By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  After an employer circulated a letter to 146 employees discussing an employee’s EEOC Charge that alleged discrimination on the basis of his disability in violation of the ADA, a federal district court in Connecticut denied both parties’ motions for summary judgment.

This ruling provides valuable lessons for employers on the risks of widespread internal communication regarding pending EEOC charges.

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In EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-1416, 2017 U.S. Dist. LEXIS 133918 (D. Conn Aug. 22, 2017), a Day & Zimmerman NPS, Inc. (“DZNPS”) employee filed a charge with the EEOC alleging that DZNPS violated the ADA by denying him a reasonable accommodation.  As part of its investigation of the Charge, the EEOC sought information from DZNPS, including the names and contact information of other DZNPS employees.  Prior to providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 employees that identified the Charging Party by name, and noted that he had filed a charge of discrimination with the EEOC.  The EEOC alleged that by sending the letter, DZNPS retaliated against the employee for filing a charge with the EEOC in violation of the ADA and interfered with the Charging Party and letter recipient employees’ exercise and enjoyment of rights protected by the ADA.

As we previously blogged about here, the Court previously denied DZNPS’s motion to dismiss.  After the EEOC filed a motion for partial summary judgment on its interference claim under the ADA, and DZNPS filed a motion for summary judgment as to the Complaint in its entirety, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied both parties’ motions for summary judgment.

For employers considering whether to communicate internally about the pending EEOC charges, this ruling illustrates they should be careful to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

Case Background

In or around the fall of 2012, DZNPS hired 147 temporary electricians, including the Charging Party, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”).  Id. at *4.  After the Charging Party began training for the position, he provided a doctor’s note to a DZNPS representative indicating that he could not work around radiation.  The note requested a reasonable accommodation.  After receiving the doctor’s note and the request for a reasonable accommodation, DZNPS terminated the Charging Party’s employment.

In October 2012, the Charging Party filed a charge of discrimination with the EEOC, alleging that DZNPS failed to accommodate his disability reasonably and unlawfully terminated his employment.  Id. at *5.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  Id. at *6-7.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator, and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.

The EEOC moved for partial summary judgment on its interference claim under the ADA.  DZNPS moved for summary judgment as to the Complaint in its entirety, arguing that: (1) the EEOC’s legal theories would violate DZNPS’s free speech rights under the First Amendment of the United States Constitution; (2) that the June 2014 letter is protected by the litigation privilege under Connecticut law; (3) that the EEOC cannot, as a matter of law, make out a claim for retaliation under the ADA; (4) that the EEOC cannot, as a matter of law, make out a claim for interference under the ADA; and (5) that the EEOC lacks standing to bring this case under Article III of the United States Constitution.

The Court’s Decision

The Court denied both parties’ motions for summary judgment.  First, the Court rejected DZNPS’s claim that the EEOC lacked Article III standing to bring the case because no punitive or compensatory damages were available to the EEOC.  Id. at *13-14.  The Court noted that DZNPS cited to no legal authority supporting that proposition.  DZNPS also argued that if the Court found that its sending of the letter was either retaliation or interference in violation of the ADA, then the Court would be establishing a content and speaker-based restriction on speech that violated the First Amendment.  The Court rejected this argument on the basis that DZNPS identified no authority supporting its argument that the First Amendment protects speech from a defendant if that speech gives rise to liability under the ADA or other employment discrimination statutes.  Id. at *16-19.  Further, after analyzing Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), and subsequent cases interpreting Gulf Oil, the Court held that the Gulf Oil line of cases did not prevent courts from imposing restrictions on employer communications in situations where those communications could amount to “coercion” or prevent employees from exercising their rights.  Id. at *20-22.

Turning to the ADA retaliation claim, DZNPS argued that there was no genuine dispute of material fact that the EEOC would not be able to establish the third and fourth prongs of the prima facie case of retaliation under the ADA, either an adverse employment action or a causal connection between the protected activity and the adverse employment action.  Id. at *26-28.  DZNPS also argued that, even if the EEOC showed a genuine dispute of material fact as to the prima facie case for retaliation, the EEOC did not rebut DZNPS’s legitimate non-retaliatory reasons for sending the letter.  The Court found that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable factfinder could determine that such conduct constitutes an adverse employment action.  In regards to DZNPS’s proffered legitimate, non-discriminatory reason for sending the letter, to “minimize business disruption” and notify the recipients that DZNPS had disclosed their “home telephone numbers and addresses . . . to the EEOC,” the Court found that a reasonable jury could also conclude that DZNPS’s explanation was pretextual because the letter did not need to explain that recipients need not speak to the EEOC investigator and that counsel for DZNPS could be present if the recipient chose to speak to the EEOC.  Id. at *34.

Finally, the Court addressed both parties’ motion for summary judgment on the ADA interference claim.  Id. at *35-39.  The EEOC argued that DZNPS interfered with the rights under the ADA of all the letter recipients because a reasonable jury would need to conclude that the letter had a tendency to chill recipients from exercising their rights under the ADA.  Citing its previous order denying DZNPS’s motion to dismiss, where the Court held that the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA, the Court found that a reasonable jury could conclude that the letter could have the effect of interfering with or intimidating the letter’s recipients with respect to communicating with the EEOC about possible disability discrimination by DZNPS.  Accordingly, explaining that because this question should be reserved for the jury, the Court denied both parties’ motions for summary judgment.

Implications For Employers

For employers considering whether to internally disclose information on a widespread basis regarding charges of discrimination filed by employees, this ruling should serve as a cautionary tale.  Further, it illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of motions for summary judgment.  As such, employers should exercise caution when considering when and to whom it should internally disclose information about pending administrative charges.

Readers can also find this post on our EEOC Countdown blog here.

gavel on white backgroundBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Alex W. Karasik

Seyfarth Synopsis:  A federal district court in Illinois recently granted the EEOC’s motion for partial summary judgment in EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), relative to two defenses advanced by an employer, including: (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer. The ruling should be required reading for any employer facing or engaged in litigation with the Commission.

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An increasingly common issue in EEOC litigation against employers involves the scope of the Commission’s lawsuits as related to the charges of discrimination, as well as the EEOC’s conciliation efforts, or lack thereof.  In EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), the EEOC moved for partial summary judgment regarding two defenses enumerated by the defendant, Dolgencorp, LLC (“Dollar General”): (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer.  On April 10, 2017, Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois granted the EEOC’s motion for partial summary judgment as to these defenses asserted by Dollar General.

As Judge Wood acknowledged, many courts across the country have embraced defenses asserted by employers relating to the sufficiency of the EEOC’s investigation.  However, this ruling demonstrates that not all courts may be as receptive to those arguments.

Case Background

Two former Dollar General employees filed charges of discrimination with the EEOC regarding Dollar General’s allegedly discriminatory use of criminal background checks in hiring and firing determinations.  Id. at 1.  The EEOC investigated and determined that there was reasonable cause to believe that Dollar General had engaged in employment discrimination on the basis of race. The parties then engaged in written and oral communications regarding the alleged discrimination, which did not result in a conciliation agreement acceptable to the EEOC.  Id. at 2.  Thereafter, the EEOC brought a lawsuit against Dollar General under Title VII.

Amongst its enumerated defenses, Dollar General asserted that the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation (its 7th enumerated defense), and that the EEOC failed to satisfy the statutory precondition for bringing suit when it failed to conciliate with Dollar General (its 8th enumerated defense). The EEOC moved for partial summary judgment as to Dollar General’s two enumerated defenses.  Id. at 3. The EEOC contended that, on the undisputed facts, these two defenses failed as a matter of law.

The Court’s Decision

The Court granted the EEOC’s motion for partial summary judgment regarding Dollar General’s two enumerated defenses.  Dollar General’s seventh enumerated defense relied upon two separate propositions: first, the EEOC’s claims were barred because they went beyond the claims delineated in the charges of discrimination that generated the EEOC’s lawsuit; and second, the EEOC’s claims were barred because the EEOC failed to investigate those claims adequately prior to bringing suit.  Id. at 4.  The Court rejected the first proposition, holding that when the EEOC files suit, it is not confined to claims typified by those of the charging party, and further, that any violations that the EEOC ascertains in the course of a reasonable investigation of the charging party’s complaint are actionable.  Id.  As to the second proposition, the Court similarly opined that the Seventh Circuit has held that if courts may not limit a suit by the EEOC to claims made in the administrative charge, they likewise cannot limit the suit to claims that are found to be supported by the evidence obtained in the Commission’s investigation.  Id.  Accordingly, the Court rejected Dollar General’s defenses insofar as it sought to dismiss the EEOC’s claims because they went beyond the charges of discrimination or because they were not subject to an adequate pre-suit investigation.  Id. at 4-5.

In addition, the Court addressed Dollar General’s eighth enumerated defense, which contended that the suit could not go forward because the EEOC did not satisfy its pre-suit statutory obligation to conciliate.  The EEOC sent two Letters of Determination to Dollar General that stated that the EEOC found reasonable cause to believe that Dollar General engaged in discrimination in violation of Title VII because, through application of its background check policy, a class of African-American applicants and employees were not hired, not considered for employment, or discharged.  Dollar General argued that this notice of the charge was not specific enough because it failed to identify the persons allegedly harmed and to identify the allegedly discriminatory practice.

Rejecting Dollar General’s argument regarding the specificity of notice, the Court held that the EEOC’s letters clearly set forth that there were African-American applicants and employees who were harmed by the allegedly discriminatory practice.  Id. at 6.  Further, the Court opined that as the Seventh Circuit has explained, the sufficiency of the EEOC’s investigation was not a matter for the judiciary to second-guess.  Dollar General also argued that the EEOC failed to specifically describe the allegedly discriminatory practice, and that merely pointing to the background check policy was not sufficient.  The Court rejected this argument, holding that the EEOC’s notice was sufficient since it identified the two complainants and further put Dollar General on notice that the EEOC’s allegations related to African-American applicants and employees that were not hired, not considered for employment, or discharged due to failing a background check.  Id. at 8-9.

Finally, Dollar General contended that the EEOC’s conciliation discussions were inadequate because the EEOC did not provide Dollar General with an opportunity to remedy the allegedly discriminatory practice.  Id. at 9.  Citing Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1655-56 (2015) (which we analyzed here), the Court refused to examine the sufficiency of the EEOC’s investigation, noting it was beyond the scope of its review.  Id.  The Court thus rejected Dollar General’s argument that the EEOC did not adequately engage the employer in conciliation discussions.

Accordingly, the Court granted the EEOC motion for partial summary judgment on Dollar General’s seventh and eighth enumerated defenses.

Implications For Employers

While the Court did not find in the employer’s favor, other courts have routinely held the EEOC accountable in instances where it did not fulfill its pre-suit obligations.  With rulings such as this one, it can be expected that the EEOC will continue to test courts’ willingness to force the Commission to abide by its statutory duties under Title VII.  As such, employers should continue to be aggressive in attacking instances where the EEOC improperly expands its lawsuits beyond charges or fails to conciliate.

Readers can also find this post on our EEOC Countdown blog here.

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On February 9, 2017, Seyfarth Shaw hosted a signal event regarding workplace class action litigation in 2016 and the implications for employers looking to anticipate and prepare for workplace trends in 2017.

Vickie Lipnic, the newly appointed Acting Chair of the Equal Employment Opportunity Commission, joined Jerry Maatman in launching Seyfarth’s 2017 Workplace Class Action Litigation Report. Vickie has been a Commissioner with the EEOC since 2010 and her knowledge of the focal points of the government agency tasked with enforcing employee civil rights offered guests a great deal of insight. The EEOC has been increasingly committed to systemic litigation and, while these types of cases are intended to have a broad impact, Vickie stressed the importance of single plaintiff litigation and the impact that single plaintiff lawsuits can have on an industry, company, or geographic area. Vickie also opined on the importance of bi-partisanship as a Commissioner. She is the one remaining Republican-appointee on the Commission with Democratic-appointee Jenny Yang, her successor as Chair of the EEOC, whose term is ending July 1, 2017. Vickie noted that there are currently 2 seats open on the Commission, and President Trump will be tasked with appointing two new Commissioners as well as filling the currently vacant General Counsel position. With regard to these shifting positions and the new Presidential administration, Vickie confirmed that the EEOC is steadfast in its mission to protect and enforce the civil rights of all employees and to ensure that employers are readily prepared to adhere to the laws protecting their employees from discriminatory practices.

Additionally, Jerry discussed the six key trends in workplace class action litigation for 2016 and how those trends will impact employers in 2017. First is the impact of the U.S. Supreme Court decisions in Tyson Foods, Inc. v. Bouaphakeo, et al., and Spokeo, Inc. v. Robins, et al., and how they will influence complex employment-related litigation in the coming years.  Equally important for the coming year, the Supreme Court has accepted five cases that are likely to be decided in 2017 that also will impact and shape class action litigation and government enforcement lawsuits faced by employers; chief among them is the issue of the legality of class action waivers in arbitration agreements. In terms of settlements in 2016, after reaching all-time highs in 2014 and 2015, the monetary value of aggregate top-ten employment class action settlement declined significantly overall, but wage & hour class action settlements sky-rocketed.  Another trend for 2016 was that federal and state courts issued more favorable class certification rulings for the plaintiffs’ bar than in past years. Plaintiffs, for instance, secured certification in 76% of the time in wage & hour class and collective actions. However, for the first time in over a decade, case filing statistics for 2016 reflected that wage & hour litigation decreased over the past year. Additional factors set to coalesce in 2017 – including litigation over the new FLSA regulations and the direction of wage & hour enforcement under the Trump Administration – are apt to drive these exposures for Corporate America. To the extent that government enforcement of wage & hour laws is ratcheted down, the private plaintiffs’ bar likely will “fill the void” and again increase the number of wage & hour lawsuit filings. Also in 2016, Plaintiffs’ attorneys were extremely successful in certifying first stage conditional certification motions, which can mean filings are likely to go up in 2017.  Finally, the government enforcement lawsuits brought by the DOL and EEOC continued the aggressive litigation programs of both agencies, but by sheer number, lawsuit filings and recoveries were lower when compared to previous years.

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Thank you to Victoria for visiting us in Chicago for this hugely successful event. We hosted over 150 guests at our Seyfarth Shaw Chicago office and over 1,800 guests via our live Webcast.

Thank you to everyone who joined us either here in Chicago or via our live webcast. For those interested in viewing a video of the presentation, stay tuned. We will be posting a complete video of the event next week.

Readers can find more information about the event on Seyfarth’s Pay Equity Issues & Insights Blog here.

Additionally, if you have not yet registered for the upcoming WCAR webinar, you can do so by clicking here.

th9L3810CUSeyfarth Synopsis: Following a major victory for an airline-industry employer over the EEOC in a Title VII action regarding religious accommodations, the Court denied the EEOC’s motion for a new trial. The decision is a blueprint for employers on turning the tables on the Commission’s litigation tactics.

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After the EEOC brought an action alleging that airplane cabin cleaning company JetStream Ground Services, Inc. (“JetStream”) refused to hire five Muslim women due to their request to wear religious clothing, a jury in the U.S. District Court for the District of Colorado ruled in favor of JetStream following a 14-day trial.  After the EEOC moved for a new trial, in EEOC v JetStream Ground Services, Inc., Case No. 13-CV-02340 (D. Colo. Nov. 3, 2016), Judge Christine M. Arguello of the U.S. District Court for the District of Colorado denied the EEOC’s motion.

While this employer victory over the EEOC is encouraging, employers should nonetheless be cognizant of how employee requests to wear religious clothing at work can potentially affect their business in the Title VII litigation context.

Case Background

In a high-profile case that we have blogged about extensively here and here, five Muslim females who worked as cabin cleaners applied for and were denied cabin cleaning positions with JetStream after the company assumed the contract of the women’s former employer.  Id. at 1-2.  The women alleged that JetStream refused to hire them for discriminatory reasons after they requested to cover their heads with a hijab and wear long skirts for religious purposes.  They also alleged that JetStream retaliated against employees and applicants who wore hijabs for engaging in protected activity in seeking a religious accommodation for their clothing and/or for complaining about discrimination.

On summary judgment, the Court ruled that the former employees had met their burden to show that hijabs that were tucked into a shirt and secured to an employee’s head presented no safety problems, thus holding that accommodating such hijabs posed no undue hardship for JetStream.  Id. at 2.  However, the Court also found that JetStream had presented sufficient evidence to create a disputed issue of fact as to whether it would pose an undue hardship for JetStream to permit its cabin cleaners to wear long skirts while working.  After the parties disputed the type of expert testimony that would be allowed, the EEOC ultimately withdrew several claims while JetStream agreed not to use certain experts, thus leaving only the hijab accommodation claims for trial.

On April 29, 2016, after a fourteen-day jury trial, the jury found in favor of JetStream and against the EEOC.  Id. at 3.  Thereafter, under Rules 59 and 60, the EEOC brought a motion for a new trial, arguing it was justified for several reasons including: (1) evidence regarding safety hazards was confusing and distracting to the jury, and was designed to incite jurors’ fear and prejudice of Muslims; (2) new evidence was disclosed at trial; (3) JetStream’s counsel committed misconduct throughout the trial; (4) the Court erred in denying sanctions for the destruction of evidence; and (5) the Court erred in deciding not to allow the EEOC to use a juror questionnaire prior to trial and in denying the EEOC’s motion to strike two jurors for cause.

The Decision

The Court denied the EEOC’s motion for a new trial.  Addressing the relevant legal standard under Rule 59, the Court noted that only errors that have caused substantial harm to the losing party justify a new trial, and that the verdict must stand unless it is clearly, decidedly, or overwhelmingly against the weight of the evidence.  Id. at 5 (citations omitted).  Regarding Rule 60, the Court opined that relief under this rule is extraordinary and may only be granted in exceptional circumstances.

First, regarding the EEOC’s argument that the introduction of safety-related evidence at trial was confusing, distracting, and prejudicial, the Court held that the EEOC’s failure to object to such statements during the jury trial weighed heavily against granting it relief.  Id. at 16.  Next, the Court similarly rejected the EEOC’s argument that it was prejudiced by new evidence that was introduced at trial, again noting that the EEOC missed its opportunity to object or move to strike.  Id. at 19-20.

The EEOC also claimed it was entitled to a new trial due to the alleged misconduct of JetStream’s attorney, alleging that “defense counsel ‘intentionally exploited the jury’s potential stereotypes about ignorant immigrants,’” and that “defense counsel engaged in ‘personal attacks’ and ‘maligned’ Plaintiffs’ attorneys, in arguing that Plaintiffs would have been working for JetStream but that their attorneys prevented this from happening.”  Id. at 24-27.  The Court rejected these assertions, along with several other allegations of misconduct, again noting the EEOC failed to object or raise any of these issues at trial.  Id. at 28.

Addressing the EEOC’s argument that the Court erred by not sanctioning JetStream for destroying evidence that included a list of employee recommendations made by the company who previously employed the cabin cleaners, the Court found that the EEOC’s motion provided no evidence of bad faith destruction.  Id. at 30.  Finally, the EEOC noting that, “anti-Muslim bias has become increasingly pervasive in American society,” the EEOC argued that the Court erred in denying its motion for a juror questionnaire and failing to strike two jurors.  The Court rejected these arguments, noting that it expanded its customary voir dire procedures in lieu of issuing the questionnaire, and that various sentiments expressed by jurors did not warrant their striking.  Id. at 31-40.  Accordingly, the Court denied the EEOC’s motion for a new trial.

Implications For Employers

This ruling cements a major EEOC defeat.  While the employer was victorious at trial here, other businesses should still be cautioned that juries are unpredictable in EEOC lawsuits  Thus, employers should attempt to minimize exposure to Title VII liability through policies and practices that eradicate discrimination.  With a diverse workforce that includes employees from a wide range of religions, employers must be diligent when considering the reasonableness of any accommodation sought.  Given the recent aggressiveness of the EEOC, employers absolutely need to be proactive in creating and abiding by non-discriminatory policies, or risk ending up in costly litigation.

Readers can also find this post on our EEOC Countdown blog here.

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Seyfarth Synopsis:  The EEOC sued an employer for Equal Pay Act violations, claiming that Maryland Insurance Administration failed to pay three female fraud investigators the same wages as comparable male fraud investigators. On cross motions for summary judgment, the U.S. District Court for the District of Maryland denied the EEOC’s motion and granted summary judgment in favor of the employer. Although there was a pay disparity between the female investigators and the male comparators, the Court determined that reasons other than gender justified this difference. The Court also rejected the EEOC’s use of comparators with different job duties but whose positions fell within the same pay grade classification. The ruling is important for employers in the wake of the EEOC’s focus on Equal Pay Act issues.

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In E.E.O.C. v. Maryland Insurance Administration, No. 15-CV-1091 (D. Md. Oct. 11, 2016), the EEOC filed a complaint on behalf of three female fraud investigators who claimed that they were paid less than their male counterparts in violation of the Equal Pay Act of 1963, 29 U.S.C. §206(d)(1).  On cross motions for summary judgment, the Court denied the EEOC’s motion and granted summary judgment in favor of the employer. At the end of the day, the Court concluded that the EEOC had failed to show that any pay disparity was attributed to gender, observing that all of the comparable males were initially hired at a more senior level due to their weightier work experience. The  Court further rejected the EEOC’s use of comparators with different job duties but whose positions fell within the same pay grade classification

This ruling, which cites no authority and is under three pages, demonstrates that federal judges will be quick to swat down equal pay claims where the evidence indicates a non-gender-based reason for a pay disparity or when the job duties of alleged comparators are not apples-to-apples. Employers, therefore, can take some comfort in the fact that a pay disparity and broad classifications alone do not expose them to liability.

Case Background And Decision

Three fraud investigators, Alexandra Cordaro, Marlene Green, and Mary Jo Rogers, were hired in 2009, 2010, and 2011, respectively, by the Maryland Insurance Administration. Id at 1. The EEOC claimed that the employer discriminated against these women on the basis of their gender because it paid a higher salary to four other male fraud investigators (Bruno Conticello, Homer Pennington, James Hurly, and Donald Jacobs).

The EEOC and the employer both moved for summary judgment and, after briefing, the Court denied the EEOC’s motion and granted the employer’s motion  In granting summary judgment for the employer, the Court determined that “as to all of the comparable male employees to which the EEOC points, reasons other than gender justified the pay disparity between them.” Id. at 2.

Specifically, the Court explained that, even though the comparable male employees worked as fraud investigators, they were all “hired at higher steps than were Cordaro, Green, and Rogers.” Id. The Court, for example, noted that the male employees were hired at Steps 6 and above, while the female employees were hired at Steps 4 and 5. The Court observed that this, in turn, was because the male employees had more experience in working for the State, either in law enforcement or within the Administration itself. The female employees, in contrast, did not have prior State or law enforcement experience. Id. As a result, the Court concluded that these differences in prior work experience justified the pay disparity.

The Court was also critical of the other male comparators that the EEOC offered because they did not work in the same unit as the females who were allegedly underpaid. These employees worked as enforcement officers, not fraud investigators. Although the EEOC argued that these two positions were the same because they were similarly classified as “Grade 16,” the Court disagreed. Based on testimony that workers in these two positions did not perform the same job, the Court determined that these employees were not appropriate comparators. Id. at 2. Importantly, the Court explained that performing the same job was the “touchstone of the analysis under the EPA.” Id.  Crucial to the Court’s determination, therefore, was the substance of the position, not the classification. Indeed, the Court reasoned that “[t]he mere fact that jobs were reclassified . . . does not ipso facto establish a violation of the EPA.” Id. at 3. The Court additionally found these comparators inappropriate based again on their hiring level and previous experience, both of which were distinguishable from plaintiffs. Based on these factors, the Court denied the EEOC’s motion for summary judgment and granted summary judgment in favor of the defense.

Implication For Employers

This decision reaffirms the principal that pay disparity alone is not enough to give rise to liability under the Equal Pay Act. Employers are free to continue to make salary determinations based on non-gender based reasons, like prior work experience.

This ruling also demonstrates that when deciding whether two employees are comparable, it is the substance of the position that counts — not a broader classification. The fact that two positions with different job functions may fit within a similar pay grade or other designation does not alone demonstrate that the jobs are the same for purposes of the EPA. Employers, nevertheless, should take care to track differing job duties that fall under the same general classification since the EEOC continues to attempt to use these classifications as a way to manufacturer comparators.

Readers can also find this post on our EEOC Countdown blog here.

 

medical-1006787_960_720Seyfarth Synopsis: In an ADA action regarding disability discrimination, the Fifth Circuit reversed a District Court’s grant of summary judgment in favor of the employer and against the EEOC, noting that even though the charging party indicated she had a temporary total disability on a disability insurance claim form that she submitted the day after her termination, factual issues remained regarding the availability of a reasonable accommodation. The ruling underscores the nature and challenge of EEOC litigation of ADA claims.
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In an ADA disability discrimination action brought by the EEOC on behalf of a nurse against her employer healthcare facility, the U.S. District Court for the Southern District of Mississippi entered summary judgment in favor of the employer after finding that the charging party was not able to perform her job duties in light of the fact that she described herself as “totally disabled” when making a disability insurance claim. Following the Commission’s appeal in EEOC v. Vicksburg Healthcare, L.L.C., No. 15-60764 (5th Cir. Oct. 12, 2016), the Fifth Circuit reversed and remanded the District Court’s grant of summary judgment, holding that the employee’s claim to temporary total disability, made the day after she was terminated from her job because of a disability, did not prevent the EEOC from contending that she was able to work if granted a reasonable accommodation.

For employers engaged in EEOC disability discrimination litigation under the ADA, in particular with employees alleging “total disability” on subsequent disability insurance claims, this ruling illustrates that such claims of “total disability” do not foreclose the possibility that a reasonable accommodation could have been provided.

Case Background

As we discussed in previous blog posts about this case here, here, and here, the charging party was a nurse for Vicksburg Healthcare, LLC d/b/a River Region Medical Center (“River Region”). Id. at 1-2. After the nurse tore her rotator cuff and took twelve weeks of FMLA medical leave for shoulder surgery, her physician sent a note to River Region stating that she could return to duty as long as she was limited to “light work” requiring “limited use” of her left arm. Her physician further clarified that she should not lift, pull, or push anything weighing more than ten pounds. After review of these limitations, River Region terminated the nurse because of her injury and concomitant inability to perform at work. Id. at 2.

The nurse applied for temporary disability benefits the next day, indicating on her claims forms that she was temporarily totally disabled. Thereafter, the EEOC filed suit in 2012, alleging that River Region violated the ADA by failing to provide the nurse a reasonable accommodation and by terminating her. After discovery, River Region moved for summary judgment. The District Court granted River Region’s motion for summary judgment, noting that the claims were barred under Cleveland v. Policy Management Systems Corp., 526 U.S. 795 (1999), since the EEOC failed to provide a “sufficient explanation for the contradicting statements” between the nurse’s claim of temporary total disability and the EEOC’s contention that she was “qualified” for purposes of the ADA because she could perform the job with a reasonable accommodation. The EEOC appealed the grant of summary judgment in favor of the employer. Id. at 3.

The 5th Circuit’s Decision

The Fifth Circuit reversed and remanded the District Court’s grant of summary judgment. The Fifth Circuit initially discussed how according to the District Court, “this case has one key fact: the day after her termination, [the nurse] filed for disability benefits and, in doing so, represented that she was temporarily totally disabled.” Id. Citing Cleveland, the Fifth Circuit explained that an ADA suit claiming that the plaintiff can perform her job with reasonable accommodation may well prove consistent with a disability benefits claim that the plaintiff could not perform her own job (or other jobs) without it. Id. at 4. The Fifth Circuit held that the District Court erred by failing to recognize that the EEOC’s argument that, “nothing in the [disability claim forms] indicate[d] that [the nurse] represented that she was unable to perform the essential functions of her job with or without an accommodation,” was sufficient under Cleveland. Id. at 4-5.

The Fifth Circuit also rejected River Ridge’s contention that it twice offered the nurse a reasonable accommodation in the form of clerical work, but that she ignored or rejected the offers. Id. at 5-6. After the nurse declined the offer on the advice of her doctor, River Ridge argued that the offer had remained open. The Fifth Circuit rejected this assertion, noting that the EEOC had shown that the conduct of the parties around the time of the nurse’s termination was circumstantial evidence that there was no actionable offer for the nurse to accept in regards to a light-duty clerical position. The Fifth Circuit also accepted the EEOC’s argument that the second offer was never made. Id. at 6.

River Region contended that the nurse never requested “light duty” as a reasonable accommodation. Id. The Fifth Circuit held this argument was meritless, noting that the nurse presented doctor’s certifications clearing her to work with a “light work” restriction and instructions indicating “[n]o lifting, no pulling, no pushing anything greater than 10 pounds.” Id. The Fifth Circuit found that a jury could reasonably view the certifications as a request for a “light duty” accommodation. Id.

Finally, River Region contended that “light duty” was inconsistent with the essential functions of the nurse’s duties since lifting or pushing more than ten pounds were essential functions of her job. Id. The Fifth Circuit rejected this argument, noting it was “hard to square with River Region’s claims that it could have and would have accommodated [the nurse] by giving her clerical work during her recovery.” Id. Citing the parties’ contradictory proffered testimony about the essential functions of nursing duties and further noting that written job descriptions do not warrant absolute deference, the Fifth Circuit held that fact issues precluded summary judgment. Id. at 7. Accordingly, the Fifth Circuit reversed and remanded the District Court’s grant of summary judgment, holding that the employee’s claim to temporary total disability, made the day after she was terminated from her job because of a disability, did not prevent her from contending that she was able to work if granted a reasonable accommodation. Id. at 8.

Implications For Employers

It is not uncommon for a terminated employee to indicate on a disability insurance claim that they are “totally disabled.” Regarding EEOC litigation brought under the ADA, this ruling illustrates that employee claims of “total disability” for insurance purposes do not necessarily mean that employers are automatically unable to provide a reasonable accommodation. As such, employers cannot definitively rely on statements made in disability insurance claims when seeking summary judgment in ADA litigation brought by the EEOC. Employers must continue to exercise caution when approaching any and all requests for reasonable accommodations.

Readers can also find this post on our EEOC Countdown blog here.

thKCD34Y33By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In an EEOC religious discrimination case, a federal court found that “Onionhead” was a religion for purposes of Title VII.   The court also found that the EEOC did not fail to meet its Title VII pre-suit duties when it added to its lawsuit seven additional claimants that it discovered during its investigation of charges brought by three former employees of the company that was accused of religious discrimination.

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While most religious discrimination claims brought by the EEOC involve mainstream religions, uncommon spiritual belief programs may still be afforded protection under Title VII so long as they meet certain legal requirements. In EEOC v. United Health Programs of America, Inc. and Cost Containment Group Inc., No. 14-CV-03673 (E.D.N.Y. Sept. 30, 2016), the EEOC brought an action alleging an employer (“CCG”) discriminated against a group of former employees on the basis of religion by based on concepts known as “Onionhead” and “Harnessing Happiness.”  Judge Kiyo A. Matsumoto of the U.S. District Court for the Eastern District of New York granted the EEOC’s motion for partial summary judgment as to the discrete issue of whether these beliefs constituted a religion, while granting in part and denying in part CCG’s motion for summary judgment as to several other claims.  Most relevant, the Court denied CCG’s motion for summary judgment regarding the EEOC’s late addition of seven claimants that it discovered during its investigation of the three original charges of discrimination.

This ruling puts employers on notice that they must exercise extreme caution regarding spiritual beliefs in the workplace, even if the beliefs are not derived from a mainstream religion.  Further, it illustrates that employers have an uphill battle when challenging the EEOC’s pre-suit investigations as courts will not closely scrutinize such efforts.

Case Background

CCG is small wholesale company that provides discount medical plans.  Beginning around 2007, CCG executives determined that their corporate culture was deteriorating.  To fix this issue, CCG hired its CEO’s aunt, who had developed a program called Onionhead that CCG began to utilize in its workplace.  CCG described Onionhead as a multi-purpose conflict resolution tool, while plaintiffs characterized it as a system of religious beliefs and practices.  Although Onionhead was initially geared towards children, CCG expanded the program to apply it to adults, and it further became known as “Harnessing Happiness.”

The claimant employees alleged that Onionhead and Harnessing Happiness required to them do things like use candles instead of lights to prevent demons from entering the workplace; conduct chants and prayers in the workplace; and respond to emails relating to God, spirituality, demons, Satan, and divine destinies.  Id. at 7, 11-12.  The claimants alleged they were terminated either because they rejected Onionhead’s beliefs or because of their own non-Onionhead religious beliefs, while other employees who followed Onionhead were given less harsh discipline.  After three former employees filed charges of discrimination in 2011 and 2012, the EEOC issued a letter of determination on March 13, 2014.  After unsuccessful conciliation efforts, the EEOC filed suit on October 9, 2014 on behalf the three employees who filed charges of discrimination and an additional seven employees that it discovered during its investigation.  The EEOC subsequently moved for summary judgment as to the specific issue of whether Onionhead was a religion for purposes of Title VII.  CCG cross-moved for summary judgment as to several other claims involving religious discrimination.

The Decision

The Court granted the EEOC’s motion for partial summary as to the discrete issue of whether the Onionhead beliefs constituted a religion.  After discussing Title VII’s application to religious discrimination, the Court noted that the former employees asserted claims under a variety of theories, including disparate treatment, hostile work environment, failure to accommodate, and retaliation.  Id. at 15.  First, the Court sought to determine what constitutes a religious belief under Title VII.  Rejecting CCG’s argument that a narrow definition should apply, the Court opined that to determine whether a given set of beliefs constitutes a religion for purposes of Title VII, “courts frequently evaluate: (1) whether the beliefs are sincerely held and (2) whether they are, in [the believer’s] own scheme of things, religious.”  Id. at 23 (quoting Patrick v. LeFevre, 745 F.2d 153, 157 (2d Cir. 1984)).

Applying the Patrick framework here, the Court found that Onionhead qualified as a religion for purposes of Title VII.  Id. at 31-32.  Addressing the first prong, whether the beliefs were sincerely held, the Court noted that, “a reasonable jury could find that by inviting [the CEO’s aunt] into the workplace, paying her to meet and conduct workshops, authorizing her to speak to employees about matters related to their personal lives, disseminating Onionhead/Harnessing Happiness material and directing employees to attend group and individual meetings with [his aunt], [the CEO] and his upper management held sincere beliefs in Onionhead and Harnessing Happiness.”  Id. at 35-36.  As to the second prong, which contemplates whether the nature of the beliefs qualifies as religious, the Court concluded that the beliefs were religious within the meaning of Title VII.  Id. at 36.  In reaching this conclusion, the Court discussed the emails about God, spirituality, Satan, divine destinies, etc.; noted how the CEO’s aunt referred to herself as a “spiritual advisor”; cited claimants’ testimony that they were told to pray in the workplace; and quoted numerous Onionhead publications.  Id. at 36-41.  Accordingly, the Court found that Onionhead was a religion for purposes of Title VII.  Id. at 43.

Next, the Court addressed CCG’s motion for summary judgment as to the individual claims asserted by claimants, which alleged that the EEOC failed to fulfill its Title VII pre-suit investigation, reasonable cause determination, and conciliation requirements for several claimants.  Id. at 43-45.  Noting that, “[c]ourts have permitted the EEOC to add new claimants identified during discovery even when the EEOC is asserting claims under Section 706 of Title VII,” the Court held that given “the circumstances present in the instant case, the EEOC was not precluded from identifying new claimants (whose claims were effectively identical to the claims of the pre-existing claimants) after filing this action.”  Id. at 46-47.  In doing so, the Court rejected CCG’s reliance on EEOC v. CRST Van Expedited Inc., 679 F.3d 657, 674 (8th Cir. 2012), and distinguished on the grounds that “[t]he EEOC’s attempt in CRST to add 67 claimants to an EEOC action filed two years earlier and naming a single individual is a far cry from the situation presented in this action, where the EEOC’s investigation undisputedly encompassed seven of the ten claimants and the additional three claimants’ allegations arise out of the same alleged course of conduct, in the same office, by the same individuals, and during a time period already covered by the charges in the initial complaint.”  Id. at 48-49.  Thus, citing the narrow scope of review courts are permitted when reviewing the sufficiency of EEOC investigations, the Court denied CCG’s request to dismiss the late-discovered claimants.

The Court also discussed at great length CCG’s motion for summary judgment as to multiple reverse discrimination claims.  The Court denied CCG’s motion for summary judgment as to eight claimants’ reverse discrimination claims and all claimants’ hostile work environment claims premised on reverse religious discrimination.  Id. at 101.  Further, the Court denied CCG’s motion for summary judgment with respect to one claimant’s disparate treatment and retaliation claims premised on her Catholicism, but granted CCG’s motion for summary judgment with respect to the same claimant’s hostile work environment and failure to accommodate claims.  Id. at 102.  Finally, the Court granted CCG’s motion for summary judgment against all other claimants on their claims that they suffered discrimination based on claimants’ religious beliefs or lack thereof.  Id. at 102.

Implications For Employers

Whether or not this blog post has caused you to consider a conversion to Onionhead, the implications from this ruling are crucial for employers in two regards.  First, the finding that Onionhead is a religion should put employers on notice that when considering beliefs claimed by an employee and programs implemented by an employer, courts can and will utilize an expansive definition of what constitutes a “religious belief” for purposes of Title VII discrimination litigation.  Second, employers can expect the EEOC to use this ruling to aggressively seek to expand its lawsuits beyond the original complaining employees and try to include any similarly aggrieved employees it uncovers during investigations.  Accordingly, the twofold impact of this ruling should alert employers to expect more aggressive religious discrimination litigation from the EEOC, who will also seek to expand the size of its lawsuits given that its investigations are subject to limited judicial scrutiny.

Readers can also find this post on our EEOC Countdown blog here.

thPBYES7VQSeyfarth Synopsis: After the EEOC brought an action under the Americans With Disabilities Act against an employer who implemented a wellness program requiring employees to take a health assessment to participate, the Court granted the employer’s motion for summary judgment and denied the EEOC’s motion for summary judgment after finding that the program was voluntary. As such, the ruling is a bench-slap to the Commission in terms of its position on challenging wellness programs.

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After an employer in Wisconsin implemented a wellness program that required employees to take a health risk assessment if they wanted to participate, the EEOC brought an action under the Americans With Disabilities Act (“ADA”), which generally prohibits employers from requiring employees to undergo medical examinations.  In EEOC v. Orion Energy Systems, Inc., No. 14-CV-1019 (E.D. Wis. Sept. 19, 2016), Judge William C. Griesbach of the U.S. District Court for the Eastern District of Wisconsin granted in part employer Orion Energy Systems, Inc.’s (“Orion”) motion for summary judgment and denied the EEOC’s motion for summary judgment.

This ruling illustrates that for employers who implement wellness programs that require employees to take a health assessment if they wish to participate, those medical examinations do not violate the ADA as long as the program is voluntary.

Case Background

In 2008, Orion switched from a fully insured health plan to a self-insured health plan.  In 2009, Orion implemented a multi-faceted wellness program.  Relevant here, employees would have to either complete a health risk assessment (“HRA”) at the beginning of the insurance year or pay the entire monthly premium equivalent amount.  Employees who completed the HRA paid no premium equivalent, but still had to pay their own deductibles, co-pays and out-of-pocket expenses.  The HRA consists of a health history questionnaire and biometric screen involving a blood pressure check, body measurements, and blood analysis. Orion did not receive any personally-identifiable information as a result of the HRA, as the information was compiled by outside entities who then transmitted it to Orion in an anonymous format.  The anonymous, aggregated data allowed Orion to see the percentage of participants in its plan who had particular health risks such as high cholesterol, identify common health issues, and offer employees educational tools to improve their health.

In the spring of 2009, only one Orion employee chose to opt-out of the program.  Orion management spoke with the employee regarding negative comments the employee made to co-workers about the amount of the premium being charged by Orion.  The employee claimed she was told during this meeting to keep her opinions about the new wellness program to herself, while Orion claimed that such negativity was not welcome in the workplace, and that if the employee had concerns, she needed to speak with someone in management.  The employee later sent an e-mail criticizing the tactics of Orion’s former CEO.  Shortly thereafter, the employee was terminated.

The EEOC brought suit against Orion alleging it violated the ADA by requiring employees who elect to enroll in Orion’s self-insured health insurance plan to either complete the HRA or pay 100 percent of their monthly premium amount.  The EEOC also alleged that Orion violated the ADA’s anti-retaliation provisions, 42 U.S.C. § 12203(a) and (b), by instructing the employee not to discuss her concerns about the legality of this requirement with co-workers and by terminating her employment shortly after she voiced opposition to Orion’s wellness program.  Orion contended that its requirement that employees who elect to receive health insurance from Orion either participate in the wellness program or pay the full premium amount was lawful under the ADA’s insurance “safe harbor” provision, which allows self-insured organizations to administer benefits plans, or alternatively, that its wellness program is voluntary under 42 U.S.C. § 12112(d)(4)(B).  Both parties moved for summary judgment.

The Decision

The Court granted in-part Orion’s motion for summary judgment and denied the EEOC’s motion for summary judgment.  Initially, the Court explained that Section 12112(d)(4)(A) of the ADA “shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability . . . unless such examination or inquiry is shown to be job-related and consistent with business necessity,” but that Section 12112(d)(4)(B) permits employers to conduct “voluntary medical examinations . . . which are part of an employee health program available to employees at that work site.”  Id. at 6-7.  The EEOC argued that the HRA was not “voluntary” given that Orion shifted 100 percent of the health benefit premium to employees who opted out.  Orion argued its wellness initiative did not violate the ADA for three reasons: (1) the ADA’s safe harbor relating to insurance applied to the challenged aspects of the wellness program; (2) Orion did not “make inquiries” since it received only anonymous, aggregated results from the HRA; and (3) the wellness program was voluntary because Orion’s employees had a choice regarding whether to participate and sufficient time to make that choice.

Regarding the safe harbor provision, the Court rejected Orion’s argument and found that the safe harbor provision did not apply to Orion’s wellness program.  Citing Congressional intent, the Court noted that the safe harbor provision was a limited exception that was created to protect the basic business operations of insurance companies, and that generally, wellness programs are unrelated to basic underwriting and risk classification.  Id. at 15 (citations omitted).  Applied here, the Court found that the wellness program was not used to underwrite, classify, or administer risk.  Id.  The Court explained that “[i]f an employee refused to complete the HRA and participate in the wellness plan, she could still be a member of Orion’s insurance plan, provided she pay the full premium amount. In short, Orion’s wellness program was wholly independent from its insurance plan.”  Id. at 16.

Next, the Court addressed Orion’s argument that even if its wellness initiative was not immune under the safe harbor provision, Orion’s program was still voluntary.  Id. at 17.  The EEOC argued that the wellness program was involuntary because shifting 100 percent of the premium cost to an employee who opted out of a program was so substantial that Orion’s offer to pay the health benefit premium in exchange for the employee’s participation in the program is more than a mere incentive.  The Court rejected the EEOC’s argument, noting that, “even a strong incentive is still no more than an incentive; it is not compulsion,” and that, “Orion’s wellness initiative is voluntary in the sense that it is optional.”  Id. at 18.  Accordingly, the Court found that Orion was entitled to summary judgment and rejected the EEOC’s claim that the wellness program, including the HRA, violated § 12112(d)(4)(A).

Finally, in regards to the EEOC’s retaliation and interference claims, Orion argued that the employee was not engaged in any protected activity by complaining about aspects of the program that were lawful.  The Court rejected Orion’s argument, noting it was “undisputed that [the employee] expressed concern about the confidentiality of her medical information under the new wellness initiative. As that is a legitimate concern under the ADA, i.e., something the ADA actually does govern, her expression may have been protected.”  Id. at 20.  Accordingly, the Court denied Orion’s motion for summary judgment as to the retaliation and interference claims.

Implications For Employers

Employer’s implementing wellness programs absolutely need to pay attention to decisions such as this one.  So long as participation in the program and any accompanying health assessment are truly voluntary, employers can utilize such wellness programs without violating the ADA.  Nonetheless, employers must be cautious in making sure their programs are truly voluntary or else face this risk of EEOC litigation.

Readers can also find this post on our EEOC Countdown blog here.

thVSDVQKXMBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In the remand of the high profile Mach Mining litigation that was before the Supreme Court in 2015, a district court denied the EEOC’s motion for reconsideration of a discovery order pertaining to the scope of the EEOC’s investigation, and denied the EEOC’s motion to amend its complaint to add as defendants seven entities who did not receive actual notice or an opportunity to conciliate.

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After the remand of the Mach Mining litigation from the U.S. Supreme Court, this hallmark case regarding the scope of review of the EEOC’s pre-suit duties under Title VII  is still evolving and shaping the landscape of EEOC litigation.  In EEOC v. Mach Mining, LLC, No. 11-CV-00879 (S.D. Ill. Aug. 22, 2016), Judge Gilbert of the U.S. District Court for the Southern District of Illinois recently denied the EEOC’s motion for clarification or reconsideration of a prior discovery order, while granting in part and denying in part the EEOC’s motion to amend its first amended complaint by adding several entities as defendants.

It is imperative that employers facing Title VII lawsuits brought by the EEOC follow this game-changing litigation, which provides insight into how the EEOC’s compliance with its pre-suit conciliation obligations shapes the parameters of EEOC litigation.  For further analysis of the Supreme Court’s decision and subsequent proceedings, check out our previous blog posts here and here.

Case Background

The EEOC brought suit on behalf of a class of female applicants who had applied for non-office jobs at Mach Mining.  Id. at 1.  The EEOC claimed that Mach Mining had never hired a single female for a mining-related position and did not even have a women’s bathroom on its mining premises.  The complaint alleged that Mach Mining’s Johnston City, Illinois, facility engaged in a pattern or practice of unlawful employment practices since at least January 1, 2006, in violation of Title VII, by engaging in sex discrimination.

In its answer, Mach Mining asserted the affirmative defense that the EEOC failed to conciliate in good faith.  The issue was ultimately resolved before the U.S. Supreme Court, which held “that a court may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit. But we find that the scope of that review is narrow, thus recognizing the EEOC’s extensive discretion to determine the kind and amount of communication with an employer appropriate in any given case.”  Id. at 2 (quoting Mach Mining, LLC v. EEOC, 135 S.Ct. 1645, 1649 (2015)).

Following the Supreme Court’s decision, Mach Mining filed a renewed motion for partial summary judgment, which the Magistrate Judge denied.  Mach Mining then filed a motion for a protective order requesting that the Court preclude the EEOC, “from conducting discovery related to Mach’s relationship with other entities — entities which EEOC failed to include in the investigation and conciliation stage that prompted this action.”  Id. at 2.  Following a hearing, the Magistrate Judge denied Mach Mining’s motion for a protective order, and Mach Mining filed Rule 72 objections to the order.

Per Rule 72, the Court found that the ruling was not clearly erroneous or contrary to law.  However, the Court sua sponte reconsidered the motion and granted in part Mach Mining’s motion, finding that “[t]he EEOC had the opportunity to request any and all documents — including those on related entities —during its investigation of Mach Mining.  There are no allegations that Mach Mining failed to cooperate with that investigation or that Mach Mining did not disclosure all requested information. As such, the EEOC has had ample opportunity to seek information and include any related entity in its investigation of Mach Mining.”  Id.  Thus, in its January 21, 2016 order, the Court limited the EEOC from seeking discovery beyond the entities named in its Letter of Determination.

Thereafter, the EEOC moved for clarification or reconsideration of that order.  Prior to hearing arguments, the Court noted that the January 21, 2016 order did not intend to bar the EEOC from seeking discovery from any third party that may have relevant information pertaining to any issue in this matter.  Id. at 3.  Rather, the Court explained that the holding of the January 21, 2016 order was that the EEOC was barred from additional discovery for the purpose of adding parties where no notice and attempt at conciliation had been made.

The Court’s Decision

The Court denied the EEOC’s motion for clarification or reconsideration of the January 21, 2016 order.  The EEOC argued that Mach Mining had, “a web of complex corporate relationships” and that Mach Mining did not have physical control over the mining location and/or physical facilities.  Id. at 4.  These facilities are owned by other entities from whom the EEOC was attempting to obtain discovery.

The Court explained that it did not seek to bar discovery from property owners and that the EEOC was free to seek discovery from third parties.  Nonetheless, the Court noted that “such discovery is limited to Mach Mining’s hiring/firing and/or lack of female facilities. EEOC can conduct any discovery with regard to the merits of this case and/or discovery to third parties for legitimate purposes. The only discovery that was barred was discovery with regard to adding defendants that have not had notice and an opportunity for conciliation.”  Id. at 4.  As a result, the Court concluded that, “there is no basis for the Court to reconsider its January 21, 2016, ruling.”  Id.

Thereafter, the Court granted in part the EEOC’s motion to amend the complaint.  The EEOC argued that it should be permitted to add as defendants two entities named in the Letter of Determination, which the EEOC asserted had notice and an opportunity for conciliation, and seven entities as defendants for relief purposes only who did not have actual notice and an opportunity for conciliation.  Id. at 5.  In regards to the seven entities to which the EEOC acknowledged at the hearing that did not have actual notice and an opportunity for conciliation, the Court found that the EEOC failed to demonstrate that these entities could provide relief unavailable through Mach Mining.  Id. at 6.  As to the two entities named in the Letter of Determination, the Court held that if the EEOC could demonstrate that these entities had actual notice and an opportunity for conciliation in compliance with EEOC’s rules and regulations, the EEOC was granted leave to amend the complaint and to join those two entities as defendants.  Accordingly, the Court granted the EEOC’s motion to amend its complaint to add two entities as defendants, while denying the remainder of its motion to amend in regards to the seven entities who had no actual notice or opportunities for conciliation.  Id. at 7.

Implications For Employers

The Mach Mining litigation is a benchmark case for pattern or practice litigation brought by the EEOC, given its ramifications on the scope of review of the government’s pre-suit Title VII obligations.  This ruling illustrates that in instances where the EEOC does not provide parties actual notice or an opportunity to conciliate, courts will likely not allow those parties to later be added as defendants.  Nonetheless, it remains unlikely that courts will conduct in-depth reviews of such conciliations.

Readers can also find this post on our EEOC Countdown blog here.

United_States_District_Court_for_the_Eastern_District_of_Michigan_sealBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In one of the first two ever transgender discrimination cases brought by the EEOC, a federal court in Michigan granted the employer’s motion for summary judgment, finding the employer met its burden in demonstrating that it is exempt under the Religious Freedom Restoration Act, while the EEOC failed to suggest a less restrictive alternative in its challenge of the employer’s gender-specific dress code policy.

In one of the first two ever transgender discrimination cases brought by the EEOC, the government alleged that a funeral home wrongfully terminated its former funeral director for being transgender, for transitioning from male to female, and/or for not conforming to the employer’s gender-based preferences regarding its dress code.  The funeral home argued it was exempt under the Religious Freedom Restoration Act (“RFRA”).  In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 14-13710 (E.D. Mich. Aug. 18, 2016), after the EEOC and employer R.G. & G.R. Harris Funeral Homes, Inc. (“the Funeral Home”) both moved for summary judgment, Judge Cox of the U.S. District Court for the Eastern District of Michigan granted the Funeral Home’s motion and denied the EEOC’s motion.  The court also dismissed the EEOC’s claim that the Funeral Home engaged in an unlawful employment practice by providing work clothes only to males, noting that the EEOC had not done a full investigation of this claim that it uncovered during its wrongful termination investigation.

Although transgender discrimination litigation is not yet explicitly covered under Title VII, this ruling is monumental in terms of shaping the landscape for an evolving area of law that will profoundly impact employers in years to come.

Case Background

The Funeral Home is a closely-held, for-profit corporation operating three funeral homes in Michigan.  Id. at 7.  Owner and operator Thomas Rost has been a Christian for over sixty-five years.  Id. at 15.  While the Funeral Home does not officially affiliate with a religion, its website contains scripture and various bible verses are dispersed at its locations.  Id.  The Funeral Home has a strict employee dress code policy with several requirements, including that men must wear suits and women must wear jackets and skirts/dresses.  Id. at 8-9.

The claimant was hired in 2007.  Id. at 9.  In 2013, the claimant provided the Funeral Home with a letter stating he intended to begin transitioning his gender to female following return from a vacation.  Id. at 10.  Although the claimant intended to abide by the gender-specific dress code by wearing a skirt during the transition, Rost fired the claimant, stating “this is not going to work out.”  Id. at 11.

The claimant filed a charge of sex discrimination with the EEOC.  During its investigation, the EEOC discovered that male employees at the Funeral Home were provided with work clothing and that female employees were not.  The EEOC filed suit against the Funeral Home on September 25, 2014, asserting two claims.  Id. at 12.  First, it asserted a wrongful termination claim, alleging the claimant was fired because the claimant is transgender, because of the claimant’s transition from male to female, and/or because the claimant did not conform to the Funeral Home’s sex or gender-based preferences, expectations, or stereotypes.  Second, the EEOC alleged that the Funeral Home engaged in an unlawful employment practice by providing work clothes to male but not female employees.  The parties filed cross-motions for summary judgment.

The Decision

The court granted summary judgment in favor of the Funeral Home as to the wrongful termination claim, and dismissed the EEOC’s claim regarding the work clothes being provided only to males.  Id. at 55-56.  First, the Funeral Home asserted that its enforcement of its sex-specific dress code cannot constitute impermissible sex stereotyping under Title VII.  The court rejected this argument, opining that “[t]his evolving area of the law – how to reconcile this previous line of authority regarding sex-specific dress/grooming codes with the more recent sex/gender-stereotyping theory of sex discrimination under Title VII – has not been addressed by the Sixth Circuit.”  Id. at 25-26.

On the heels of the Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), the Funeral Home also argued that the RFRA prohibited the EEOC from applying Title VII to force the Funeral Home to violate its sincerely held religious beliefs.  Id. at 26.  The RFRA prohibits the “‘Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability’ unless the Government ‘demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.’”  Id. at 27 (quoting 42 U.S.C. §§ 2000bb–1(a), (b)).  The EEOC conceded that the Funeral Home’s religious beliefs were sincerely held.  Id.  Accordingly, citing Rost’s testimony that permitting employees to dress inconsistent with their biological sex would violate his religion and pressure him to relinquish his business, the court found that “the Funeral Home met its initial burden of showing that enforcement of Title VII, and the body of sex-stereotyping case law that has developed under it, would impose a substantial burden on the ability of the Funeral Home to conduct business in accordance with its sincerely-held religious beliefs.”  Id. at 32.

After finding that the Funeral Home demonstrated that enforcement of Title VII would be a substantial burden to its religious exercise, the EEOC then needed to meet its two-part test: (1) application of the burden is in furtherance of a compelling government interest; and (2) is the least restrictive means of furthering that compelling government interest.  The court assumed without deciding that the EEOC met its first burden, therefore proceeded to analyze the least restrictive means burden.  Id. at 36.  Quoting Hobby Lobby, the court noted that the “least-restrictive means standard is exceptionally demanding.”  134 S. Ct. at 2780.

Rejecting the EEOC’s conclusory argument that Title VII is narrowly tailored, the court noted that the EEOC did not provide “a focused ‘to the person’ analysis of how the burden on the Funeral Home’s religious exercise is the least restrictive means of clothing gender stereotypes at the Funeral Home under the facts and circumstances presented here.”  Id. at 38.  Further, noting the EEOC had been proceeding as if gender identity or transgender status was protected under Title VII, the court opined that the EEOC appeared to have taken the position that the only acceptable solution would be for the Funeral Home to allow the claimant to wear a skirt while working as a funeral director.  Id. at 39.

Finding that the EEOC failed to offer or even explore any solutions that could have worked under the facts of this case, the court rejected the EEOC’s approach and questioned “[i]f the EEOC truly has a compelling governmental interest in ensuring that [the claimant] is not subject to gender stereotypes in the workplace in terms of required clothing at the Funeral Home, couldn’t the EEOC propose a gender-neutral dress code (dark-colored suit, consisting of a matching business jacket and pants, but without a neck tie) as a reasonable accommodation that would be a less restrictive means of furthering that goal under the facts presented here?”  Id. at 38-41.  Accordingly, the court held that the EEOC did not meet its demanding burden, thus entitling the Funeral Home to RFRA exemption from Title VII.

As to the second claim, the EEOC alleged that the Funeral Home violated Title VII by providing a clothing allowance and/or work clothes to male employees but failing to provide such assistance to female employees.  Id. at 45.  Relying on EEOC v. Bailey, 563 F.2d 439 (6th Cir. 1977), the Funeral Home argued that the EEOC may include in a Title VII suit only claims that fall within an “investigation reasonably expected to grow out of the charge of discrimination.”  Id. at 45-46.  Applying Bailey, the court concluded that the EEOC investigation here uncovered possible unlawful discrimination (1) of a kind not raised by the claimant; and (2) not affecting the claimant.  Id. at 54-55.  Thus, the court instructed that the proper procedure would be the filing of a charge by a member of the EEOC and for a full EEOC investigation of that new claim of discrimination.  Accordingly, the court dismissed the EEOC’s clothing allowance claim without prejudice.  Id. at 56.

Implications For Employers

With an increasingly diverse workforce employing more transgender employees, employers would be wise to adopt an inclusive mentality in order allow their business to nurture a broader range of perspectives while also protecting against potential discrimination liability.  As this was a favorable ruling for the employer, businesses with sincerely held religious beliefs can use this as a template to seek protection under RFRA exemptions when defending against various discrimination claims, including those brought on behalf of transgender employees.  Until Title VII eventually incorporates transgender discrimination, the EEOC will continue to bring sex discrimination claims on behalf of transgender employees, but will use this opinion to remedy flaws in their strategy, for instance, in their approach to the least restrictive means test for gender-based dress code policies.

Instead of taking a reactionary approach and waiting for Title VII to evolve or for the EEOC to remedy their case theories, employers should be proactive in revising their policies to be gender-neutral when possible and contemplative of any employment requirement that might affect transgender employees.  As both employees and laws change, employers should follow suit now before having to pay to defend one later.

Our loyal blog readers can also find this post on our EEOC Countdown Blog here.