination claims, but
the numbers are increasing.
Proving a case of skin tone discrimination may be difficult since,
like the government, most employers do not maintain data on
employees’ skin color. So, for example, an employee would not
have the statistical evidence to support a claim that a company
was promoting more lighter skinned workers than darker
skinned employees. Also, similar to age and disability factors,
there often is an overlap between protected groups, making proof
of discriminatory treatment based on skin color more difficult
to show.
Sex
Title VII prohibits discrimination based on sex or gender. Sex
or gender discrimination occurs when an adverse employment
action is taken that would not have occurred if the person
was of another sex. Title VII prohibits employment decisions
based on stereotypes and assumptions about individuals based
on their sex. This includes sexual harassment, rate of pay, and
pregnancy based discrimination. To make clear the broad
11
 2 Federal Law of DisCrimination and harassment
scope of this protection, in 1978, Congress amended Title VII to
emphasize that it prohibits discrimination based on pregnancy,
childbirth and related medical conditions. With regard to sexual
orientation, Title VII does not prohibit discrimination against
someone based on sexual orientation; however sex stereotyping,
failure to conform to sexual stereotypes or similar conduct
is prohibited.
Religion
Title VII prohibits discrimination against employees and
applicants on the basis of religion. By its terms, Title VII did not
define religion or address the issue of religious accommodation.
Cases soon reached the courts questioning whether Title
VII merely prohibited discrimination on the basis of religion
or whether it also required employers to affirmatively
accommodate an employee’s religious needs. To clarify this
protection, Congress enacted §701(j) of Title VII, which states,
“[t]he term ‘religion’ includes all aspects of religious observance
and practice, as well as belief, unless an employer demonstrates
that he is unable to reasonably accommodate an employee’s
religious observance or practice without undue hardship on the
conduct of the employer’s business.” The EEOC has interpreted
religious practices to include “moral or ethical beliefs as to what
is right and wrong which are sincerely held with the strength
of traditional religious views.” 29 C.F.R. § 1605.1 (2003). Title VII
does allow for an exception where religion is a BFOQ for the job
in question. 42 U.S.C. § 2000e-2(e)(1).
In applying Title VII to religion, courts must recognize the types
of claims available to other protected categories — disparate
treatment, hostile work environment and retaliation — in
addition to those issues unique to accommodation. Cases which
focus exclusively on the disparate treatment analysis (that is,
where an employee claims that he or she was treated differently
than a co-worker because of religion) without any reference to
reasonable accommodation or undue hardship are rare. For a
plaintiff to establish a prima facie religious accommodation
claim, he or she must establish: (1) a bona fide religious belief
that conflicts with an employment requirement; (2) notice to
the employer of this belief; and (3) an adverse personnel action
for failure to comply with this statutory requirement. Philbrook
v. Ansonia, 757 F.2d 476, 481 (2d Cir. 1985), affirmed on other
grounds, 479 U.S. 60 (1986). If the employee establishes a prima
facie case, the burden then shifts to the employer to show
that it could not accommodate the plaintiff ’s religious needs
without undue hardship. The Supreme Court has not required
an employer to spend any significant amount of money to
12
accommodate an employee because of his or her religious beliefs,
but state or local laws may do so.
Another question which has arisen in the context of Title VII is
whether responding to the religious preferences of a co-worker or
customer is a defense to allegations of discrimination. The EEOC
has instructed that preferences of co-workers provide no defense
to a claimed violation of Title VII. 29 C.F.R. 1604.2(a)(iii) (1999).
National Origin
Title VII prohibits discrimination based on an individual’s
national origin. The Supreme Court has interpreted this
protection to bar discrimination on the basis of ethnicity, the
country where a person was born, his or her accent, or perceived
ethnic background. Espinoza v. Farah Mfg. Co., 414 U.S. 86 (1973).
This prohibition also includes treating someone differently
because of their marriage or association with someone of a
certain nationality. Misconduct, such as ethnic slurs, will satisfy
a claim for harassment. With regard to language, an employer
may not discrimination against an employee because of their
accent, unless the accent materially interferes with their job
performance. Since the ability to communicate in English often
is affected by one’s place of birth, an employer may require
an English-only rule in the workplace, if it is adopted for
nondiscriminatory reasons and is needed to promote the safe
or efficient operation of the business.
Age (The ADEA)
The ADEA prohibits discrimination against individuals age
40 or older working for employers with 20 employees or more.
In Smith v. City of Jackson, 544 U.S. 228 (2005), senior police
officers in Jackson, Mississippi, claimed the city’s pay plan had
a disparate impact on older workers because, under the plan,
newer officers received proportionately bigger salary increases
than more senior officers, who tended to be older. The U.S. Court
of Appeals for the Fifth Circuit had dismissed plaintiffs’ claim,
finding disparate impact claims were “categorically unavailable”
under the ADEA. Id. at 231. The Supreme Court disagreed and,
consistent with the EEOC’s longstanding position, held that the
ADEA encompasses disparate impact claims of discrimination.
Id. at 233-40.
Notably, the Supreme Court also ruled that the scope of disparate
impact liability under the ADEA was narrower than that under
Title VII of the Civil Rights Acts, which prohibits discrimination
based on race, color, religion, gender, and national origin.
 2 Federal Law of DisCrimination and harassment
Pointing to textual differences between the ADEA and Title VII,
the Court held the appropriate standard for determining the
lawfulness of a practice which disproportionately affected older
employees was the “reasonable factors other than age” (RFOA)
test, rather than the business necessity test. Unlike Title VII,
the ADEA permits any “otherwise prohibited” action where the
differentiation is based on reasonable factors other than age.
While plaintiffs failed to establish a claim of age discrimination
due to their inability to identify a specific practice within the
pay plan that had an adverse impact on older employees, the
Court evaluated, as well, whether plaintiffs’ claim would have
failed because the city had articulated a reasonable factor
other than age in support of the pay plan. The Court found
immaterial whether the City could have reached its goal of
employee retention through other measures which would not
have disparately impacted older employees because it was
not required under the RFOA test.
Equal Pay Act (EPA)
In 1963, Congress passed the Equal Pay Act, which prohibits pay
differentials based on sex. Employers may not pay employees
of one sex less than they pay employees of the opposite sex for
work that requires equal skill, effort and responsibility and is
performed under similar working conditions (including working
at the same site). Pay differences based on skill, experience or
other nondiscriminatory reasons are lawful. Congress enacted
the Equal Pay Act to remedy the fact that the wage structure
of “many segments of American industry has been based on an
outmoded belief that a man, because of his role in society, should
be paid more than a woman even though his duties are the
same.” Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974)
(citing S. Rep. No. 176, 88th Cong., 1st Sess., 1 (1963)).
It also protects those employees who are exempt under the FLSA,
namely, administrative, professional, and executive employees.
An employee must show that the different wages paid of the
opposite sex, the employees perform substantially equal work
on jobs that require equal skill and the jobs are performed under
similar working conditions, no intent to discriminate is required.
See EPA § 206(d)(1). The Act also provides four defenses, if an
employer can show that the pay differential “is made pursuant
to (i) a seniority system; (ii) a merit system; (iii) a system which
measures earnings by quantity or quality of production; or (iv) a
differential based on any other factor other than sex.” Id.
Title VII’s prohibition against sex discrimination applies as well
to wage plans. Unlike the Equal Pay Act’s two-year or three-year
limitation period, Title VII has a 350-day filing period. However,
the movement to make the wages of men and women equal in
the workplace gained steam when, on January 29, 2009, President
Barack Obama signed into law the “Lilly Ledbetter Fair Pay Act,
the first piece of legislation signed by the President. The new
law, signed on January 29, 2009, rejects the U.S. Supreme Court’s
decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S.
618 (2007) holding that the charge-filing deadline for Title VII
compensation discrimination claims begins to run on the date
of the first allegedly discriminatory pay decision. This bill
provides that each paycheck issued that is gender-unequal is
a new violation of the law.
Family and Medical Leave Act (FMLA)
The Family and Medical Leave Act requires employers to grant
leaves of up to 12 weeks in any 12-month period due to the
employee’s own serious illness or that of a spouse, child or parent.
Leave also is available to care for a newly-born, adopted or foster
child. To be eligible, the employee must have worked at least
1,250 hours during the prior 12 months; have one year or more
of service; and, be working at a covered site (50 employees or
more). For an extensive discussion, see the section below entitled
“Disability and Medical Leave Compliance.”
Americans with Disabilities Act (ADA)
The Americans with Disabilities Act of 1990 bans discrimination
against disabled persons and requires reasonable accommodation
of their disabilities to assist in the performance of essential job
duties. The ADA only applies to “qualified individuals with a
disability.” A disability means a physical or mental impairment
that substantially limits one or more of an individual’s major life
activities. For the ADA to apply, it is not enough that an employee
has an impairment. Rather, to be covered, the impairment
must substantially limit a major life activity. Generally, the
impairment’s impact must be permanent or long-term. Examples
of impairments include depression, heart disease, asthma,
arthritis, cancer, or a visual or hearing impairment. Examples of
major life activities are: caring for oneself, performing manual
tasks, walking, seeing, hearing, speaking, breathing, learning and,
in some circumstances, working.
Beginning in the late 1990s, the U.S. Supreme Court decided a
series of cases in which it confronted the ADA’s potential broad
13
 2 Federal Law of DisCrimination and harassment
coverage. Fearing that the ADA’s coverage would be much more
expansive than Congress intended, the Supreme Court narrowed
the scope of the ADA’s “disability” definition by seizing on the
ADA’s “findings” that “some 43,000,000 Americans have one or
more physical or mental disabilities” and that individuals with
disabilities are a “discrete and insular minority.” In Toyota Motor
Mfg., Ky. v. Williams, 534 U.S. 184 (2002), the Supreme Court held
that the appellate court did not apply the proper standard in
determining that an employee was disabled under the ADA. The
Court explained that the appellate court analyzed only a limited
class of manual tasks and failed to consider or even ask whether
the employee’s impairments, from carpal tunnel syndrome,
restricted her from performing tasks central to the importance
of one’s daily life. The Court concluded that in order to be
substantially limited in performing major life activities under
the ADA, the individual’s impairment must prevent or severely
restrict the performance of activities central to most people’s
daily lives and the impairment must be permanent or long-term.
In Toyota, fatal to her claim of disability was the fact that Plaintiff
was able to perform a variety of tasks central to most people’s
daily lives, such as brushing her teeth, washing her face, bathing,
tending her flower garden, fixing breakfast, doing laundry, and
picking up around the house. In the Court’s words, “household
chores, bathing, and brushing one’s teeth are among the types of
manual tasks of central importance to people’s daily lives, and
should have been part of the assessment of whether respondent
was substantially limited in performing manual tasks.” Id. at 192.
In addition, the Court noted that “it is insufficient for individuals
attempting to prove disability status under this test to merely
submit evidence of a medical diagnosis of impairment. Instead,
the ADA requires them to offer evidence that the extent of
the limitation caused by their impairment in terms of their
own experience is substantial.” Id. at 198 (citing Albertson’s
Inc. v. Kirkingburg, 527 U.S. 555, 567 (1999)). Furthermore,
the Court went on to explain that “the Act defines ‘disability’
with respect to an individual,” § 12102(2), making it clear that
Congress intended the existence of a disability to be determined
in such a case-by-case manner. Toyota, 534 U.S. at 198, citing
Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999). Therefore,
an individualized assessment of the impairment is necessary,
especially with respect to medical conditions where symptoms
can vary widely from person to person. Toyota, 534 U.S. at 199.
Studies revealed that in the years that followed Toyota,
employers prevailed in more than 90 percent of all ADA cases.
14
The exacting standard articulated in Toyota rendered it difficult
for many Plaintiffs to demonstrate a condition of sufficient
severity and duration to warrant protection under the ADA.
See, e.g. Young v. Westchester County Dep’t of Soc. Servs. & Judy
Hagen, 57 Fed. Appx. 492, 494 (2d Cir. 2003) (symptoms creating
trouble breathing and speaking were “temporary” and thus
did not constitute protected disability under ADA); Collins v.
Prudential Inv. & Ret. Servs., 119 Fed. Appx. 371, 376 (3d Cir. 2005)
(ADHD/ADD symptoms described by Plaintiff were “accurately
characterized as moderate” and district court’s judgment as a
matter of law on ADA claim was upheld).
Disability groups and business organizations, along with
Democrats and Republicans in both the House of Representatives
and the Senate, worked together to forge a compromise bill
to reinvigorate the ADA. Their efforts culminated in the ADA
Amendments Act of 2008. To reverse this trend marginalizing
ADA cases in the federal courts, President George W. Bush
signed into law amendments to the Americans with Disabilities
Act (“ADA”) significantly expanding the protections afforded to
disabled individuals. The new law, entitled the ADA Amendments
Act of 2008 (“ADAAA”), expressly overturns the several landmark
Supreme Court decisions which had narrowly interpreted the
definition of  “disability.” The changes to the ADA took effect
on January 1, 2009. See Jenkins v. Nat’l Bd. of Med. Examiners,
2009 U.S. App. LEXIS 2660 at * 1-2 (6th Cir. 2009) (applying
amendments to ADA case seeking injunctive relief which was
on appeal as of time of amendments, and reversing trial court
decision for consideration in light of amendments).
Section 1981
Section 1981 provides in part that “all persons… shall have the
same right… to make and enforce contracts… as is enjoyed
by white citizens…” 42 U.S.C. § 1981. As modified by Congress
in 1991, Section 1981 prohibits racial discrimination in the
employment relationship, throughout the entire employment
contractual relationship, including termination. The Supreme
Court has defined “race” broadly to include classes of persons
based on their ancestry or ethnic characteristics. St. Francis Coll.
v. Al-Khazraji, 481 U.S. 604 (1987); Shaare Tefila Congregation v.
Cobb, 481 U.S. 615 (1987).
Section 1981 is different than Title VII in that it applies to all
employers regardless of the number of persons employed. Also,
Section 1981 claims can be filed directly in federal court and
a longer, four-year statute of limitation applies. In addition,
 2 Federal Law of DisCrimination and harassment

Section 1981 only prohibits intentional discrimination,

not practices that have a disparate impact. If a plaintiff is
successful in a Section 1981 claim they may receive unlimited
compensatory and punitive damages, where Title VII puts a
cap on damages.

Types of Claims Section 1981 is different than

Disparate Treatment
Disparate treatment claims under Title VII may be proved
Title VII in that it applies to all
by direct evidence or by circumstantial evidence. Since
direct evidence usually is not available, plaintiff may offer
circumstantial evidence. Most commonly offered are statements employers regardless of the number
that are ambiguous, or behavior toward and/or comments
directed at — other employees in the same protected group.
For a plaintiff to establish a prima facie case of discrimination, of persons employed. Also, Section
he or she must show: (i) plaintiff is a member of a protected
class; (ii) the plaintiff applied and was qualified for the job;
(iii) the application was rejected; and (iv) the position remained
1981 claims can be filed directly in
open after the rejection. St. Mary’s Honor Ctr. v. Hicks, 509 U.S.
502, 505-07 (1993). Once this burden of production is satisfied, federal court and a longer, four-year
the employer must articulate a legitimate, nondiscriminatory
reason for its actions. At that point, plaintiff must prove that the
employer’s stated reason is really a pretext for discrimination. statute of limitation applies.
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04 (1973).
If the plaintiff is able to establish a prima facie case then an
inference is created that the employer acted with discriminatory
intent. Tex. Dep’t of Cmty Affairs v. Burdine, 450 U.S. 248,
254 (1981).

If there are so-called “mixed motives” with regard to the adverse

employment decision (some lawful, some unlawful), plaintiff
need only prove that they are a member of a protected class
and that membership in that class was a motivating factor in
the employment decision, not that it was the sole reason. If the
employer is able to prove that there is another reason for its
employment action and it would have made the same decision
without discrimination, the employer may avoid liability for
monetary damages, reinstatement, or promotion. Desert Palace
Inc. v. Costa, 539 U.S. 90 (2003).

Disparate Impact
Disparate impact cases, unlike disparate treatment cases, do not
require proof of disparate treatment or explicit discriminatory
intent. Rather, under a disparate impact theory of discrimination,
an employee may challenge an employer’s policy or practice

15
 2 Federal Law of DisCrimination and harassment

which is neutral on its face but more harshly affects one group
than another in application. To prevail under this theory, a
plaintiff must demonstrate the employer uses a particular
employment practice which causes a “disparate statistical
impact” on the basis of a protected characteristic (e.g., age, race,
color, religion, sex, national origin). Disparate (or adverse) impact
is a substantially different rate of selection in termination or
other employment decisions (such as hiring, promotion, salary
increases) which works to the disadvantage of members of a
protected group.

The two methods typically used to measure adverse impact

are: (1) the 80% (or four-fifths) Rule; and (2) the “two standard
deviation” analysis. Under the 80% Rule, as applied to
negative personnel decisions, such as terminations or layoffs,
discriminatory adverse impact is inferred if members of the more
successful group (e.g., males, non-minorities, etc.) are selected
for promotion at a rate that is more than 20% better than the
rate at which members of the “disadvantaged” class are selected
(e.g., females, minorities, people 40 years of age and older) or
conversely, adverse actions occurred at a 20% greater rate.

The method typically used in disparate impact cases to

determine whether adverse impact under the 80% Rule is
statistically significant is the two-standard deviation analysis.
For statistical adverse impact to be significant and probative,
it must be shown that the result is not merely chance, thus a
standard deviation analysis is used to measure how far from the
norm the result deviates. The greater the standard deviation,
the less likely it is that the actions being reviewed occurred by
chance. Normally, two or more standard deviations will raise
an inference of discrimination.

Harassment/Hostile Work Environment

Title VII protects employees from a “hostile workplace
environment” as part of Title VII’s prohibition against
discrimination. A hostile work environment exists where a
workplace contains “ ‘discriminatory intimidation, ridicule,
and insult’ so severe and pervasive ‘that it alters the conditions
of the victim’s employment and creates an abusive working
environment.’ ” David C. Yamada, The Phenomenon of
“Workplace Bullying” and the Need for Status-Blind Hostile
Work Environment Protection, 88 Geo. L.J. 475, 509-10 (2000)
(quoting Meritor v. Vinson, 477 U.S. 57, 65-67 (1986)). The law
is violated, however, only if the victim is a member of a group
protected under Title VII (i.e., unless a protected characteristic
motivated the harassment, Title VII is not violated). Id. at 515.

16
 2 Federal Law of DisCrimination and harassment

This cause of action is based on the Supreme Court’s holding Since harassment usually does not involve an act authorized by
in 1986 that sexual harassment is a form of sex discrimination. the employer, assigning liability is murky. The Supreme Court
Meritor, 477 U.S. 57. The Supreme Court also held that same- addressed employer liability in the harassment context in the
sex sexual harassment may be prohibited by Title VII if gender off-cited cases of Faragher v. City of Boca Raton, 524 U.S. 775
motivated the harassment (rather than, for example, sexual (1998) and Burlington Industries Inc. v. Ellerth, 524 U.S. 742
preference). To clarify what is unlawful, the Equal Employment (1998), in which the Court sanctioned imposition of liability on
Opportunity Commission issued regulations announcing that the employer when a supervisor engages in sexual misconduct
“Sexual harassment”… is defined as any unwelcome sexual and misuses his or her authority to discharge, demote or
advances or requests for sexual favors or any conduct of a otherwise cause “tangible” job-related harm to an employee. In
sexual nature when: submission to such conduct is made contrast, the Court found that if a supervisor’s sexually harassing
explicitly or implicitly a term or condition of an individual’s misconduct does not cause tangible job-related harm to the
employment; submission to or rejection of such conduct by employee, the employer can avoid liability if it proves, as an
an individual is used as the basis for employment decisions affirmative defense, that it had a program to prevent sexual
affecting such individual; or such conduct has the purpose harassment, including an effective complaint procedure, and
or effect of substantially interfering with an individual’s work the employee unreasonably failed to utilize it.
performance or creating an intimidating, hostile or offensive
working environment. Sexual harassment is typically divided
into two theories or types of harassment: quid pro quo (“this for
that”) and hostile work environment. The elements of a quid
pro quo claim are: an unwelcome sexual overture or conduct;
which the employee rejected (or was forced to consent to and,
the denial of); something that the employee was entitled to
(e.g., job, promotion, increase, transfer) based on the rejection.
The elements of a hostile work environment claim include:
unwelcome harassment of a sexual nature; based upon sex;
which is so pervasive that it alters the conditions of employment;
and, creates an abusive working environment. To establish a
hostile work environment claim economic loss is not necessary.
Examples of conduct that contributes to a hostile work
environment are: sexually explicit graffiti, posters or calendars,
extremely vulgar and offensive sexually-related epithets, abusive
language, posting drawings of sexually explicit behavior and
incidents of indecent exposure by co-workers, requirement of
a lewd or revealing uniform, or any other unwelcome conduct
of a sexual nature.

17
The purpose of the FMLA

is to allow employees to

balance work and family life

by taking reasonable unpaid

leave time for family or

medical-related reasons.

3 Disability and Medical

Leave Compliance

What Does the FMLA Require?
The purpose of the FMLA is to allow employees to balance
work and family life by taking reasonable unpaid leave time for
family or medical-related reasons. The FMLA provides covered
employees with a right to job-protected, but unpaid, leave. An
eligible employee is entitled to up to 12 weeks of leave during
any 12 month period.
Employer Coverage under the FMLA
To be covered, an employer must employ 50 or more employees
for each working day during each of 20 or more calendar weeks
in the current or preceding calendar year. Employees on unpaid
or paid leave, suspension, etc. are included in the head count as
long as there is a reasonable expectation that those employees
will later return to active employment. Part time employees
count as well. If a reduction in the number of employees results
in employer no longer being covered by FMLA, employees
already on FMLA leave still must be afforded leave rights. Public
agencies, and public and private elementary and secondary
schools, are covered regardless of the number of employees.
Eligibility for Leave under the FMLA
To be eligible for FMLA leave a worker must be employed within
any state, the District of Columbia, or any territory or possession
of the United States; must have been employed for at least
12 months (though this need not be continuous employment)
as of the date leave commences, must have been employed
for at least 1,250 hours of service during the 12 month period
immediately preceding the leave; and, must work at a location
where 50 or more employees are employed by the company,
or within a 75-mile radius thereof. Eligibility is determined
when the employee requests leave. Once this criterion is met
and an employee is determined to be eligible, the employee’s
eligibility does not change as a result of changes in the number
of employees employed at or within 75 miles of the work site.
FMLA Retaliation
An employer may not interfere with, restrain or deny any
employee’s exercise of FMLA rights. This includes discouraging
an employee from taking FMLA leave. An employer may not
retaliate or discriminate against any person for opposing or
complaining about potentially unlawful FMLA practices, or
filing an FMLA complaint. Discriminating against prospective
employees who have exercised FMLA rights with other
employers also is prohibited. Furthermore, retaliation or
discrimination against any person who has given information
3 Disability and medical leave compliance
in connection with an inquiry or proceeding relating to FMLA
rights is not permitted.
Varying Types of Leave
FMLA leave is available under varying circumstances, such as
birth, adoption or placement of a child with the employee for
foster care, including time prior to the adoption or placement if
needed for counseling sessions, court appearances, or travel for
adoption purposes. Child-care related leave must be taken and
concluded within one year of the date of the birth, adoption or
placement. Leave also is available if an employee is needed to
care for a family member with a serious health condition, or if
the employee’s own serious health condition makes the employee
unable to perform the functions of his or her job. “Unable to
perform the functions of his or her job” means an inability
to work at all, or an inability to perform any of the essential
functions of the employee’s job.
A “serious health condition” does not include cosmetic
treatments, unless complications arise, and ordinarily does not
include such minor issues as the common cold, the flu, ear aches,
upset stomach, or routine headaches. Rather, a “serious health
condition” means an illness, injury, impairment, or physical or
mental condition that involves: inpatient care (i.e., an overnight
stay) in a hospital or similar facility, including any period of
incapacity (defined as the inability to work, attend school
or perform other regular daily activities), or any subsequent
treatment in connection with such inpatient care; or continuing
treatment by a health care provider; any period of incapacity,
even less than one day, due to pregnancy or for prenatal care.
Any period of incapacity or treatment due to a chronic serious
health condition, for example, asthma, diabetes, epilepsy may
qualify, as would a period of incapacity that is permanent or
long-term due to a condition for which treatment may not be
effective, such as Alzheimer’s, a severe stroke, or the terminal
stages of a disease. The FMLA also provides for leave when there
is an absence to receive multiple treatments for surgery after
an accident or injury, or for a condition that would likely result
in a period of incapacity of more than three calendar days in
the absence of medical intervention or treatment. Examples
of qualifying treatments would include cancer involving
chemotherapy treatment, physical therapy for severe arthritis,
dialysis for kidney disease.
Reduced Schedule
A “reduced schedule leave” reduces an employee’s usual number
of working hours per week or day. This may involve a change
19
 3 Disability and medical leave compliance

from full-time to part-time status. An example of a reduced
schedule is, an employee who is recovering from a serious health
condition and is not healthy enough to work a full-time schedule.
The employee’s physician must certify that there is a medical
need for leave (not merely voluntary treatments or procedures)
that can be best accommodated through a reduced schedule.
Employees requiring a reduced schedule must attempt to
schedule this leave so as not to disrupt the employer’s operations.
An employee taking a reduced schedule may be assigned to an
alternative position with equivalent pay and benefits that if that
alternative position better accommodates the employee and
reduces the impact on the workplace. When leave is taken due
to the birth, adoption or foster care placement of a child, leave
may be taken on a reduced schedule only if the employer agrees,
unless leave is required because the mother or child has a serious
health condition.
Intermittent Leave
Intermittent leave is FMLA leave that can be taken in blocks
of time (rather than continuously) where there is a qualifying
reason. Example qualifying reasons include leave taken on an
intermittent basis for chemotherapy, or leave taken by a pregnant
employee for prenatal examinations or due to morning sickness.
The employee’s physician must certify that there is a medical
need for leave (not merely voluntary treatments or procedures)
that can be best accommodated through intermittent leave.
Employees requiring intermittent leave must attempt to schedule
their leave so as not to disrupt the employer’s operations. An
employee taking intermittent leave may be assigned to an
alternative position with equivalent pay and benefits that better
accommodates the employee’s intermittent leave schedule.
For example, the employee may be transferred to a part-time
position, with the same hourly rate of pay and benefits, provided
the employee is not required to take more leave than is medically
necessary. In connection with this type of leave the employer
may not eliminate existing benefits that would otherwise not
be provided to part-time employees. An employer may not
transfer an employee to an alternative position to discourage the
employee from taking leave or otherwise to cause a hardship for
the employee. When the employee is able to return to full-time
work, he or she must be placed in the same or equivalent job as
the job he or she left when the leave commenced.
As noted above, when leave is taken due to the birth, adoption
or foster care placement of a child, leave may be intermittent
only if  the employer agrees (unless intermittent leave is required
because the mother or child has a serious health condition).
An employer may limit intermittent or reduced schedule leave
increments to the shortest period of time that the employer’s
payroll system uses to account for absences or use of leave,
provided it is one hour or less. Only the actual amount of leave
taken can be counted towards the 12 weeks of leave to which
an employee is entitled.
Other Leave Requirements
Leave Under the ADA
Taking leave under the ADA is a question of reasonable
accommodation of the disability, as opposed to a statutory right
to a leave such as under the FMLA the procedural requirements
are thus quite different of the disability. The FMLA covers private
employers with 50 or more employees, whereas the ADA covers
private employers with 15 or more employees. An employee with
a “serious health condition” who is eligible for FMLA coverage
may not be protected under the ADA as having a “disability.”
Under the FMLA a “serious health condition” is “an illness, injury,
impairment, or physical or mental condition that involves…
[i]npatient care… or [c]ontinuing treatment by a health care
provider.” 29 C.F.R. §§ 825.114(a)(1),(2). A serious health condition
is not necessarily an ADA disability, which defines a disability
as, “an impairment that substantially limits one or more major
life activities, a record of such impairment, or being regarded
as having such an impairment”, although some “serious health
conditions” like cancer may make an employee eligible for both,
a broken leg — or being pregnant — are not ADA disabilities.
Recently enacted legislation regarding the ADA may narrow
the gap between these two concepts. See the section on FMLA,
page 13.
The ADA requires an employer to provide reasonable
accommodation of known physical or mental limitations
imposed by an employee’s disability, unless the employer can
show that the accommodation would impose an undue hardship.
If the procedural requirements are met for an individual to be
eligible for both FMLA and ADA leave, allowing more than
12 weeks of unpaid leave may be considered the first stage or
step in a reasonable accommodation if the leave does not impose
an undue hardship on the employer. Taking leave time as part of
an ADA accommodation is different from FMLA leave. Under the
ADA, a qualified individual with a disability may work part time
or occasionally take time off, as a reasonable accommodation.
Furthermore, an employer and an employee can make an
agreement to a transfer, either temporarily or permanently.

20
 3 Disability and medical leave compliance

Developing Policies which Properly

Differentiate between Leaves of Absence
and Monetary Benefits
The taking of FMLA leave cannot result in the loss of any benefit
that accrued prior to the start of the leave. An employee must
retain all vacation, sick and personal time he or she had prior
to the leave (except to the extent paid leave is substituted
for unpaid FMLA leave). However, whether an employee can
continue to accrue vacation, sick and personal time while on
leave is determined by employer policies for employees on
unpaid leave. In addition, an employee cannot be required to
re-qualify for any benefits the employee enjoyed before the
FMLA leave.

With respect to pension plans and retirement plans, a period

of FMLA leave does not count as a break in service, and if
employment on a particular date is required, those on FMLA
leave are considered to be employed on that date. However,
unpaid FMLA leave periods need not be treated as credited
service for purposes of benefit accrual, vesting and eligibility
to participate if other unpaid leaves also are not considered
work time or accrual eligible.

General Principles Regarding

Medical Records
Under the ADA and FMLA, an employer’s ability to obtain
medical information depends on the timing and substance of
the inquiry or examination. The ADA has complicated rules
regarding an employer’s ability to make disability-related and
medical inquiries. After an applicant is given a conditional job
offer, but before the individual starts work, the ADA permits
an employer to make disability-related inquiries and conduct
medical examinations if it does so for all entering employees in
the same job category. 42 U.S.C. § 12112(d). If an individual is
screened out because of a disability, an employer must show that
the exclusionary criterion was job-related and consistent with
business necessity. 42 U.S.C. §§ 12112(b)(6) and (d)(3)(1994); 29
C.F.R. §§ 1630.14(b), 1630.10 (1998). Once employment begins,
the ADA permits employers to make disability-related inquiries
and required medical examinations only if they are job-related
and consistent with business necessity. 42 U.S.C. § 12112(d)(4)
(1994); 29 C.F.R. § 1630.14(c)(1998).

A disability-related inquiry or medical examination of an

employee is more likely to be “job-related and consistent with

21
 3 Disability and medical leave compliance
If a [medical] examination is
conducted in response to an
employee’s request for a reasonable
accommodation, the employer may
request documentation sufficient
to substantiate the individual’s
ADA disability and the need for
the requested accommodation.
business necessity” when an employer has a reasonable belief,
based on objective evidence, that: (a) an employee’s ability to
perform essential job functions will be impaired by a medical
condition; or (b) an employee will pose a direct threat due
to a medical condition. U.S. Equal Employment Opportunity
Commission, Enforcement Guidance: Disability-Related Inquiries
and Medical Examinations of Employees Under the Americans
with Disabilities Act, July 27, 2000.
Employee medical examinations also must be limited in scope.
For example, if an examination is conducted in response to
an employee’s request for a reasonable accommodation, the
employer may request documentation sufficient to substantiate
the individual’s ADA disability and the need for the requested
accommodation. However, the employer cannot ask for
documentation unrelated to the condition prompting the
accommodation request. Similarly, if an employer reasonably
believes that an employee’s ability to perform the essential
22
functions of a job will be impaired by a medical condition, or that
she or he will pose a direct threat due to a medical condition,
the employer is entitled only to the information necessary to
determine whether the employee can perform the essential
functions of the job without posing a direct threat.
Under the FMLA, employers may require employees to provide
medical certification supporting the need for leave due to a
serious health condition affecting the employee or an immediate
family member, FMLA regulations govern the protocol for
obtaining a second or third medical opinion (at the employer’s
expense), periodic recertification reports during FMLA leave, and
fitness to return to work following leave. 29 C.F.R. §§ 825.305-07.
The FMLA permits employers to have a uniformly-applied policy
or practice that requires similarly-situated employees (e.g., same
occupation, same serious health condition, etc.) who take leave
to obtain and present certification from the employee’s health
care provider to demonstrate that the employee is able to resume
work. 29 C.F.R. § 825.310(a). The Regulations clarify that if state
or local laws, or the terms of a collective bargaining agreement,
govern an employee’s return to work, those provisions shall apply.
29 C.F.R. § 825.310(b). Similarly, FMLA regulations confirm the
ADA requirements that return-to-work physicals be “job-related
and consistent with business necessity” continue to apply. Id.
For example, an employer may require a warehouse laborer
whose back impairment affects the ability to lift be examined
by an orthopedist, but may not require this employee to submit
to an HIV test because the test is not related either to the
essential functions of the job or to his or her impairment. Id.
FMLA regulations permit an employer to seek fitness-for-duty
certification with regard to the particular health condition that
caused the employee’s need for FMLA leave. The certification
usually is a simple statement of an employee’s ability to return
to work. 29 C.F.R. § 825.310(c). An employer’s health care
provider may contact the employee’s health care provider, with
the employee’s permission, to clarify the employee’s fitness to
return to work. Id. No additional information may be required
(and clarification may be requested only for the serious health
condition for which FMLA leave was taken). An employer may
not delay the employee’s return to work while making contact
with the health care provider.
FLSA establishes a federal

minimum hourly wage rate,

requires overtime pay for

hours worked in excess of

40 per week, and governs

the employment of minors.

4 Wage and Hour Compliance

 4 wage and hour compliance
The Fair Labor Standards Act is the primary federal
law governing wages and hours in employment.
FLSA establishes a federal minimum hourly wage rate,
requires overtime pay for hours worked in excess of
40 per week, and governs the employment of minors.
Employees are covered by the minimum wage and overtime
provisions of the FLSA if their work is performed in the
United States or a U.S. possession or territory; an employment
relationship exists between the employee and the employer,
and the business is a “covered enterprise” or the employee is a
covered “individual employee.” The FLSA applies to employers
and workers in all 50 states, the District of Columbia, Puerto
Rico, the Virgin Islands, and U.S. territories or possessions,
including American Samoa, the Commonwealth of the Northern
Mariana Islands, Guam, Wake Island, the Outer Continental Shelf
Islands, Johnston Island, and the Eniwetok and Kwajalein Atolls.
Employees who work in a foreign country or foreign location
subject to U.S. jurisdiction, other than the locations mentioned
above, are not covered by the FLSA.
Filing of wage and hour collective actions has exploded in recent
years. These wage and hour cases present unique and challenging
issues. They are time-consuming and costly for employers,
making FLSA compliance an essential priority.
Coverage of Employers
The FLSA defines an employer as “any person acting directly
or indirectly in the interest of an employer in relation to an
employee and includes a public agency, but does not include
any labor organization (other than when acting as an employer)
or anyone acting in the capacity of officer or agent of such
labor organization.” Thus, the definition of employer includes:
individuals, corporations and corporate officers, partnerships,
associations, agents or managers, governments and government
contractors, and religious enterprises. The Act’s exclusion of
labor organizations in its definition of “employer” is limited to
the relationship between the organization and its members.
While labor organizations are not employers of their members,
they are employers of individuals hired to administer the labor
organization’s business.
Sometimes it is difficult to determine whether an employer-
employee relationship exists. FLSA requirements are imposed
24
upon employers only in relation to their employees, not
independent contractors. Thus, it is of critical importance that
the relationship between a worker and putative employer be
defined so that the parties involved know whether the FLSA
applies to their situation. The Supreme Court has enunciated
what is known as the “economic reality test” to determine
the status of the parties in relation to one another. Walling v.
Portland Terminal Co., 330 U.S. 148 (1947); United States v. Silk,
331 U.S. 704 (1947); Rutherford Food Corp. v. McComb, 331 U.S.
722 (1947). In applying the economic reality test, courts tend
to look at four factors, none of which are dispositive. These
factors may include whether the employer had the power to
hire or fire the employee; supervised and controlled employee
work schedules or conditions; determined the rate and method
of payment; and, maintained employment records. Several
other courts have expanded the four-factor analysis to include
additional factors depending upon the factual circumstances.
If a court determines that an employer-employee relationship
does exist, FLSA compliance is required and the employee
may maintain a cause of action to collect damages should
violations occur.
Coverage of Workers
The FLSA defines employee as “any individual employed by
an employer.” The Act also specifies that covered employment
includes arrangements in which one party “suffers or permits”
another person to work. The economic reality test also is used to
determine whether a worker qualifies as an employee, and thus
is entitled to protections under the Act. The economic reality
analysis depends on the facts and circumstances, as determined
on a case-by-case basis. In applying the test, most courts look
to the following factors, none of which is dispositive: the degree
of control exercised by the employer over the manner in which
the work is performed; the extent of relative investments of
the putative employee and employer; the degree to which the
employee’s opportunity for profit or loss is determined by the
employer; the skill and initiative required in performing the job;
and the permanency of the relationship. The economic reality
test is also frequently used to determine whether an individual
is an employee or an independent contractor. Courts will look
to the totality of the circumstances of each case.

Proper Classification of Employees
as Exempt or Non-Exempt
The FLSA exempts certain groups of employees from coverage.
In general, exemptions are provided for: salaried white-collar
workers, such as executives, administrators, professionals, as
well as outside salespersons, computer professionals, workers
in industries such as transportation, bulk oil distribution,
domestic service, forestry, retail service, communications, and
agriculture, and, employees working under special certificates,
such as full-time students, learners, apprentices, and disabled
employees. FLSA provides specific rules that employers must
use to determine which employees are exempt. Exemptions
may apply to eligibility for minimum wage or overtime, or both.
The FLSA’s executive exemption covers those employees
normally thought of as “managers.” To qualify for the exemption,
the employee must be compensated on a salary basis at a rate
of not less than $455 weekly exclusive of board, lodging, or
other facilities. The employee must also have the primary duty
of managing the enterprise in which he or she is employed, or
of a customarily recognized department or subdivision thereof;
customarily and regularly direct the work of two or more
employees; and have the authority to hire or fire other employees
or make suggestions and recommendations that are given
particular weight about hiring, firing, advancement, promotion,
or other changes in status.
Employees excluded from the FLSA as salaried administrative
employees typically are those who assist management in the
general business operations of the company. They also must be
paid on a salary basis at a fixed rate of no less than $455 weekly.
The general rule for exempt administrative employees is that
they perform work directly related to the management or general
business operations of the employer or the employer’s customers;
and exercise discretion and independent judgment with respect
to matters of significance in the performance of their primary
duties. Whether an employee’s primary duty is “directly related to
the management or general business operations” is a frequently
litigated issue. A rule of thumb for analyzing this duty test is
to ask whether the employee is directly involved with making
or producing the actual product of the company or instead,
whether the employee is involved with the general operations
of the entity itself.
The FLSA’s professional exemption covers those employees
normally thought of as either learned or creative professionals.
To qualify for the exemption, employees must receive a salary
4 wage and hour compliance
of at least $455 weekly on a salary or fee basis, exclusive of
board, lodging, or other facilities; have as a primary duty the
performance of work that requires knowledge of an advanced
type in a field of science or learning customarily acquired by
a prolonged course of specialized intellectual instruction (the
learned professional), or requiring invention, imagination,
originality or talent in a recognized field of artistic or creative
endeavor (the creative professional). The learned professional
test requires working in an advanced field of knowledge that
usually requires special schooling. Advanced knowledge must
be obtained at a level beyond high school and typically involves
specialized academic instruction, frequently accompanied by
a degree, which is a prerequisite to enter the profession.
Employees whose primary duty is the performance of work
requiring invention, imagination, originality, or talent in a
recognized field of artistic or creative endeavor qualify for
exemption from the overtime rules as creative professionals.
The work creative professionals perform must be “in a recognized
field or artistic or creative endeavor” such as music, writing,
acting, or the graphic arts.
What are Hours of Work under the FLSA?
In general, “hours worked” includes all time an employee must be
on duty, or on the employer’s premises or at any other prescribed
place of work, from the beginning of the first principal activity
of the work day to the end of the last principal work activity of
the workday. Also included is any additional time the employee
is “suffered or permitted” to work. The FLSA does not define
the term “work.” Unrequested work that an employer “suffers or
permits” may be considered compensable time. If, for example,
a worker voluntarily continues a task or assignment beyond the
end of a shift, and a supervisor or manager knows or has reason
to believe that the work is occurring, the employer is obliged
to pay for the extra time in accordance with FLSA’s minimum
wage and overtime pay requirements, even absent express prior
approval of the work.
Recording Work Time
Records of work time are required for non-exempt workers. The
Act does not require a particular form for the records, but does
require that the records include certain identifying information
about the employee and data about the hours worked and the
wages earned. The law requires this information to be accurate.
The following is a listing of the basic records that an employer
25
 4 wage and hour compliance

must maintain: each employee’s full name and social security

number; address, including zip code; birth date, if younger than
19; sex and occupation; time and day of week when employee’s
workweek begins; hours worked each day. Total hours worked
each workweek; basis on which employee’s wages are paid (e.g.,
“$9 per hour,” “$440 a week,” “piecework”); regular hourly pay
rate; total daily or weekly straight-time earnings; total overtime
earnings for the workweek; all additions to or deductions from
the employee’s wages; Total wages paid each pay period; date of
payment and the pay period covered by the payment. Further,
each employer must preserve for at least three years payroll
records, collective bargaining agreements, sales and purchase
records. Records on which wage computations are based
should be retained for two years, i.e., time cards and piece work
tickets, wage rate tables, work and time schedules, and records
of additions to or deductions from wages. Records may be kept
at the place of employment or in a central records office.

Employers may use any timekeeping method they choose. For

example, an employer may use a time clock, have a timekeeper
keep track of employee’s work hours, or tell their workers to
write their own times on the records. Any timekeeping plan is
acceptable as long as the records are complete and accurate.

Ensuring Employees are Paid for

All Time Worked and that Overtime
is Properly Calculated
Unless exempt, employees covered by the FLSA must receive
overtime pay for hours worked over 40 in a workweek at a rate
not less than time and one-half their regular rate of pay. The
FLSA does not require extra overtime pay for work on Saturdays,
Sundays, holidays, or regular days of rest, unless overtime hours
are worked on such days. The FLSA applies on a workweek
basis, i.e., a fixed and regularly recurring period of 168 hours —
seven consecutive 24-hour periods. It need not coincide with
the calendar week; it may begin on any day and at any hour of
the day. Different workweeks may be established for different
employees or groups of employees. Averaging of hours over two
or more weeks is not permitted. Normally, overtime pay earned
in a particular workweek must be paid on the regular pay day
for the pay period in which the wages were earned. In any event,
employers must use the workday and workweek parameters to
total all regular and premium time hours worked.

26
 4 wage and hour compliance

The Regular Rate of Pay overtime hour worked in the period, the employee is given an
Before overtime can be computed, the employer must determine additional amount equal to one-half the hourly bonus figure. If
the employee’s regular rate of pay. The regular rate is determined it is impossible to determine the amount of the bonus actually
by dividing the total compensation an employee would earn earned each week, another reasonable or equitable method of
without the overtime premium by the number of hours worked allocation must be used.
during the workweek (and cannot be less than the federal
minimum wage). For each hour over 40, a premium rate of 1.5
times the regular rate is calculated. An employee’s “regular Collective Actions
rate” of pay is defined under Section 7(e) of the FLSA to include The FLSA affords a private right of action for employees to
“all remuneration for employment paid to, or on behalf of, the recover unpaid minimum wages and overtime compensation.
employee.” Employers are not entitled to offset any overtime An employee may bring a claim in his or her own behalf and
liability with wages paid in excess of the statutory minimum in behalf of “similarly situated” employees. 29 U.S.C. § 216(b).
wage. The regular rate is determined before deductions from Essential requirements to bringing an FLSA “collective action”
wages, such as employee payments for stock, are made. are (1) the named plaintiffs and proposed collective action
participants are “similarly situated”; and (2) the proposed
Special rules allow employers to exclude from an employee’s members must file with the court their consent to “opt-in”
regular rate certain payments that are not “measured by to the class action. Id.
or dependent on hours worked, production, or efficiency.”
These statutory exceptions include: suggestion plan awards, An employee or former employee who seeks to become a
discretionary bonuses, employee referral bonuses, employee member of a collective action brought pursuant to the FLSA
benefit plan contributions, gifts, call-back pay, paid leave from must “opt-in” to the class by filing a written consent with the
work, reimbursement of expenses, severance pay, subsistence court where the action is filed. This requirement contrasts with
pay, and talent fees. class actions brought under Rule 23 of the Federal Rules of Civil
Procedure and state law, where class members are generally
bound by any judgment or settlement in the class action unless
Bonuses, Differentials and “Extra” Pay they expressly “opt-out” of the suit.
Bonuses and incentive payments dependent on the quality,
quantity, or efficiency of production or hours worked generally
must be included in the regular rate. Examples of such bonuses
include: lump sum bonuses paid pursuant to a labor contract;
production or work incentive bonuses; bonuses that are based on
a percentage of sales; cost-of-living bonuses; “guaranteed wage”
bonuses paid in order to bring employees up to a specified wage;
stock bonus plans; attendance bonuses. When a bonus is of the
type that must be included in figuring regular rates of pay, several
methods of computing overtime compensation can be used. If
the bonus is paid each week, the amount of the bonus is added to
each employee’s straight-time earnings for the week, and the total
is divided by the number of hours worked that week. The result is
the employee’s regular rate of pay. The employee is entitled to this
rate for each of the first 40 hours and to time and one-half this
rate for each additional hour. When a bonus is paid less often
than weekly, the amount of the bonus must be allocated back
over the period of time it covers. This can be done by dividing
the amount of the bonus by the number of hours worked by the
employee in the period covered by the bonus. Then, for each

27
The Department of Health and

Human Services has issued

regulations, commonly referred

to as the “HIPAA privacy rule,”

providing standards for the

protection of health information

and for personal control of

such information.

5 Privacy

Medical Records
In addition to the analysis above regarding medical records
requested in connection with ADA and FMLA issues, there
are federal privacy requirements under the Health Insurance
Portability and Accountability Act (HIPAA) designed to restrict
access to, and use and disclosure of, individually identifiable
health or medical information. The Department of Health and
Human Services has issued regulations, commonly referred
to as the “HIPAA privacy rule,” providing standards for the
protection of health information and for personal control of such
information. Employers are covered by the HIPAA privacy rule if
they sponsor a self-insured health plan or engage in information
processing that includes a health care services component.
HIPAA was designed to improve efficiency in the health care
system by streamlining and standardizing the electronic
exchange of health care information by health plans, health care
providers, and health care clearinghouses. The mandate for new
privacy protections was included because of concerns about
inappropriate use and disclosure of personal health information.
Although HIPAA’s administrative simplification provisions
relate directly to the electronic exchange of health care data, the
privacy rule applies to personal health information in any form,
including information transmitted orally or in writing.
Under the HIPAA privacy rule, patients and group health plan
participants must receive information about how a plan or
provider will use, maintain, and disclose protected health
information. In addition, patients have the right to review their
own records, request changes to records, and receive a list of
any disclosures made of their records.
Blogging
Courts increasingly have addressed the reasonableness of
employees’ expectations of privacy in their Internet and email
use via employer-supplied computers. Employers can diminish
an employee’s expectation of privacy by putting a worker on
notice that electronic communications are to be used solely for
company business, and that the company may monitor or access
all employee Internet or email usage. The wide use of blogs, email
communications, and personal Web pages has blurred the lines
that used to separate what employees say on the job and what
they say in private. If monitoring of such communications is not
applied consistently to all employees, an employer could create
issues under federal or state anti-discrimination statutes by
singling out individuals for scrutiny.
5 Privacy
Use of Electronic Systems
Electronic mail is an essential business tool. In today’s legal
environment, employers often transmit confidential information
over the Internet via unencrypted email. Before doing so, they
should be aware that Internet communications may pass
through more than a dozen computers on their way to the final
recipient. Each computer is a potential source of exposure.
Using software that is readily available, even amateur hackers
have little difficulty in intercepting messages sent via the
Internet. The transmission of such information raises obvious
evidentiary issues of confidentiality, privilege and ethical
concerns. Considering the significant potential liability and
other risks employers face from electronic communications,
how far can employers go in monitoring these communications?
Private sector employees have no inherent constitutional right
to privacy. However, employer conduct is limited by common law
principles and federal and state privacy laws.
In 1986, Congress updated federal privacy statutes to address
changes in the workplace that rendered existing laws out-of-
date. Congress passed Title I of the Electronic Communications
Privacy Act (“ECPA”), which amended the federal Wiretap Act,
18 U.S.C. §§ 2510–2522, to afford protection against interception
of electronic communications. The Wiretap Act makes it an
offense to intentionally intercept any wire, oral, or electronic
communication without authorization. Additionally, Title II
of ECPA created the Stored Communications Act, 18 U.S.C. §§
2701–2712, which addresses access to stored wire and electronic
communications and transactional records. It makes it an
offense to “intentionally access without authorization a facility
through which an electronic communication service is provided
and thereby obtain access to a wire or electronic communication
while it is in electronic storage in such system.” Email and cellular
telephone conversations illegally intercepted do not lose their
privileged status. Under the ECPA, privileged communications,
including electronic communications, retain their privileged
character in the event they are intercepted in violation of the
law. Many states, such as New York, have followed the federal
government’s lead and enacted state legislation to protect the
privileged character of communications sent via email.
Generally, employer monitoring of employee emails and website
access is permissible under the ECPA for two reasons: employer
monitoring of email and website access likely does not meet
the ECPA’s definition of “intercept,” and the ECPA contains an
“ordinary course of business” exception that gives an employer
the right to access an employee’s email if the messages are
29
 5 Privacy
Electronic mail is an essential
business tool. In today’s legal
environment, employers often
transmit confidential information
over the Internet via unencrypted
email. Before doing so, they
should be aware that Internet
communications may pass through
more than a dozen computers on
their way to the final recipient.
30
maintained on a system provided by the employer. However,
the employer’s interception must be in the ordinary course of
business or more precisely, a “necessary incident to the rendition
of the service or protection of the rights of [the provider’s
property]…” 18 U.S.C. § 2511(2)(a)(1) (2006).
Over the past decade, ascendancy of the Internet as an
omnipresent communication tool has led to difficult legal
issues under the ECPA. In Konop v. Hawaiian Airlines, a pilot
alleges that his employer unlawfully accessed his secure website.
302 F.3d 868 (9th Cir. 2002). The airline gained access through
authorized users of the site, who allowed an airline officer to
use their identities and passwords. The U.S. Court of Appeals
for the Ninth Circuit held that the airline violated the Stored
Communications Act, but not the Wiretap Act, because the
website content “was not intercepted during transmission,
but while it was in electronic storage.” Id. At 874. However,
the Konop court also noted that ECPA was written before the
advent of the Internet and the World Wide Web, and as a result,
courts “have struggled to analyze problems involving modern
technology within the confines of this statutory framework,
often with unsatisfying results.”
More recently, the First Circuit held that retrieving an email is an
electronic communication under the ECPA because an email is
in transient electronic storage intrinsic to the communication
process. See United States v. Councilman, 418 F.3d 67 (1st Cir.
2005). In reaching this conclusion, the Court expressly rejected
the “in transit” and “in storage” distinction approved by other
Circuits. If the First Circuit’s view becomes more widely adopted,
an employer would have to rely on the “ordinary course of
business exception” to avoid liability for monitoring without
advance notice. This exception applies only where the employer
is monitoring email on systems it maintains, and the monitoring
is necessary to render a service or to protect property. Thus,
its application is limited. Further, it is unclear how a court
will apply the ECPA to employer monitoring of employee IMs
(instant messages) and blogs. Given that IMs are very similar to
telephone calls, monitoring IM messages could fall within the
ECPA’s definition of “intercept.” However, if the IM messages were
“intercepted” entirely on the employer’s network, the employer
might fall within the “ordinary course of business exception.”
An employer still would have to show the monitoring of IM
conversations was necessary to render a service or to protect
property. In contrast, because blogs are similar to websites, a
court could find monitoring blogs does not fall within the Act’s
definition of “intercept.”
5 Privacy

31
While separation and release

agreements can protect an

employer from costly litigation,

they must be carefully drafted

to be legally enforceable.

6 Miscellaneous
 6 miscellaneous

Enforceable Separation Agreements

When implementing layoffs, offering early retirement incentives,
or otherwise conducting employee terminations, an employer
can require departing employees to sign separation and release
agreements in exchange for severance pay, outplacement Confidential business information
services, employer-paid premiums for health insurance
coverage under COBRA or other benefits not already due. While
separation and release agreements can protect an employer
is put at risk when employees
from costly litigation, they must be carefully drafted to be legally
enforceable. A separation and release agreement must be entered with knowledge of this kind take
into knowingly and voluntarily. The employer also must offer
bona fide “consideration,” that is, money, benefits, or something
of value to which the employee is not already entitled in exchange positions with competitors. Many
for the employee entering into the agreement. In addition, if
the employee signing the agreement is 40 years of age or older,
certain provisions required by the ADEA must be included for employers use non‑compete
the waiver of age discrimination claim to be valid.

In general, release agreements explain clearly the specific rights agreements as a way to protect
being waived and be written in language the employee can
understand. Courts take an employee’s education and experience
against the improper use or
into consideration in deciding whether the employee understood
the agreement before he or she signed it. Courts uphold release
agreements if the employee knew or should have recognized disclosure of business information.
the rights being relinquished. To ensure that employees know
what they are giving up, release agreements should plainly and
specifically list the rights covered by the agreement. Courts also
are more likely to conclude that an employee knowingly gave
up legal rights if he or she consulted an attorney before signing
the agreement.

Protecting Confidential Information

Companies invest millions of dollars to develop information to
give them an edge over their competitors. Confidential business
information is put at risk when employees with knowledge of
this kind take positions with competitors. Many employers
use non-compete agreements as a way to protect against the
improper use or disclosure of business information. However,
non-competes alone may not be effective, as some jurisdictions
do not enforce employment non-competes, while others may not
enforce a broad non-compete in a particular situation.
Employers have recourse against unfair competition by former
employees even in the absence of a non-compete agreement or
covenant not to compete. Various statutory and common law
protections include the employee’s common law duty of loyalty;
the Economic Espionage Act of 1996; claims for common-law
and statutory theft; claims under computer crimes statutes; and,
common law and statutory claims for misuse of trade secrets.

33
A review of specific cases can

be helpful in understanding

the how the courts view the

employment landscape.

Appendix
Recent Developments
in Employment Law
 appendix: recent developments in employment law
The Supreme Court
Court Allows Retaliation Claims under Two Additional
Civil Rights Laws
In separate decisions issued the same day, the Supreme Court
has given employees the okay to bring retaliation claims against
their employers under anti-discrimination statutes, even though
the laws make no mention of a retaliation cause of action. In
CBOCS West, Inc. v. Humphries, 553 U.S. __, 128 S. Ct. 1951
(U.S. 2008), the Court held by a 7-2 vote that a Reconstruction-
era civil rights statute prohibiting race discrimination permits
retaliation claims. No. 06-143, (May 27, 2008). In the other case,
Gomez-Perez v. Potter, 128 S. Ct. 1931 (U.S. 2008), the Court ruled
by a 6-3 vote that federal employees who complain about age
discrimination are protected from retaliation by their employers
under the Age Discrimination in Employment Act (“ADEA”).
No. 06-1321(May 27, 2008).
Stare decisis, literally meaning “to stand by things decided,”
played a hand in both rulings. Only three years ago, the Court
issued a 5-4 decision authored by now-retired Justice Sandra
Day O’Connor holding that the broad prohibition on gender
discrimination in Title IX of the Education Amendments of 1972
(“Title IX”) encompasses retaliation claims even though the
statute does not specifically provide for a retaliation cause of
action. Jackson v. Birmingham Bd. of Educ., 544 U.S. 167 (2005).
Jackson relied on an earlier case in which the Court ruled that
another post-Civil War statute, 42 U.S.C. §1982, prohibiting
discrimination in property transfers allows for retaliation
claims. Sullivan v. Little Hunting Park, Inc., 396 U.S. 229 (1969).
Justices Thomas and Scalia, who both dissented in Jackson,
filed dissenting opinions in Humphries and Potter. Chief Justice
Roberts dissented in Potter, but not Humphries, on the theory
that “protection against discrimination may include protection
against retaliation for complaining about discrimination, but
that is not always the case.”
CBOCS West, Inc. v. Humphries: The Race Case
The plaintiff in this case, Hedrick G. Humphries, who worked
as an assistant manager for the Cracker Barrel restaurant
chain, brought a lawsuit against his employer alleging he was
terminated because of his race and because he complained
about racial discrimination against a co-worker. Mr. Humphries
asserted claims under both Title VII of the Civil Rights Act of
1964 (“Title VII”) and §1981, a post-Civil War statute prohibiting
discrimination with regard to the right to “make and enforce
contracts.” The statute is derived from the Civil Rights Act
of 1866, which implemented the Thirteenth Amendment,
abolishing slavery. Like Title VII, §1981 protects employees from
race discrimination, but unlike Title VII, it does not specifically
prohibit retaliation. The Supreme Court agreed to hear this case
after the Seventh Circuit Court of Appeals found that the plaintiff
was entitled to proceed on a §1981 retaliation theory.
Stare decisis largely guided the majority’s decision that §1981
allows retaliation claims. Because of the similarity between
§1981 and §1982 — the latter also derived from the 1866 Civil
Rights Act — as well as the federal appellate courts’ consistent
interpretation of §1981 as encompassing retaliation claims, there
was no reason to displace the decisions in Sullivan and Jackson,
the majority ruled.
Justice Breyer, who authored the majority’s decision, also rejected
the employer’s argument that §1981 would overlap with Title VII,
which provides a different remedial scheme, if it were interpreted
to provide a retaliation cause of action. “This argument…
proves too much,” wrote Justice Breyer. “Precisely the same
kind of TitleVII/§1981 ‘overlap’ and potential circumvention
exists in respect to employment-related direct discrimination,”
he continued.
Justice Thomas, joined by Justice Scalia, dissented vehemently.
“Retaliation is not discrimination based on race,” wrote
Justice Thomas, emphasizing the distinction between anti-
discrimination provisions which prohibit discrimination based
on who an individual is, and anti-retaliation provisions which
seek to protect individuals based on what they do. Justice
Thomas reiterated his belief that the Court misinterpreted
Sullivan in the Jackson decision, pointing out that the former
decision does not even contain the word “retaliation.”
The ruling is significant because §1981 has a longer statute
of limitations than Title VII and, unlike Title VII, contains no
limitations on the amount of punitive and pain and suffering
damages available to a plaintiff. In addition, a plaintiff must
file a charge of discrimination with the EEOC prior to suing
in federal court under Title VII within 300 days of the alleged
discriminatory act. In contrast, under §1981, a plaintiff may file
a lawsuit immediately, and has four years in which to do so.
Gómez-Pérez v. Potter: The Age Case
In Potter, the Supreme Court was called upon to determine
whether the ADEA’s federal sector provision, 29 U.S.C. § 633a(a),
which — unlike the Act’s private sector provision — does not
explicitly mention retaliation, permits federal employees to
bring retaliation claims.
35
 appendix: recent developments in employment law
Justice Alito, writing for the majority of the Court, concluded that
§633a(a), which requires that “[a]ll personnel actions affecting
employees… at least 40 years of age… be made free from any
discrimination based on age,” encompasses retaliation claims.
The majority’s decision was guided by Sullivan and Jackson.
As Justice Alito made clear, the Government — the defendant
in this case arguing against a retaliation cause of action in
the federal sector ADEA provision — urged the Court to
follow Sullivan in both Jackson and Humphries. Indeed, the
Government submitted in amicus curiae, or “friend of the
court,” brief in Humphries asserting that §1981’s prohibition
on “discrimination… quite naturally includes discrimination
on account of having complained about discrimination,”
Justice Alito noted.
The Court found it of little consequence that the federal sector
provision is silent on a retaliation cause of action. “Respondent
places too much reliance on the presence of an ADEA
provision specifically prohibiting retaliation against individuals
complaining about private-sector age discrimination… and the
absence of a similar provision in §633a(a),” explained Justice Alito.
Among other things, he pointed out that the two statutes were
enacted seven years apart and structured differently, with the
private sector provision specifically listing prohibited practices.
In dissent, Chief Justice Roberts, joined by Justices Thomas and
Scalia, maintained that the statutory language and structure of
the federal sector provision demonstrate that Congress did not
intend to create a cause of action for retaliation. “Congress was
not sloppy in creating this distinction; it did so for good reason:
because the federal workplace is governed by comprehensive
regulation, of which Congress was well aware, while the private
sector is not,” Chief Justice Roberts concluded.
Court Holds That Public Employee Retirement Plan
Did Not Violate ADEA
In Kentucky Retirement System v. E.E.O.C., No. 06-1037, 128
S. Ct. 2361 (U.S. Jun. 19, 2008, the Court held that a Kentucky
retirement plan for certain public employees did not violate
the Age Discrimination in Employment Act even though it
disadvantaged some beneficiaries on the basis of their age.
The Court based its decision on the fact that Kentucky was
not “actually motivated” by age when it set up the plan, as
shown by the benign intentions of its drafters.
36
Court Clarifies “Reasonable Factors Other Than Age”
Defense in ADEA Disparate Impact Cases
In Meacham et al. v. Knolls Atomic Power Laboratory (KAPL)
et al., No. 06-1505, 128 S. Ct. 2395 (U.S. June 19, 2008), the Court
held that an employer facing a disparate impact claim under
the Age Discrimination in Employment Act who intends to
defend on the basis of “reasonable factors other than age” must
both produce evidence raising the defense, and persuade the
factfinder of its merit.
Title VII Anti-Retaliation Provision Applied to Participant
in Employer’s Investigation
In Crawford v. Metropolitan Government, No. 06-1595, 128 S. Ct.
846 (U.S. Jan. 26, 2009), the Court ruled that the anti-retaliation
provisions of Title VII of the Civil Rights Act of 1964 protect an
employee who speaks out against harassment or discrimination
merely in response to an employer’s investigation and thus need
not be on her own initiative.
California Statute Regarding State Funds Recipients’
Union Organizing Activities Violated LMRA
In Commerce v. Brown, No. 06-939, 128 S. Ct. 2408 (U.S. Jun. 19,
2008, the Supreme Court reviewed and ultimately struck down
a California statute prohibiting certain employers that receive
state funds from using the money to assist, promote or deter
union organizing. The Court held that the statute violated the
Labor Management Relations Act’s protection of free speech by
both unions and employers.
“Me Too” Evidence Admissible On Case-by-Case Basis
in ADEA Actions
In Sprint/United Mgmt. Co. v. Mendelsohn, U.S., No. 06-1221,
128 S. Ct. 1140 Feb. 26, 2008, the Court held that testimony
by other “reduction in force” employees reporting to different
supervisors that they also were discriminated against because
of their age (so-called “me too” evidence) is neither always
admissible nor always inadmissible and instead “requires a fact-
intensive, context-specific inquiry.” The Court upheld the 10th
Circuit’s ruling that “me, too” testimony is not per se inadmissible
and that it was admissible in this case under the Federal Rules
of Evidence.
Mixed Motive Instruction Not Available in ADEA Actions
In Gross v. Financial Services Services Inc., 2009 U.S. Lexis
4535, (U.S. June 18, 2009), the Court held that a “mixed-
motives” instruction, which in Title VII cases shifts the burden
 appendix: recent developments in employment law
of persuasion to the employer upon showing discrimination
was simply a “motivating factor,” is not available to employees
in ADEA cases. The Court ruled a plaintiff bringing a
disparate-treatment claim under the ADEA has to prove, by a
preponderance of the evidence, that age was the “but-for” cause
of the challenged adverse employment action. The burden of
persuasion did not shift to the employer to show that it would
have taken the action regardless of age, even when a plaintiff
produced some evidence that age was one motivating factor.
Lower Courts
Second Circuit Holds That Toting Files Did Not Convert
Commuting To Work Time Under the FLSA
The Second Circuit held that New York City fire alarm inspectors
who were required to carry 15 to 20 pounds of files with them
as they traveled to and from work and around the city were not
entitled under the FLSA to receive pay for the time they spent
commuting. Singh v. City of New York, 524 F.3d 361 (2d Cir. 2008).
The court advised that carrying the documents was a “minimal
burden” that did not transform the inspectors’ commuting time
into compensable work time and did not significantly affect the
time normally required for commuting. But see Clarke v. City of
New York, 2008 U.S. Dist. LEXIS 47683 (S.D.N.Y. June 16, 2008)
(distinguishing Singh and holding that being forced to carry bags
of sufficient weight could convert commuting time to time “for
the benefit of the employer” compensable under the FLSA).
Second Circuit Distinguishes Between “Gender
Stereotyping” and “Sexual Orientation Discrimination”
In Kiley v. ASPCA, 296 Fed. Appx. 107 (2d Cir. N.Y. 2008),
the Second Circuit affirmed summary judgment against a
woman claiming sexual orientation discrimination and gender
stereotyping under Title VII, where plaintiff made no factual
statements that her suspension — on account of plaintiff sexually
harassing her supervisor — was based on gender stereotyping.
The court stated a gender stereotyping claim was impermissible
“bootstrapping” of what was truly a sexual orientation claim.
Kiley filed a petition for writ of certiorari to the Supreme Court
on March 7, 2009, Supreme Court Docket No. 08-10277.
Circuit Court Upholds Duty to Accommodate
“Obvious” Disability
In Brady v. Wal-Mart Stores, Inc., 531 F.3d 127 (2d Cir. N.Y.
2008), the Second Circuit affirmed the district court’s judgment
awarding damages to the plaintiff, an employee suffering from
cerebral palsy. The Court held that employers must reasonably
accommodate an obvious disability even if the employee does
not request accommodations.
New York’s Highest State Court Holds Executives
Protected Under Deductions Provision of New York
Labor Law
In Pachter v. Bernard Hodes Group, Inc., 10 N.Y.3d 609 (N.Y.
2008), the New York Court of Appeals (the state’s highest court)
responded to certified questions from the Second Circuit
Court of Appeals and held that an executive is entitled to the
protections afforded to employees under Section 193 of New
York Labor Law, which prohibits an employer from making all
but a narrow range of deductions from an employee’s earned
wages. The Court further held that an employer and employee’s
express or implied agreement governs the determination of
when a commission is earned and thus whether deductions
from commission are in violation of Section 193.
No Wrongful Discharge Claim for Worker with
“Sympathetic Ear” For Workplace Complaints
An employee who claimed that his employer terminated
him because he had a “sympathetic ear” for a fellow workers’
complaints could not bring a claim for wrongful termination in
violation of public policy, the California Court of Appeal ruled.
Luke v. Collotype Labels USA, Inc., 159 Cal. App. 4th 1463 (Cal.
App. 1st Dist. 2008). Affirming summary judgment in favor of the
employer, the court ruled the plaintiff ’s claim was pre-empted
or barred by the National Labor Relations Act, as the plaintiff ’s
claims asserted arguable unfair labor practices governed by
federal labor law.
In September 2005, the employer suspended plaintiff for allegedly
being dishonest about work coverage, sending an email to
the company’s managing director claiming there was “trouble
brewing” at the plant, and allegedly soliciting signatures from
fellow workers for a letter “denouncing management.” As a
result, the employer terminated plaintiff for insubordination and
conduct detrimental to the “team.”
Plaintiff sued for wrongful termination and alleged that fellow
workers complained to him about “unfavorable working
conditions.” Plaintiff alleged that his termination violated
California’s public policy set forth in section 232.5 of the
Labor Code, which prohibits employers from discharging,
disciplining, or discriminating against employees who disclose
information about the employer’s working conditions. The trial
37
 appendix: recent developments in employment law
court granted the employer’s summary judgment motion on
the grounds Plaintiff ’s claims were pre-empted by the NLRA.
Plaintiff appealed.
On appeal, the court held the claim was pre-empted under the
NLRA. The U.S. Supreme Court long has ruled that state courts
“must defer to the exclusive competence of the National Labor
Relations Board in cases in which the activity… is arguably
subject to the protections of… the [NLRA].” Linn v. Plant Guard
Workers, 383 U.S. 53, 60 (1966). Among other things, the NLRA
guarantees employees the right to join labor organizations, to
bargain collectively, and to engage in concerted activities for
mutual aid and protection. 29 U.S.C. § 157. The NLRA also makes
it an unfair labor practice for an employer to interfere with those
rights. 29 U.S.C. § 158. The court stated that discussions among
employees regarding their working conditions were protected
activities. The court noted that the plaintiff testified that he was
terminated because he provided support and ideas to fellow
workers who complained about their working conditions and
these actions were protected activities under the NLRA.
Although the plaintiff was unsuccessful in pursuing a state
court remedy, had this employee commenced timely unfair
labor practice proceedings before the National Labor Relations
Board, he might have sought federal administrative relief. Under
Board law, employees may be protected from adverse action by
their employers if they engage in “protected concerted activity”
with fellow employees concerning their terms and conditions
of employment, even in the absence of union activity.
Employer Entitled to Affirmative Defense in Harassment
Case When Harassed Employee Failed to Take Advantage
of the Preventive and Corrective Measures Offered to Her
by Employer
An employer established an affirmative defense to an employee’s
sexual harassment claims where the employee unreasonably
failed to use the preventive and corrective measures offered by
the company. Her allegation that she did not complain due to
fears of retaliation was insufficient. Thornton v. Fed. Express
Corp., 530 F.3d 451 (6th Cir. 2008). The employee did not report
the sexual harassment until two months after her leave of
absence. After the employee reported the sexual harassment,
the company offered to allow her to return to work under the
supervision of a different manager, but the employee refused
the company’s return-to-work offers.
38
The Court stated that an “employee’s subjective fears of
confrontation, unpleasantness or retaliation do not alleviate
the employee’s duty… to alert the employer to the allegedly
hostile environment.” The Court also stated that the “employee’s
dissatisfaction with the investigation did not justify [her]
rejection of the corrective action taken by [the employer]…”
The Court affirmed the grant of summary judgment on the
employee’s hostile work environment claim because the
employer exercised reasonable care to prevent and correct
promptly any sexually harassing behavior, and the employee
unreasonably failed to take advantage of the employer’s
corrective opportunities.
Employees Awarded Unprecedented $6.5M for Minnesota
Wage Law Violations in State Court Class Action
A Minnesota district court judge awarded $6.5 million in
compensatory damages to a class of nearly 56,000 workers after it
found an employer violated the Minnesota Fair Labor Standards
Act (“MFLSA”). The court determined that the employer failed
to maintain accurate time records, required employees to work
“off the clock” (without pay) and denied employees adequate
meal periods and rest breaks. See Braun v. Wal-Mart, Inc., No.
19-CO-01-9790 (Minn. Dakota Cty, June 30, 2008). The court
has set the case for a fall jury trial to decide what additional
penalties and punitive damages should be awarded. The punitive
damages portion of the trial scheduled for October could be
significant because the court found over two million violations,
and Minnesota law provides for a civil penalty of up to $1,000 per
violation, meaning a potential additional exposure exceeding two
billion dollars. A court trial regarding injunctive relief also has
been set.
In reaching its decision, the court determined the employer
failed to have its legal department and human resources division
review and comply with the law. The court characterized the
employer’s “ignoran[ce] of the law” to be reckless, and therefore,
willful. The court noted that if the employer had been “more
vigilant about identifying and investigating” instances of off-the-
clock work, it likely would have found it was not in compliance.
Similarly, the court found that the employer’s “failure to make
compliance with corporate and statutory requirements” for
meal and rest breaks and off-the-clock work a meaningful factor
in supervisor and manager evaluations played a “significant”
role in the number of violations. Finally, the court determined
that evidence showed that the employer “knew or should have
known” of the potential widespread problems.
 appendix: recent developments in employment law
Indiana Supreme Court Reinstates $325,000 Jury Verdict
in “Workplace Bullying” Case
In a trial held in Indiana resulting in a verdict of $325,000, the
expert for the plaintiff characterized a workplace incident as “an
episode of workplace bulling.” Because the law does not prohibit
“workplace bullying”, the defendant asked the Court to instruct
the jury that such a cause of action did not exist. The trial
court refused. In reviewing the verdict, Indiana Supreme Court
declined to overturn the verdict based on the failure to give the
jury instruction. Raess v. Doescher, 883 N.E. 2d 790 (Apr. 8, 2008).
The plaintiff ’s expert, a psychologist, characterized various
confrontations between the plaintiff and defendant as
“an episode of workplace bullying” and the defendant as a
“workplace abuser.” The plaintiff ’s attorney also referred to the
defendant as a “bully” in his opening statement and referred to
“bullying” numerous times in his closing argument. In his closing
statement, the plaintiff ’s attorney stated, “We ask for a verdict in
favor of [the plaintiff]. And, yes, that’s a verdict against workplace
bullying and against the bullying incident.” The jury returned with
a verdict for the plaintiff of $325,000.
The Indiana Court of Appeals overturned the verdict holding
that the trial court’s refusal to give the defendant’s proposed
jury instruction that workplace bullying was not a recognized
cause of action was reversible error. The Indiana Supreme Court,
however, reversed. The Court held workplace bullying could be
considered a form of intentional infliction of emotional distress,
as well as evidence supporting the plaintiff claim of assault.
The Court’s opinion may provide plaintiffs an additional
opportunity to pursue claims beyond traditional harassment
claims under Title VII of the Civil Rights Act. As a result,
employers should ensure that managers and supervisors receive
appropriate training in proper supervisory techniques, as well
as in avoiding claims of workplace harassment.
Two Federal Appellate Courts Validate “Associational”
Discrimination Theory
Title VII of the federal Civil Rights Act of 1964 prohibits
employers from discriminating against employees based on
race, color, religion, sex or national origin. Title VII also prohibits
discrimination against employees who have opposed any
practice that is an unlawful employment practice under Title VII,
or who have made a charge, testified, assisted, or participated in
any manner in an investigation, proceeding, or hearing involving
an alleged violation of Title VII. Two recent cases, however,
demonstrate that Title VII also may provide an employee with
the right to allege discrimination or retaliation based, not only
on his or her own protected characteristics or activity, but
on the employee’s “association” with another individual who
comes within a protected classification or who has engaged in
protected activity.
In Holcomb v. Iona College, a Caucasian former assistant
basketball coach alleged that he was terminated because his
spouse is African-American. 521 F.3d 130 (2d Cir. 2008). Reversing
the District Court, the United States Court of Appeals in New
York agreed that this allegation was sufficient to state a claim of
“associational” discrimination under Title VII. The Court stated,
“[W]here an employee is subjected to adverse action because an
employer disapproves of interracial association, the employee
suffers discrimination because of the employee’s own race.” While
acknowledging that the employer asserted that its termination
decision was unrelated to the plaintiff ’s marriage, the Court held
that the plaintiff pointed to sufficient evidence (if credited) of
discriminatory animus, including specific alleged statements of
dissatisfaction with the assistant coach’s interracial marriage
by the administration, for a jury to consider whether “Holcomb
has established by a preponderance of the evidence that his
termination was the result of racial discrimination.” The Court’s
holding also points out that a plaintiff who brings a claim under
Title VII does not have to show that discrimination was the
employer’s sole motive in order to obtain relief.
In a similar vein, in Thompson v. North American Stainless, LP,
the United States Court of Appeals in Cincinnati ruled that a
male employee who was terminated following his co-worker
fiancee’s filing of a discrimination charge with the Equal
Employment Opportunity Commission asserted a prima
facie case of retaliation under Title VII. 520 F.3d 644 (6th Cir.
2008). Allowing that this holding was not consistent with a
“literal reading” of Title VII, the Court stated that its decision
nevertheless was consistent with prior guidance from other
circuits and that any contrary finding would “defeat the plain
purpose” of the statute. The Court relied on prior decisions which
interpreted the protections afforded by Title VII expansively,
including Burlington Northern & Santa Fe Railway Co. v. White,
548 U.S. 53 (2006), where the Supreme Court set forth a liberal
standard for evaluating whether an employer’s action was
retaliatory, as well as the EEOC Compliance Manual. The Court
noted that the EEOC Compliance Manual “expressly states that a
person claiming retaliation need not be the one who conducted
the protected activity. ‘Title VII… prohibit[s] retaliation against
39
 appendix: recent developments in employment law
someone so closely related to or associated with the person
exercising his or her statutory rights that it would discourage
that person from pursuing those rights.’” The Court further
reasoned that a contrary ruling would “permit employers to
retaliate with impunity for opposition to unlawful practices, filing
EEOC charges or otherwise participating in such efforts, as long
as that retaliation is only directed at family members and friends,
and not the individual conducting the protected activity” and
that “tolerance of third-party reprisals would, no less than the
tolerance of direct reprisals, deter persons from exercising their
protected rights under Title VII.”
In evaluating the propriety of disciplinary and/or termination
decisions, human resources professionals and in-house
counsel must consider the potential viability of “associational”
discrimination claims that might be filed as a consequence of
their actions. This concern may be particularly acute where
spouses, other relatives and partners are employed by the
same employer.
Sixth Circuit Relaxes Standard for Plaintiff to Proceed
to Trial On Mixed Motive Race Discrimination Claim
Easing the way for plaintiffs to get to trial, a panel of the U.S.
Court of Appeals for the Sixth Circuit has announced a new
standard for “mixed motive” discrimination claims under Title
VII of the Civil Rights Act of 1964 at the summary judgment
stage. White v. Baxter Healthcare Corp., 533 F.3d 381 (6th Cir.
2008). The Plaintiff in mixed motive discrimination claims
alleges that an employment decision was motivated by both
legitimate (i.e., job performance) and impermissible (i.e., race
discrimination) reasons. In this case, the Court held that, to
defeat summary judgment, plaintiffs merely must produce
evidence (1) of an adverse employment action, and (2) that a
protected characteristic under Title VII was a motivating factor
for the adverse action. In so ruling, the Court abandoned the
classic McDonnell Douglas burden-shifting analysis, where the
plaintiff must establish a prima facie case of discrimination,
the employer must then articulate a nondiscriminatory reason
for its actions, and then the plaintiff must then show that the
employer’s stated reason is a pretext for discrimination. With
this new standard, the Sixth Circuit created a split among the
U.S. Courts of Appeal regarding the proper summary judgment
standard for mixed motive claims. This conflict ultimately may
need to be resolved by the U.S. Supreme Court.
From 1998 to 2007, the plaintiff, an African-American, worked
as a pharmaceutical sales representative for the employer. In
40
2004, the plaintiff began reporting to a new regional manager.
According to the plaintiff, his manager told him that “no one
wants to work with a black man” and that “nobody wants to
be around a black man.” The manager also allegedly referred to
another sales representative as “that black girl.” The plaintiff also
claimed that his manager circulated an email which showed
an image of Osama Bin Laden morphing into O.J. Simpson and
which contained the subject line “I KNEW IT!!! I KNEW IT!!! I
KNEW IT!!!”
In September 2004, the plaintiff applied for a regional manager
position. He and four other candidates were interviewed.
The plaintiff was the only African-American applying for the
position and also the only candidate who had an MBA. During
the plaintiff ’s interview, the employer found that the plaintiff
lacked management experience and was “extremely aggressive”
and “confrontational.” By contrast, the employer found that a
female Caucasian candidate had management experience, was
“energetic,” and would be a great “cheerleader” for her people.
The employer ultimately selected the Caucasian female for the
position, even though she lacked prior sales experience.
Thereafter, the plaintiff received his year-end performance
review. Performance ratings were based on certain “performance
management objectives” set forth in the “PMO grid.” Based on
the PMO grid and his sales achievement, the plaintiff should
have received a “Meets Expectations” rating which would have
resulted in a merit raise of 3%. Rather than rating the plaintiff in
accordance with the PMO grid, however, the employer evaluated
the plaintiff based on criteria set forth in an email to his manager.
The email stated that sales representatives would receive a “Does
Not Meet Expectations” if they failed to sell a minimum of 95%
of their sales plan of a certain drug. The plaintiff sold 92% of his
sales plan of that drug and should have been rated as a “Does
Not Meet Expectations.” However, the plaintiff ’s manager rated
the plaintiff as “Meets Minus,” noting that he had a challenging
sales year. As a result of his review, the plaintiff received a lower
salary increase.
The plaintiff subsequently sued the employer under Title VII,
claiming that the employer discriminated against him on the
basis of his race by denying him the promotion and downgrading
his performance review. The employer requested summary
judgment against the plaintiff, which the district Court granted.
The plaintiff appealed.
The appellate Court analyzed the plaintiff ’s failure-to-promote
claim under the traditional McDonnell Douglas burden-
 appendix: recent developments in employment law
shifting analysis. It found the plaintiff had satisfied his initial
burden of demonstrating a prima facie case of discrimination
and that the employer’s stated reasons for its selection of the
female candidate were nondiscriminatory. However, the Court
found that the plaintiff raised sufficient factual uncertainties
regarding whether the employer’s explanation was pretextual.
Specifically, the Court noted that the plaintiff possessed certain
qualifications which the female candidate did not: the plaintiff
had an MBA, several years of sales experience, and was familiar
with the company’s products and the challenges in the region.
The Court also found that the employer’s perception of the
plaintiff as “aggressive” during his interview was highly subjective
and that its assessment of the other candidate’s management
experience was overblown. Accordingly, the Court held that the
employer was not entitled to summary judgment on the failure-
to-promote claim.
Addressing the plaintiff ’s performance review claim, the Court
held that the McDonnell Douglas burden-shifting analysis does
not apply in mixed motive cases at the summary judgment
stage. Rather, the Court held that a plaintiff can defeat summary
judgment “simply by showing that the defendant’s consideration
of a protected characteristic was a motivating factor for any
employment practice, even though other factors also motivated
the practice.” The Court acknowledged that this new, lighter
evidentiary burden at the summary judgment stage was “not
onerous” and should keep a case from trial “only where the record
is devoid of evidence” supporting the plaintiff ’s claim. The Court
also stated that it was “irrelevant” whether the plaintiff presented
direct or circumstantial evidence supporting the claim.
Applying its new analytical framework, the Court found that
the plaintiff ’s downgraded performance review constituted an
adverse employment action and that the plaintiff presented
sufficient evidence demonstrating that his rating was motivated,
at least in part, by race. It noted that the supervisor’s remarks
indicated that he harbored racial animus. The Court found that
the evidence supported the plaintiff ’s position that the PMO
grid, not the email, rightly controlled the sales representatives’
evaluations. Accordingly, summary judgment also was
inappropriate on the performance evaluation claim.
The case reminds employers to avoid using overly subjective
criteria when making employment decisions, such assessments
(e.g., “energetic” or “aggressive”) provide fodder for lawsuits.
Supervisors and managers should be trained regarding
evaluation procedures. When preparing performance
evaluations, employers should ensure that employees are
evaluated according to stated, formal criteria.
Abortions Are Covered by Pregnancy Discrimination Act
of Title VII
A female employees’ right to be protected against sex
discrimination under Title VII of the 1964 Civil Rights Act
prevents an employer from terminating an employee for having
an abortion, the Third Circuit rules. Doe v. C.A.R.S. Protection
Plus, Inc., No. 06-3625 (3d. Cir. 2008). The plaintiff was terminated
three days after having an abortion. She claimed that she was
terminated because she had an abortion and that doing so
constituted sex discrimination under Title VII and the Pregnancy
Discrimination Act. Citing a Sixth Circuit case which held that an
employer may not discriminate against a woman simply because
she exercised her right to have an abortion (Turic v. Holland
Hospitality, Inc., 85 F.3d 1211 (6th. Cir. 2006)), the court held
Title VII and the PDA protect women who make the decision
to terminate their pregnancies. The Third Circuit noted that the
result was supported by the legislative history of the PDA which
states it applies to all situations in which women are “affected
by pregnancy, childbirth, and related medical conditions.” The
Court also cited to EEOC guidelines which state that under
the PDA a woman is protected against adverse employment
actions for having an abortion. Based on its ruling, the court
reversed and remanded the proceedings to the lower court for
further proceedings.
New Jersey Supreme Court Backs Jewish Police Officer’s
Religious Harassment Claim
In a case of first impression, the New Jersey Supreme Court
held the same standard that applies to sexual or other types of
prohibited workplace harassment cases also applies to religious
harassment. In Cutler v. Dorn, the complaint alleged co-workers
and supervisors harassed a Jewish police officer regarding
his Jewish ancestry. 196 N.J. 419 (2008). In reviewing the case,
the New Jersey Supreme Court held that “consistent with this
state’s strong policy against any form of discrimination in the
workplace… the threshold for demonstrating a religion-based
discriminatory hostile work environment cannot be any higher
or more stringent than the threshold that applies to sexually
or racially hostile workplace environment claims.” The court
rejected the employer’s “humor file” defense — that the same
type of conduct was experienced by other employees of other
religions. The court concluded that “if the ribbing had been
sexual in nature and female police officers were made to go
41
 appendix: recent developments in employment law
along with a so-called humor file that was filled with bawdy
pictures of nude women, we doubt that a female police officer’s
sexually hostile workplace claim would have been dismissed.”
Legislative Developments
Final Family Medical Leave Act (FMLA) Regulations
The final DOL regulations implementing the FMLA, effective
January 16, 2009, require employers to make extensive changes to
policies and practices. 73 F.R. 67934, et seq. (Jan. 16, 2009). Here
is a brief summary of the basic changes in the new regulations:
(1) Family members of active duty service members may
take up to 12 weeks to manage their affairs due to any
exigency related to deployment or 26 weeks to care for
a service member injured in the line of duty.
(2) 12 months of employment prior to leave requirement
is not satisfied by employment prior to a seven year
continuous break in service, except where the employee
served in the military or the CBA provides otherwise.
(3) Employees on non-FMLA leave may accrue FMLA leave
by using that time to satisfy the 12-month employment
requirement.
(4) Slight changes to the continuing treatment definition in
establishing a serious health condition.
(5) The FMLA waiver prohibition does not prevent the
settlement of past claims or acceptance of light
duty assignments when recovering from a serious
health condition.
(6) Employers are required to conform to new posting
requirements.
(7) Employees are required to use usual and customary
call-in procedures for reporting FMLA absences, unless
there are exigent circumstances.
(8) Use of paid leave must follow terms of employer’s policy
when used concurrently with FMLA leave.
(9) Bonuses may be denied based on a failure to meet
specified goals due to FMLA leave, but may not be
denied if any equivalent non-FMLA leave counts
toward those goals.
(10) Medical certifications may only be requested by certain
designated individuals and not a direct supervisor.
42
(11) An employer may require a fitness-for duty certification
to specifically address the employee’s ability to perform
essential job functions, when safety is an issue, before
returning to work.
(12) Jointly employed employees are considered assigned
to their primary employer’s office unless the employee
physically worked at a secondary employer for at least
one year.
(13) Telecommuters are employees of the office they report
to or which assignments are made.
Treble Damages Under Massachusetts
Wage and Hour Laws
A recent “clarification” of the Wage and Hour laws by the
Massachusetts legislature, effective July 13, 2008, will significantly
impact the handling of wage and hour complaints by employers
state-wide. Pursuant to Senate Bill No. 1059, any lawsuit alleging
a claim under the Massachusetts Wage and Hour laws will carry
with it the potential for an award of treble damages, in addition
to litigation costs and attorneys’ fees, regardless of the willfulness
or inadvertence of the employer’s actions that form the basis for
the claim.
The Massachusetts legislature has sent a clear message to
Bay state employers that it is their responsibility to pay their
employees what they are entitled when they are entitled to it,
or run the risk of a harsh penalty. (Because the Legislature has
characterized their revision as a “clarification” of an existing law,
it is unclear whether the change will have a retroactive effect.
This issue will surely be resolved by the courts in the near future).
The revision to the Wage and Hour laws will likely trigger an
increase in individual and class actions in Massachusetts alleging
violations of the Wage and Hour laws based on workplace tipping
practices. Following several significant jury awards, tipping
practices have recently been the subject of increased scrutiny
by the courts and the public. For example, in a tip pooling class
action in California, a class of Starbucks “baristas” won an
award of $106 million (though the award was later overturned).
Similarly, nine American Airlines skycaps at Logan Airport won
$325,000 in a federal court action in Massachusetts.
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