Ensuring Enforceability of Separation and Release Agreements

The Sixth Circuit recently allowed an Equal Pay Act and Title VII pregnancy discrimination suit to proceed despite the fact that plaintiff signed an agreement releasing all claims and, did not turn back the severance payment given in consideration for the release. In McClellan v. Midwest Machining, Inc., the Court relied upon the United States Supreme Court’s analogous decisions in Hogue v. Southern R.R. Co. and Oubre v. Entergy Operations, Inc. to hold that a plaintiff is not required to tender back consideration received before filing suit under Title VII and the EPA.

The lawsuit was allowed to proceed, and enforcement of the release denied at this early stage, because plaintiff, who was pregnant at the time of termination, “was ‘blindsided’ by an unexpected meeting” to terminate her employment and felt “bullied” into signing the agreement. Plaintiff testified that the company’s president said she “needed to sign if [she] wanted any severance.” While plaintiff and the president reviewed the agreement together, plaintiff claimed she felt “pressured” into signing without a lawyer and later explained that she did not understand that the claims she released were discrimination claims. As such, it was possible for a jury to conclude that plaintiff’s execution of the release was not knowing and voluntary.

Ensuring that an employee enters into release agreements knowingly and voluntarily is of primary concern when presenting such agreements to employees. Using the Older Workers’ Benefit Protection Act language and format surely would help to show that the release was signed knowingly and voluntarily.

New York City Issues Sexual Harassment Training Notice and Fact Sheet

In an effort to prevent sexual harassment in the workplace, New York State and New York City have enacted laws mandating educational sessions to reinforce what is (and what is not) appropriate workplace conduct.  Joining, California, Connecticut, and Maine, mandatory training will now be required in New York City and New York State.  To help guide employers, NYC has published a fact sheet—you can access from this link.  We are still awaiting guidance from New York State and will keep you posted when those are issued.  If you need assistance understanding what is required or how to fulfill it (or to do the training), please let us know.


Hospital Compliance Officer’s Opposition to Termination of Co-Worker States a Claim of FMLA Retaliation

The United States District Court for the District of Columbia recently denied a Hospital’s motion to dismiss a Family and Medical Leave Act (“FMLA”) retaliation claim by a senior officer because of the close time proximity between a protest of alleged discriminatory treatment of a co-worker and the protester’s own discharge.  Lott v. Not-For-Profit Hospital Corporation.  The Court held that plaintiff’s meeting with the Hospital’s CEO to discuss his belief that the co-worker’s termination  violated the FMLA, could be considered protected “oppositional conduct.”   In light of the close timing between the oppositional conduct and termination, the Court allowed the FMLA retaliation claim to proceed.

Employers should be mindful of potential retaliation claims when an employee engages in protected activity before taking adverse action.  To mitigate risk, the basis for any such adverse action should be well documented.

Failure to Hire Due to “Jewish Blood” May Constitute Race Discrimination Under Title VII

A federal magistrate in the Western District of Louisiana has issued what appears to be the first ruling under Title VII of the Civil Rights Act of 1964 that someone who is Jewish may be protected from race discrimination under the statute. In Bonadona v. Louisiana College, the Court ruled that an individual who was born to a Jewish mother but converted to Christianity could proceed with his Title VII claim on the basis that Jews are a protected “race” under Title VII. Plaintiff, a practicing Baptist who had been born into a Jewish family, alleged that the College violated Title VII’s prohibition against racial discrimination when it refused to hire him because of his “Jewish descent” and what the College’s President called Plaintiff’s “Jewish blood.” The College moved to dismiss on the ground that Plaintiff’s “Jewish ethnic heritage” does not qualify as a race under Title VII.

In the Report and Recommendation denying the motion, the magistrate considered decisions arising under other statutes from the United States Supreme Court and other federal courts finding that Jews are a group entitled to racial protection.

The Bonadona court was persuaded by the rationale that recognized that “anti-Semitism . . . is often rooted in prejudice against a person based on his heritage/ethnicity without regard to the person’s particular religious beliefs,” and concluded that Jewish citizens “have [thus] been treated like a racial or ethnic group that Title VII was designed to protect from employment discrimination based on membership in that group.”

The College has filed objections to the Report and Recommendation arguing that the court’s reliance on precedent interpreting cases that did not arise under Title VII was improper.

Fifth Circuit Finds Employer’s Peer Review Process Does Not Constitute an Adverse Employment Action

The Fifth Circuit recently affirmed the granting of summary judgment to an employer dismissing a Title VII race discrimination claim. In Stroy v. Gibson, an African American primary care physician employed by the Department of Veterans Affairs alleged race discrimination following a peer review committee determination that competent practitioners would have managed the treatment of a patient differently than Plaintiff. Briefly, the employer’s policy allowed for peer review of a doctor’s patient care after a patient’s admission to the hospital within three days of an ambulatory care visit. The patient at issue was admitted to the hospital two days after the visit with Stroy.

Upon learning of the peer review committee’s determination that competent practitioners would have handled the patient differently, Stroy requested an opportunity to respond. The employer scheduled a second peer committee meeting. However, before the meeting was conducted, Stroy filed a complaint of discrimination. Ultimately, the committee reversed its finding.

The Fifth Circuit reviewed the District Court’s determination that Stroy failed to allege a prima facie case of race discrimination under Title VII. The District Court held, and the Fifth Circuit agreed, that Stroy did not allege an adverse employment action under Title VII. The Court ruled the peer review committee’s actions did not constitute an “ultimate employment decision” (such as hiring, firing, promoting, etc.). Here, Stroy offered no evidence that he suffered a reduction in privileges, job responsibilities, or pay as a result of the peer review process.

Although the end result was favorable for the employer, it was solely because of the specific facts of this case. In another case, a poor performance review that does result in a denial of a pay increase or a demotion could very well end up creating liability for discrimination.

Agreement’s Requirement To Forego Claims Of Future Discriminatory Conduct May Constitute A Materially Adverse Action

In Lester v. O’Rourke, the United States District Court for the North District of Illinois held that Plaintiff is entitled to trial on his Title VII retaliation claim after he signed a Last Chance Agreement (“LCA”) that settled pending Title VII claims and also waived claims that might be asserted if the employer disciplined or terminated him.

Plaintiff, a sixty-year-old African American man who worked for the Department of Veterans Affairs, filed discrimination claims against his employer. After engaging in multiple unsuccessful mediation sessions, Defendant offered Plaintiff a choice between signing the LCA or losing his job.  Plaintiff ultimately signed the LCA.  Shortly after transferring to a new location pursuant to the LCA, Plaintiff was terminated for allegedly violating performance and conduct-related provisions of the LCA.

Plaintiff alleged that Defendant unlawfully retaliated against him in violation of Title VII of the Civil Rights Act. The Court denied Defendant’s motion for dismissal of Plaintiff’s retaliation claim.  Simply stated, a claimant cannot waive future claims (only settle past ones).  Moreover, the Court concluded that the LCA provision barring future claims constituted a materially adverse action because it “would dissuade a reasonable worker from engaging in protected activity.”  Therefore, the Court permitted the Plaintiff to continue pursuit of his Title VII retaliation claim.

Employers must be cautious in entering into an agreement that requires employees to forego claims of future discriminatory conduct. Settlement agreements are enforceable if they are knowingly and voluntarily executed and comply with other legal requirements.  Overly broad agreements, like the one in question, create their own legal exposures.

Pregnancy-Related Restroom Breaks May Be Protected Under ADA, and Not Title VII

Claiming that frequent restroom breaks were required by a pregnancy-related medical condition, a former employee’s claims were allowed to proceed under the Americans with Disability Act, but not Title VII.  In Wadley v. Kiddie Academy International, Inc., plaintiff alleged that the employer discriminated against her because of a pregnancy-related disability by discharging her for leaving a classroom “out of ratio” when she left to use the restroom.  Upon learning of her pregnancy, the worker advised the employer of her previous miscarriage due to frequent urinary tract infections and provided a doctor’s note stating she frequently would need to use the restroom.   During one work day, she was the only individual assigned to a room.  She asked for help so she could use the restroom.  Eventually, a co-worker came to offer coverage so  plaintiff could leave to use the restroom.  Despite that coverage “accommodation”, she was discharged for leaving the classroom “out of ratio” when she left to use the restroom.

Plaintiff filed suit under the ADA and Title VII, but her lawsuit was dismissed under Title VII since there was no showing that men were treated more favorably than this female plaintiff. However, under the ADA a contrary ruling was rendered even though the ADA generally provides that pregnancy is not a disability.  While the condition is not a covered one, related medical conditions may be subject to ADA protection said the trial court. Under many states’ and cities’ fair employment practices laws, a similar denial can be expected.  As such, employers should engage in the interactive process, and seek to provide reasonable accommodation, unless the requested accommodation clearly creates an undue hardship.

Epic Impact: Will the Federal Arbitration Act Preempt Prohibitions on Arbitration of Sexual Harassment Claims?

With the increased attention being paid to the #MeToo movement and the existence of federal law that provides capped remedies and permits mandatory arbitration of sexual harassment claims,, states and cities are enacting legislation to create greater legal rights for sexual harassment claimants  For example, New York recently enacted legislation that, among other things, prohibits enforcement of pre-dispute agreements mandating arbitration of sexual harassment claims.  In the wake of recent U.S. Supreme Court decision in Epic Systems Corp. v. Lewis, one might wonder: Is the prohibition of voluntary arbitration agreements preempted by the Federal Arbitration Act?

In Epic, the Court reiterated that the Federal Arbitration Act (“FAA”) was enacted in response to the reluctance of some courts to enforce pre-dispute arbitration agreements. In its ruling, the U.S. Supreme Court reiterated that it is recognized law that courts must “rigorously [] enforce arbitration agreements according to their terms, including terms that specify with whom the parties choose to arbitrate their disputes and the rules under which that arbitration will be conducted.”  With this in mind, it is unclear whether state legislation, such as the one passed in New York prohibiting arbitration agreements, would be preempted by the FAA.  In other words, it is possible that the federal FAA and long standing court precedent favoring arbitration might override state law attempts to bar parties from agreeing to arbitrate.

We expect that there will be litigation challenging the New York law (and legislation in other states), which will focus on the pre-emption issue, i.e., can a nonfederal law override the FAA? For that reason, we suggest that employers consider back-up contractual jury trials waivers (covenants that are dependent upon state law and state court rulings).

Washington Law Limits Employer’s Right to Plaintiff’s Medical Records in Discrimination Cases

Effective June 7, 2018, employers defending claims brought under Washington’s Law Against Discrimination are constricted in their ability to obtain a plaintiff’s medical records, and are entitled to do so only if the plaintiff: (1) alleges a specific diagnosable physical or psychiatric injury as a proximate result of the defendant’s alleged conduct; (2) relies on the records or testimony of a health care provider or expert to support a claim for damages; or, (3) alleges failure to accommodate a disability or discrimination based on disability.   Absent any of the above, the records will be considered privileged and not subject to disclosure.  Further, even if one of the exceptions does apply, the law limits the available disclosure only to records relating specifically to the diagnosable injury or disability specifically at issue in the litigation, and, unless the court finds “exceptional circumstances,” to records created in the two (2) year time period before the alleged unlawful conduct occurred.

This new Law will severely limit the ability to explore the plaintiff’s pre-existing medical and mental health conditions. Consequently, it will limit the ability of defense counsel to argue that other issues in the plaintiff’s life (as opposed to the employer’s actions) may be the reason for a diagnosed mental health condition.  Ultimately, without this information, juries likely would award a higher amount of compensatory damages.

New Maryland Law Prohibits Arbitration Agreements for Sexual Harassment Claims, Requires Reporting of Sexual Harassment Settlements

Recently, Maryland’s Governor signed the “Disclosing Sexual Harassment in the Workplace Act,” becoming the most recent state to enact tougher sexual harassment laws in the wake of the #MeToo movement.  The Act, which will go into effect on October 1, 2018, prohibits employers from including in any agreement, policy, or contract a provision that waives any “substantive or procedural right or remedy” for claims of sexual harassment or retaliation for reporting sexual harassment, effectively barring employers from requiring employees to arbitrate these claims.  The Act also prohibits employers from retaliating against any employee who refuses to enter into an agreement that contains such a waiver.

Moreover, Maryland employers with 50 or more employees will be required to file a report with the Maryland Commission on Civil Rights no later than July 1, 2020 (and again on July 1, 2022) listing: 1) the number of settlements made by the employer after an allegation of sexual harassment; 2) the number of times the employer has settled allegations of sexual harassment made against the same employee; and, 3) the number of settlements of sexual harassment that contained non-disclosure or confidentiality provisions.  The Commission will compile the data and make each employer’s specific submission (including employer identity) available for public inspection upon request.