By Gerald L. Maatman, Jr. and Alex S. Oxyer

Seyfarth Synopsis: In Johnson v. Airbus Defense & Space Inc., No. 5:17-CV-2150, 2020 WL 1675776 (N.D. Ala. Apr. 6, 2020), the U.S. District Court for the Northern District of Alabama recently granted an employer’s motion for summary judgment on claims brought by plaintiffs alleging they were discriminated against when they were not offered severance packages following separation. Though the Court dismissed the plaintiffs’ claims, it left open the possibility that a denial of severance benefits could serve as the basis for discrimination suits.  Particularly in the uncertain landscape of the COVID-19 pandemic, the ruling is an important reminder for employers to keep a watchful eye on their severance practices.

Case Background

In Johnson, three former female employees filed claims of sex discrimination after they were separated from employment but not offered severance packages. Plaintiffs had been working for Airbus pursuant to a ten-year contract with the U.S. military. After the expiration of the contract, Airbus endeavored to transfer as many affected employees as possible to its other facilities and offer them positions substantially equivalent in terms of pay, status, position, and location. Employees who were not offered such positions were instead offered severance packages.

The plaintiffs were all offered transfer positions that the company believed to be equal in terms of pay, status, and location. However, there was a possibility that the new positions could require a transfer to a different location in the future. One of the plaintiffs immediately rejected the position, disagreeing that it was equivalent in terms of pay and status. The other two plaintiffs first accepted the new positions, but ultimately rejected them after they found out they would need to transfer to new locations down the road. After their employment terms expired, the plaintiffs were not offered severance packages. When the plaintiffs learned that other, male employees were offered severance pay, they filed a lawsuit alleging claims of discrimination.

The Court’s Decision

In assessing whether the plaintiffs met their burden in establishing a prima facie case of sex discrimination, the Court analyzed whether a denial of severance benefits could serve as an adverse employment action to support discrimination claims. The Court determined that “a denial of severance could be considered a material change to the terms and conditions of employment” and that plaintiffs could bring discrimination claims on such basis. Id. at *5.  Even though the denial of severance pay could serve as the foundation for discrimination claims, the Court reiterated that the plaintiffs still need to meet the additional prima facie criteria to bring a viable discrimination claim.

To support their claims, the plaintiffs pointed primarily to the male employees who had received severance packages following the expiration of their employment terms. The Court reasoned that for the male employees to be appropriate comparators to the plaintiffs, the employees needed to meet specific criteria, including: (i) they were offered an equivalent transfer position; (ii) they rejected the offer; and (iii) they were then offered a severance package. The plaintiffs did not describe any male comparators who met the Court’s criteria, so they were not able to use the alleged comparators to support their claims.

The plaintiffs were also unable to produce any other compelling evidence to suggest that Airbus’s legitimate, non-discriminatory reasons for distributing the severance packages were pretextual. Airbus established that the male employees who received severance packages did so because they were not offered transfer positions or because the transfer positions were “materially lesser [in] status and pay.” Id. at *6.  Though the plaintiffs believed that Airbus’s reasons were pretextual because they disagreed they were ineligible for severance, the Court emphasized that “[t]he employer determined the triggers for severance, and the employees’ beliefs about what situation triggered severance do not matter concerning pretext.” Id. at *7. As a result, the Court granted Airbus’s motion for summary judgment and dismissed the plaintiffs’ claims.

Implications for Employers

While the Court dismissed the plaintiffs’ claims in this case, it left open the possibility that the denial of severance benefits could support claims of discrimination. Accordingly, employers should ensure that their decisions regarding severance pay do not result in a disparate impact on (or constitute disparate treatment of) a particular group of employees and that reasons for offering severance pay to some employees and not others are well-documented, particularly in group termination situations. As employers are navigating the difficult waters of the COVID-19 pandemic, it is important that they remain vigilant in all aspects of separation decisions, including the payment of severance benefits.

For more guidance related to COVID-19 issues, visit our COVID-19 Resource Center here.

By: Gerald L. Maatman, Jr., Christopher DeGroff, and Matthew J. Gagnon

Seyfarth Synopsis:  The EEOC recently released updated guidance for employers trying to navigate the federal anti-discrimination laws in the COVID-19 era – entitled What You Should Know About the ADA, the Rehabilitation Act, and COVID-19. The most recent update adds significantly to the EEOC’s position on how employers should treat requests for “reasonable accommodations” in these difficult times, as well as pandemic-related harassment issues, and issues that could arise as employees start returning to work. As such, the EEOC guidance should be required reading for all employers.

As we first reported here, the EEOC released guidance for employers trying to navigate the Americans With Disabilities Act and the Rehabilitation Act in the COVID-19 era: What You Should Know About the ADA, the Rehabilitation Act, and COVID-19. The guidance gives employers practical Q&A-style guidance on how they can navigate the safety concerns associated with COVID-19 while staying in compliance with the federal disability discrimination laws. The guidance has been updated by the EEOC several times since it was issued in March. On April 9 and 17, 2020, in particular, the EEOC added significantly to its discussion of requests for reasonable accommodation during the COVID-19 emergency, pandemic-related harassment issues, and issues that could arise as employees are furloughed or laid off and as they return to work.

Reasonable Accommodation Guidance

The EEOC’s updated guidance adds several Q&A points regarding requests for reasonable accommodations. Some of the most significant points include the following:

  • For individuals who have a pre-existing condition that puts them at higher risk from COVID-19, the EEOC recommends several low-cost changes to the work environment, such as designating one-way aisles, using plexiglass, tables, or other barriers to ensure minimum distances between customers and coworkers, or other accommodations that reduce chances of exposure. According to the EEOC, flexibility by employers and employees is key. Temporary job restructuring of marginal job duties, temporary transfers to a different position, or modifying a work schedule or shift assignment are other possible solutions recommended by the EEOC.
  • The EEOC reminds employers that employees’ preexisting mental illnesses or disorders can be exacerbated by the circumstances brought on by the health emergency, meaning that some individuals may now be in need of reasonable accommodations that had not been necessary before. Moreover, some employees may require different accommodations to deal with changed work situations, such as an employee who may need a different accommodation so he or she can effectively work from home.
  • The EEOC also opined that employers may still request information from an employee to determine if a medical condition is a disability and that they may still engage in the interactive process to see whether a disability requires an accommodation. Employers may also choose to shorten or forego the interactive process and simply grant an employee’s accommodation on a temporary basis. Employers are encouraged to be proactive; they may ask employees with disabilities to request accommodations and engage in the interactive process for accommodations that employees believe they may need when the workplace re-opens or they return to work.
  • Employers are also advised that they are not required to provide a reasonable accommodation that would pose an “undue hardship” on the employer. In some cases, the pandemic may have changed what counts as an undue hardship for an employer. In particular, economic concerns brought on by the pandemic are relevant to determining what counts as a significant expense. According to the EEOC, “the sudden loss of some or all of an employer’s income stream because of this pandemic is a relevant consideration.” The EEOC cautions, however, that this does not mean that an employer can reject any accommodation that costs money: “an employer must weigh the cost of an accommodation against its current budget while taking into account constraints created by this pandemic.”

Pandemic-Related Harassment Guidance

The EEOC’s updated guidance also points employers to resources and tips they can use to prevent harassment that might arise as a result of the pandemic. Among other things, the EEOC recommends that employers explicitly communicate to their employees that fear of the pandemic should not be misdirected at individuals because of their national origin, race, or other protected characteristic. The EEOC also recommends that employers advise supervisors and managers of their roles in watching for, stopping, and reporting any harassment or other discrimination. Employers can also make it clear that they will continue to immediately review any allegations of harassment or discrimination and take appropriate action.

Guidance Relating To Furloughs, Lay-Offs, And Returning To Work

The EEOC had little to say to employers who are forced to consider layoffs or furloughs of employees, beyond simply reminding them about its guidance regarding waivers of discrimination claims in severance agreements, which can be found here.

With respect to returning employees, however, the EEOC reiterated that the ADA allows employers to make disability-related inquiries and to conduct medical exams if they are job-related and consistent with business necessity. That includes employees who might have a medical condition that would pose a direct threat to health or safety. Determinations as to whether a medical condition is a direct threat should be based on objective medical evidence, such as guidance from the CDC or other public health authority. According to the EEOC, “employers will be acting consistent with the ADA as long as any screening implemented is consistent with advice from the CDC and public health authorities for that type of workplace at that time.” That can include taking employees’ temperatures and inquiring about symptoms for all employees who enter the workplace because those actions are consistent with CDC guidance.

Finally, the EEOC has stated that it is permissible for employers to require returning workers to wear personal protective gear and observe infection control practices (including social distancing practices, among other things), provided that they continue to engage in the interactive process with any employee who requests an accommodation regarding those requirements. Employers’ requirements to discuss an employee’s requests and determine undue hardship are not lifted even for these COVID-19-related precautions.

Implications For Employers

These are just some of the important points clarified by the EEOC in this updated guidance. The EEOC continues to update this guidance on a rolling basis as it attempts to respond to this fast-moving crisis. It is a valuable resource for employers who every day are finding themselves encountering situations that have never or only rarely been seen before in the American workplace. We encourage all employers to review in detail the entirety of the EEOC’s guidance here, and to review Seyfarth Shaw’s COVID-19 Resource Center for additional guidance and information. Seyfarth Shaw also has a response team standing by to assist however we can.

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

By Gerald L. Maatman, Jr. and Michael L. DeMarino

Seyfarth Synopsis:  The battle continues over the applicability of the U.S. Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court, 137 S.Ct. 1773 (2017), to Rule 23 class actions. Last month, in Mussat v. IQVIA, Inc., 953 F.3d 441, 448 (7th Cir. 2020), the Seventh Circuit refused to apply the reasoning in Bristol-Myers Squibb to class actions, calling that push a “major change in the law of personal jurisdiction and class actions.” Now, on the heels of that decision, the Defendant IQVIA, Inc. has sought rehearing en banc.  IQVIA argues that the question of whether personal jurisdiction protections apply to class actions is critically important, and the panel’s decision “undermines the basic federalism principals underlying longstanding personal-jurisdiction requirements.” Mussat v. IQVIA, Inc., Case No. 19-1204, at 18 (7th Cir. Apr. 8, 2020).

This issue is critical to employers facing class actions because it impacts where an employer may be forced to defend a nationwide class action. District courts remain deeply divided on the impact of Bristol-Myers Squibb on class actions, IQVIA’s petition for rehearing raises complex and fundamental questions about class actions and due process. This case and, more broadly, the issue of the applicability of the Supreme Court’s ruling to class actions should be on every employer’s radar.

IQVIA’s Petition For Rehearing En Banc

IQVIA asks the Seventh Circuit to revisit the panel’s decision that the principles announced in Bristol-Myers Squibb do not apply to the case of a nationwide class action filed in federal court under a federal statute.

In Bristol-Myers Squibb, the Supreme Court ruled that plaintiffs who lived outside of California could not sue Bristol-Myers Squibb in a mass personal injury case in California state court because California does not have specific jurisdiction to hear claims by nonresidents. See Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1782 (2017).

IQVIA criticizes the panel’s attempt to draw a distinction between its case and Bristol-Myers Squibb. At the core of the panel’s decision was its conclusion that, unlike in a mass tort action, “absent class members are not full parties to the case” for purposes of personal jurisdiction. Mussat, 953 F.3d at 447.  IQVIA argues that the party status of absent class members is irrelevant to the personal jurisdiction inquiry. 

IQVIA also challenges the panel’s assertion that there was no pre-Bristol-Myers Squibb general consensus that due process principles did not prohibit a plaintiff from seeking to represent a nationwide class in federal court. According to IQVIA, simply because challenges to class actions on personal jurisdiction grounds were not raised before Bristol-Myers Squibb does not mean those challenges lack merit.

IQVIA also takes issue with the panel’s conclusion that Federal Rule of Civil Procedure 4(k) only requires that a plaintiff comply with state-based rules on the service of process, but does not establish an independent limitation on a federal court’s exercise of personal jurisdiction.  Rather, IQVIA asserts that allowing non-Illinois unnamed class members to proceed in the case is consistent with Rule 4(k), which allows personal jurisdiction only when the defendant is subject to a court of general jurisdiction in the state where the district court is located. Because Illinois law would not authorize some the absent class members to sue IQVIA in Illinois, IQVIA posits that Rule 4(k) prohibits a federal district court in Illinois from exercising jurisdiction.  

Implication For Employers

This case has important consequences for employers with national operations. If the panel’s decision remains undisturbed, plaintiffs filing nationwide class actions will be encouraged to forum shop. Nevertheless, as courts across the country are divided on this issue, employers facing nationwide class actions where they are not subject to general jurisdiction should strongly consider challenging personal jurisdiction over the non-resident class members under the rationale of Bristol-Myers Squibb. The filing of the petition for rehearing en banc is a strong signal that future petitions for certiorari on this issue are apt to end up before the U.S. Supreme Court in 2020.

 

By Gerald L. Maatman, Jr. and Christina M. Janice

Seyfarth Synopsis: In the latest development in the ultra-high stakes nationwide Prescription Opiate Litigation, the U.S. Court of Appeals for the Sixth Circuit granted the petition for writ of mandamus brought by twelve pharmacy defendants to overturn a November 2019 order by the U.S. District Court allowing two county plaintiffs to amend their respective complaints to allege new and untimely claims against the pharmacies, as part of a larger effort to increase efficiencies in the overall Opiate multidistrict litigation (“Opiate MDL”).  In In Re National Prescription Opiate Litigation, No. 20-3075 (6th Cir. April 15, 2019), the Sixth Circuit determined that the District Court’s order allowing plaintiffs to amend their complaints and add new claims some nineteen months after the deadline for amendment of pleadings and ten months after the close of discovery prejudiced the pharmacies in a way that could not be corrected on appeal, thereby warranting the extraordinary remedy of a writ to the District Court to strike the amended claims.

Background

As previously reported here and here, Judge Daniel A. Polster of the U.S. District Court for the Northern District of Ohio is steering into unchartered waters in the mammoth nationwide Opiate MDL consisting of 2,700 individual cases brought by 34,448 cities, counties, and municipalities against the drug’s manufacturers and distributors.  Last September, Judge Polster issued an innovative class certification order expanding the interpretation of Rule 23 to authorize certification of a novel settlement “negotiation” class. In Re National Prescription Opiate Litigation, No. 1:17-MD-2804, 2019 U.S. Dist. LEXIS 155118 (N.D. Ohio Sept. 11, 2019).  That order remains on appeal to the Sixth Circuit.

As certain pharmacy defendants started to settle claims against them in advance of scheduled trials, the District Court on November 19, 2019 granted an order allowing two Ohio counties with claims scheduled for trial to amend the complaints in their two cases to allege new “dispensary” claims against the pharmacy defendants.  The amendments were permitted nineteen months after the deadline to amend pleadings had expired, and ten months after the close of discovery.  By the same order, the District Court also refused to adjudicate the pharmacies’ motions to dismiss.  The District Court then ordered the pharmacies to produce nationwide prescription data, despite the pending claims being limited to Ohio’s Cuyahoga and Summit counties.  In so ordering, the District Court acknowledged that the nationwide prescription data would be inadmissible in the two Ohio county cases, but reasoned that the data would be available for future trials in the Opiate MDL.

The pharmacies filed a petition for writ of mandamus to the Sixth Circuit, seeking an order directing the District Court to strike the amended claims, to allow the pharmacies to file motions to dismiss, and to limit discovery of prescription data of tens of millions of nationwide customers.

The Sixth Circuit’s Ruling

Observing that a writ of mandamus is granted “only in “exceptional circumstances” involving a “judicial usurpation of power” or a “clear abuse” of discretion, the Sixth Circuit considered: (i) if the pharmacies had any other adequate means of relief from the District Court’s orders, such as an appeal; (ii) whether the damage or prejudice to the pharmacies caused by the orders could be corrected on appeal; and (iii) if the order “manifests a persistent disregard of the federal rules.” Id. at 4-5.

The Sixth Circuit determined that while Rule 16(b) requires a party seeking untimely amendment of claims to demonstrate good cause for the untimely amendment, no attempt to show good cause was made.  Id. at 6.  The Sixth Circuit rejected the District Court’s rationale of increasing efficiencies in the Opiate MDL by allowing amendment, opining that efficiencies are “no substitute for the showing of diligence required by [Rule 16(b)].”  Id. at 7.

Stating that the District Court “is notably conscientious and capable, and we fully recognize the complexity of his task in managing the MDL here,” id. at 7, the Sixth Circuit rejected any idea that Judge Polster was authorized by law to allow the late amendment; particularly by Rule 1, which provides that the Civil Rules should be construed “to secure the just, speedy and inexpensive determination of every action and proceeding.” Id.  The Sixth Circuit observed that MDL litigation is “not some kind of judicial border country, where the rules are few and the law rarely makes an appearance… [n]or can a party’s rights in one case be impinged to create efficiencies in the MDL generally.”  Id.

For these reasons, the Sixth Circuit granted the writ, and directed the District Court to strike the amendments adding “dispensary” claims to the counties’ litigations.  Finding the remaining grounds for the writ moot, the Sixth Circuit further cautioned that the District Court may not refuse to adjudicate motions to dismiss properly brought under Rule 12, and that additional discovery must be proportionate the needs of the case.  Id. at 9.

Implication For Employers:

The Sixth Circuit’s grant of a writ of mandamus demonstrates the real world tension that judges face in complex litigation when called on to construe the protections afforded to litigants by specific Federal Civil Rules, in light of the Rules’ express requirement to construe the Rules to serve the goal of speedy and efficient determinations of cases.  The decision also is a reminder to employers that strenuous assertion of individual protections in complex cases is not without reward.

By Gerald L. Maatman, Jr., Jennifer Riley, and Michael L. DeMarino

Seyfarth Synopsis: For nearly a decade, the aftershocks of the U.S. Supreme Court’s decision in Wal-Mart Stores, Inc.  v. Dukes have curtailed the success of plaintiffs attempting to certify class discrimination claims in situations where the alleged discriminatory policy is highly discretionary. But Zollicoffer, et al. v. Gold Standard Baking, Inc., et al., No. 13 CV 1524, 2020 WL 1527903, at *1 (N.D. Ill. Mar. 31, 2020), demonstrates that discretionary hiring policies and supervisor autonomy will not necessarily defeat class certification where there is an overarching policy of discrimination. Armed with compelling expert statistics and some ugly facts, Plaintiffs successfully navigated the commonality hurdles articulated in Wal-Mart and secured class certification.  The U.S. District Court for the Northern District of Illinois found that this statistical and anecdotal evidence was proof of a general policy of discrimination that caused a common injury to the class, and this ultimately drove the district court’s decision to grant class certification.

This case is important and is a must read for employers, particularly companies in the staffing industry, because it demonstrates the need to maintain and enforce anti-discrimination polices and the fundamental role that expert testimony plays in deciding whether class certification is appropriate.

Background

In Zollicoffer, et al. v. Gold Standard Baking, Inc., et al., No. 13 CV 1524, 2020 WL 1527903, at *1 (N.D. Ill. Mar. 31, 2020), Plaintiffs filed a class action complaint against Most Valuable Personnel (“MVP”), a staffing company, and its client, Gold Standard Bakery (“Gold Standard”), alleging race discrimination in violation of 42 U.S.C. § 1981. Plaintiffs claim that MVP acted on Gold Standard’s discriminatory preferences when it referred disproportionately few African-American applicants to temporary assignments at Gold Standard’s Chicago facility.

After discovery, Plaintiffs moved to certify a class of African-Americans who sought, but were denied, referrals to Gold Standard as a result of Defendants’ allegedly discriminatory policies. In support of their bid for class certification, Plaintiffs offered expert reports prepared by their labor economist, Dr. Marc Bendick.  Over Defendants’ opposition and objection, the Court found that Plaintiffs’ expert report satisfied the criteria for admissibility under Daubert and Federal Rule of Evidence 702, and that Plaintiffs carried their burden under Rule 23 to show that class certification is appropriate.

The Decision

As a threshold issue, the Court addressed the admissibility of Dr. Bendick’s expert reports, and ultimately, it was Dr. Bendick’s analyses that drove the decision to certify the class. Dr. Bendick compiled compelling statistics that found that non-Hispanic, African-American applicants were referred to Gold Standard at a rate far below the expected referral rate during the class period.

Defendants primarily challenged Dr. Bendick’s reports on the basis that he failed to properly vet the original data files on which he relied.  Defendants argued that this rendered his conclusions faulty and unreliable.  The Court rejected the defense position. It concluded that the “reliability of data . . . used in applying a methodology is tested by the adversarial process and determined by the jury.”  Id. at *15 (citation omitted). “[T]he court’s role,” it explained, “is generally limited to assessing the reliability of the methodology — the framework — of the expert’s analysis.” Id. Hence, the Court concluded that although Defendants raised “valid criticisms” of the data, those critiques went to the weight of Dr. Bendick’s analysis, not its admissibility. Id.  In fact, the Court concluded that essentially all of the Defendants’ challenges went to the weight, and not the admissibility of Dr. Bendick’s testimony. Accordingly, the Court found Dr. Bendick’s reports were sufficiently reliable to consider as part of Plaintiffs’ motion for class certification.

Next, the Court considered whether class certification was appropriate under Rule 23. As with most class cases, the battleground centered around Rule 23(a)’s commonality requirement and Rule 23(b)’s predominance requirement. The Court started its analysis by creating some distance from Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). There, it noted commonality was lacking because the alleged discriminatory policy was highly discretionary and the plaintiffs failed to identify a common way in which the defendants exercised that discretion. Id. at *20The Court noted that “commonality will exist where allegedly discriminatory general policies are enforced at the corporate level rather than by individual supervisors, even where there is some discretion in the policies’ execution.” Id.

Against this backdrop, the Court rejected the Defendants’ argument that the Plaintiffs did not provide proof of a general policy of discrimination because MVP’s supervisors and dispatchers had individual discretion to hire and refer workers based on a number of factors.

The Court explained that “Dr. Bendick’s analysis provides persuasive evidence that disparities in hiring can be explained by a general policy of discrimination, rather than individualized processes.” Id. at *21. Moreover, “the fact that MVP utilized a decentralized decision-making process and MVP supervisors and dispatchers had a degree of autonomy to make referral decisions does not preclude plaintiffs’ claim because they challenge defendants’ overarching policy against hiring African-Americans.” Id. Ultimately, the Court concluded that commonality was satisfied because “the statistical evidence and anecdotes together provide ‘significant proof’ of a ‘uniform employment practice’ that caused a common injury to the class.” Id.

The Court likewise found that Plaintiffs satisfied Rule 23(b)’s predominance requirement. Defendants attempted to raise a litany of individualized issues such as when the laborer sought work at MVP, what shifts they were willing to work, whether Gold Standard needed employees on those particular days, and whether the laborers even qualified for positions at Gold Standard. Id. at 28. The Court, however, opined that these “questions are actually secondary to plaintiffs’ common claims” because, if the trier of fact determines that Defendants had a discriminatory policy against hiring African-Americans,  those individualized questions will largely bear on damages. Id.

Implications For Employers

This case is a reminder for employers that they are not necessarily immune from class discrimination claims simply because their employment-related policies require individualized discretion in executing them. Staffing companies, in particular, should ensure that their anti-discrimination polices address discriminatory directives or preferences of their clients.

By Gerald L. Maatman, Jr., Alex S. Oxyer, and Paul M. Waldera

Seyfarth Synopsis: In a first-of-its-kind ruling in Sandvig v. Barr, No. 16-1368, 2020 WL 1494065 (D.D.C. Mar. 27, 2020), the U.S. District Court for the District of Columbia held that private citizens investigating whether employment hiring websites discriminate based on race or gender by creating fake profiles and job postings would not violate the Computer Fraud and Abuse Act with their use of fake profiles. The ruling is an important warning for employers using these hiring channels to watch out for such “testers” and the potential discrimination claims that may follow.

Case Background

In Sandvig, academic researchers filed a pre-enforcement constitutional challenge with the District Court, requesting that it examine whether certain provisions of the Computer Fraud and Abuse Act (“CFAA”) – which imposes criminal liability for particular computer-related fraudulent activity – violated the researchers’ constitutional rights, as they believed that the CFAA would prohibit them from conducting research related to hiring discrimination. The plaintiffs hoped to investigate whether websites that facilitate job hiring, such as LinkedIn, Monster, Glassdoor, and Entelo, use algorithms that lead to discriminatory treatment of applicants based on protected characteristics.

To “test” the website algorithms, the plaintiffs informed the Court that they planned to submit fake applications and fake job postings in an effort to see where the fake applicants were ranked by the site’s algorithms when the applications were forwarded to the job poster. The plaintiffs would include in the fake job posting that the posting was not a real opportunity so that no real applicants believed they were applying to a legitimate posting. The plaintiffs also stated that they would comply with any payment-related requirements associated with the job sites; however, the creation of fake profiles and fake postings still ran afoul of the sites’ terms and conditions for use.

Because of the violation of the site terms and conditions necessitated by the research, which the plaintiffs assumed would violate the Access Provision of the CFAA, the plaintiffs asked the Court to find that the Access Provision violated their constitutional rights. In response, the Federal Government filed a motion to dismiss. The Court granted the motion to dismiss for the majority of the plaintiffs’ claims, leaving only a claim that the law violated the plaintiffs’ First Amendment rights. The parties then filed cross-motions for summary judgment.

The Court’s Decision

In their motion for summary judgment, the plaintiffs renewed their pre-enforcement challenge to the Access Provision of the CFAA, alleging that it unconstitutionally restricted their First Amendment rights by criminalizing their research plans involving the violation of websites’ terms of service. In its motion, the government argued that the plaintiffs did not have standing and that the First Amendment did not shield the plaintiffs from decisions of private websites about their own terms and conditions.

The Court first addressed the government’s standing argument. The plaintiffs argued that they had standing because they intended “to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder.” Id. at *2. The Court agreed. It found that the plaintiffs had concrete plans to engage in their proposed research, there was a credible threat of prosecution based on previous cases brought by the government under the Access Provision, and that the case was ripe for adjudication. Accordingly, the Court concluded that the plaintiffs had standing to bring their claim.

The Court thereafter examined whether the CFAA Access Provision actually prohibited the plaintiffs’ proposed research. The CFAA prohibits “intentionally access[ing] a computer without authorization or exceed[ing] authorized access, and thereby obtain[ing] … information from any protected computer.” 18 U.S.C. § 1030(a)(2). In its opinion, the Court assessed whether violating the terms of service of a website constituted unauthorized access such that the violation would become a criminal offense. The Court adopted the common theory of a “two-realm internet,” meaning that unauthorized access involves transitioning from a public area of the internet to a private, permission-restricted area that usually requires a form of authentication before an individual is granted access. Where an individual passes a “permission requirement” that the individual is not authorized to pass, the Access Provision of the CFAA is triggered.

The Court determined that violating the terms of service of a website does not constitute a CFAA violation under the “authorized access” provisions. In its determination, the Court expressed discomfort in allowing website owners to set terms that would eventually lead to criminal liability. Accordingly, the Court denied both motions for summary judgment as moot since the plaintiffs’ proposed conduct did not run afoul of the CFAA, though it expressly opined that the conduct “may have consequences for civil liability under other federal and state laws.”  Id. at *10.

Implications for Employers

While many employers may never deal with the CFAA, the Court’s decision should serve as a warning to employers utilizing hiring platforms to fill job postings.  The issue of online job advertising has been a hot topic for the EEOC in recent years, with the Commission looking specifically at job advertisements on Facebook for potential discrimination issues, but research indicating potential discrimination in hiring platform algorithms may similarly draw the EEOC’s attention. With the Court’s decision in Sandvig removing the threat of criminal liability for this kind of “testing” research into possible discrimination related to algorithms used by hiring platforms, such research could be used to bolster discriminatory impact claims filed by plaintiffs related to hiring practices. Employers should keep an eye out for research conducted or released in the wake of this opinion, and hiring platforms should be on alert for “fake” postings and applicants utilizing their websites.

By Gerald L. Maatman, Jr. Alex S. Oxyer, Christopher DeGroff, and Matthew J. Gagnon

Seyfarth Synopsis:  On March 27, 2020, the EEOC announced its views on the COVID-19 pandemic. In particular, the EEOC provided guidance on how laws under its jurisdiction, such as the ADA, Title VII, and GINA, should be applied in these challenging times. The EEOC’s announcements are a must read for all employers.

The EEOC conducted a “town hall” style meeting in a webinar it hosted on March 27, 2020.  The meeting was conducted by Carol R. Miaskoff, the EEOC’s Associate Legal Counsel; Sharon Rennert, Senior Attorney Advisor; and Jeanne Goldberg, Acting Assistant General Counsel. The webinar focused primarily on various questions and considerations submitted to the Commission related to the Americans With Disabilities Act (“ADA”), but also addressed certain issues relative to Title VII, the Age Discrimination in Employment Act (“ADEA”), and even the Genetic Information Non-Discrimination Act (“GINA”). The following are key highlights from the presentation.

Medical Questionnaires And Examinations

In line with the EEOC’s COVID-19 Guidance issued March 19, 2020, the March 27 webinar emphasized that ADA rules and regulations should not prevent employers from following guidelines and suggestions made by the CDC or state/local public health authorities about steps employers should take regarding COVID-19. This flexibility extends to medical questionnaires and examinations in the workplace – specifically, the EEOC has explicitly opined that employers may take the temperatures of employees and may ask employees whether they have COVID-19 and whether they have symptoms of COVID-19, as long as they are doing so with all employees who would endanger others in the workplace if they contracted or were exposed to the virus. Further, the EEOC stated that it agreed that employers may bar employees from the workplace who have COVID-19, who have symptoms of COVID-19, or who refuse to have their temperatures taken or refuse to answer questions related to having symptoms of the virus.

But this flexibility is not without its limits. The EEOC emphasized that if employees do not come into contact with others in the workplace and would not put anyone at risk if they had the virus, employers cannot inquire about their symptoms and medical condition, nor may they take such an employee’s temperature. Further, employers may only single out an employee for taking their temperature or for medical questioning if they have objective evidence that the employee has symptoms of the virus or has had contact with someone with the virus. Finally, when inquiring about exposure to anyone with COVID-19, the EEOC stated that it is best practice to only ask if the employee has had contact with anyone with the virus or symptoms of the virus and to avoid asking about an employee’s family specifically, as GINA prohibits an employer from requesting the medical information or history of the employee’s family members.

Disclosure Of An Employee’s Exposure To The Virus

Other frequently asked questions to the EEOC relate to the disclosure obligations and limitations surrounding employee exposure to COVID-19. The EEOC stressed that although employers can inform their workforce that someone in the organization has or has been exposed to coronavirus, employers should still take care to not share the identity of the employee outside of a few key individuals within the company, as widespread disclosure of the employee’s identity could run afoul of the ADA. Further, employers are not obligated to share with the rest of the workforce that an employee is on medical leave or working from home due to coronavirus and should be careful not to do so unless there is a specific need for an individual to know the information. However, the ADA does not prevent employees from reporting coworkers exhibiting symptoms of the virus to supervisors or employers from reporting a diagnosis of COVID-19 to appropriate authorities (in fact, many states require such a disclosure).

Discrimination Considerations During The Pandemic

The Commission further addressed several questions regarding employer obligations in allowing employees to work from home and limitations in furloughing employees. Many employers asked if they are obligated to allow employees more at risk from the virus, such as employees over 65 or pregnant employees, to work from home. The EEOC concisely responded that employers are not obligated to allow such employees to work from home unless other, similarly situated employees outside of such groups were allowed to telework. The EEOC also reminded employers that, under federal law, they could not target employees over 65 or pregnant employees for furlough or layoff based on their “at risk” status. Finally, the EEOC again emphasized concerns about national origin discrimination and harassment related to coronavirus and reminded employers that such behavior should not be tolerated in the workplace, which is consistent with EEOC Chair Janet Dhillon’s message from earlier this week (posted here) expressing concerns about discrimination against Asian Americans and other people of Asian descent.

Reasonable Accommodations And The Interactive Process

The EEOC also focused on many questions related to reasonable accommodations and the interactive process during the pandemic. The EEOC first clarified that it does not yet have enough information to determine whether COVID-19 itself is a disability requiring reasonable accommodation. However, the virus creates other implications for employees with disabilities and their employers.

First, to the extent employees are at greater risk of COVID-19 due to preexisting disabilities, requests from those employees to take leave or work from home could be considered requests for reasonable accommodations. Employers may treat such requests as they normally would through the interactive process and are entitled to verify that the employee has a disability, that the disability would be exacerbated by COVID-19 or would put the employee at greater risk, or that the accommodation would address the issue. However, the EEOC requested that employers take into account that physicians and hospitals may not have the bandwidth to verify such requests and there are other ways to verify a disability, such as insurance paperwork or prescriptions.

Next, given the urgency of the pandemic, the EEOC asked that employers give requests for accommodation prompt attention. To the extent employers need to verify a disability or accommodation during the interactive process, the EEOC suggested several times that employees be granted accommodations on a temporary basis while the interactive process is moving forward. The Commission also emphasized that this is a time for flexibility and creativity when working through accommodation requests.

Finally, the EEOC addressed concerns that allowing work from home or telework during the pandemic would force employers to grant such accommodations after the pandemic is over. The EEOC reminded employers that if there is not a disability-related reason for working from home, or if there is another option that addresses the concern, employers are not obligated to grant working from home as an accommodation. Additionally, even if employers are waiving some essential functions of employee duties during the pandemic, they are not obligated to do so moving forward. However, the Commission did note that if an employee had previously been denied working from home due to concerns about productivity, allowing the employee to work from home during the pandemic could serve as a “trial run” that may obligate the employer to grant the accommodation request after the pandemic ends.

Implications For Employers

The EEOC’s presentation provided much-needed guidance to employers on how to navigate the challenging issues arising during the COVID-19 pandemic. As they are working through issues during these trying times, employers should pay close attention to which regulations have been relaxed by the EEOC and which are still of particular concern for the Commission.

By Gerald L. Maatman, Jr. and Matthew Gagnon

Seyfarth Synopsis: In the past 24 hours, the EEOC released a statement: What You Should Know About the ADA, the Rehabilitation Act, and COVID-19, which gives employers some guidance on how they can navigate the safety concerns associated with COVID-19 while staying in compliance with the federal disability discrimination laws. The EEOC was careful to explain that although those laws are still very much in effect, they do not interfere or prevent employers from following the guidelines or suggestions made by the CDC or state and local public health authorities regarding COVID-19. The Commission’s statement is a must read for corporate counsel.

The EEOC’s statement builds on its earlier guidance, issued during the H1N1 pandemic, Pandemic Preparedness in the Workplace and the Americans With Disabilities Act. That publication, which is far more in depth than what was just released, provides important guidance for employers trying to navigate the disability discrimination laws during a pandemic, including: how much and what kinds of information an employer may request from an employee who calls in sick, when employers may take the temperature of employees, when the ADA allows employers to require employees to stay home from work, and what employers can require in terms of doctors’ notes or other certifications of fitness for duty.

Those issues are also addressed briefly in the EEOC’s recent statement. These are the key points that the EEOC wants all employers to keep in mind:

  • During a pandemic, employers may ask employees if they are experiencing symptoms of the pandemic virus. For COVID-19, these include fever, chills, cough, shortness of breath, or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA.
  • The EEOC reminded employers that measuring an employee’s body temperature is a medical examination. But because the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, employers may measure employees’ body temperature. However, employers should be aware that some people with COVID-19 do not have a fever.
  • The CDC has stated that employees who become ill with symptoms of COVID-19 should leave the workplace. The EEOC wants employers to know that the ADA does not and should not interfere with that advice.
  • The ADA allows employers to require doctors’ notes certifying fitness for duty because such notes would not be disability-related or, if the pandemic were truly severe, they would be justified under the ADA’s standards for disability-related inquiries of employees. The EEOC also acknowledges that doctors and other health care professionals may be too busy to provide such documentation and that new approaches may be necessary, such as a form, a stamp, or an email to certify that an individual does not have the pandemic virus.

Implications For Employers

This is an incredibly fast-moving situation and no single set of guidelines can possibly cover all of the diverse situations that employers are likely to face with unprecedented urgency over the next days, weeks, and months. But the new guidelines issued today, and especially the more detailed document that was issued in 2009, are a good place to start for employers who are looking for quick, practical guidance as they start crafting and implementing critical workplace policies on the fly.

We encourage all employers to review Seyfarth Shaw’s COVID-19 Resource Center for additional guidance and information. The Resource Center was designed to provide employers up-to-the-minute guidance on the diverse and growing list of legal considerations and risks employers are facing. Seyfarth Shaw also has a response team standing by to assist however we can.

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

By Gerald L. Maatman, Jr., Jennifer Riley, Alex S. Oxyer, Paul M. Waldera

Seyfarth Synopsis: In Rusis, et al. v. Int’l Bus. Machines Corp., No. 18 Civ. 8434, 2020 WL 1151322, at *2 (S.D.N.Y. Mar. 10, 2020), the U.S. District Court for the Southern District of New York recently declined to conditionally certify a nationwide collective action brought against IBM on behalf of all employees over the age of 40, and in the process cast doubt of the availability of nationwide collective actions as a whole in this context. The Court ultimately found that the plaintiffs had failed to demonstrate the existence of any glue that bound the putative collective class together.  The ruling is an important guidepost for employers facing these types of lawsuit.

Case Background

In Rusis, four former employees filed a collective action alleging violations of the Age Discrimination in Employment Act (“ADEA”). Plaintiffs asserted that IBM implemented a “company-wide effort to replace older employees with younger hires” that discriminated against all IBM employees over 40 and forced them to depart because of their age. Id. at *3. According to the plaintiffs, IBM used several methods to reduce its older worker population, including terminating older employees for pretextual reasons, constructively discharging employees over 40, or imposing unreasonable conditions on their continued employment, all the while shielding younger employees in the company from similar conditions.  The plaintiffs also pointed to efforts by the company to compete in emerging technology spaces and the company’s encouragement for employees to “embrace the Millennial mindset” as further evidence of age discrimination. Id. Critically, the named plaintiffs all worked in different positions at separate IBM locations in four different states, including California, North Carolina, Georgia, and New Jersey. Id. at *4.

The Court’s Decision

In its opinion, the Court considered the plaintiffs’ motion for the issuance of notice to members of the putative collective action. At the notice stage in a putative ADEA collective action, a plaintiff needs to make a “make a modest factual showing that the plaintiffs and potential opt-in plaintiffs together were victims of a common policy or plan that violated the law.”  Id. The Court held that while the burden at this stage is modest, “it is not non-existent” and “generally cannot be satisfied by unsupported assertions.”  Id..  In an ADEA case, when the court has a more developed record “the named plaintiffs must prove that the plaintiffs who have opted in are, in fact, similarly situated to the named plaintiffs and were all subject to the same illegal employment practice such that their cases can all be tried together.”  Id.

The Court opined that the Plaintiffs failed to meet their burden of tying all former employees over the age of 40 to a common policy or plan.  The District Court evaluated the plaintiffs’ proposed collective action in terms of “whether the plaintiffs are employed in the same corporate department, division and location; whether they advanced similar claims of age discrimination; [and whether they] had similar salaries and circumstances of employment.”  Id. The Court concluded that that plaintiffs’ motion failed under all of these factors.

In support of their motion, the plaintiffs submitted 15 affidavits from former employees.  Each affidavit described a particular incident of alleged age discrimination at different locations, divisions, seniority levels, and job functions.  The Court rejected this proof. It determined that each alleged case of age discrimination had a different decision-maker.

The Court ruled that the various allegations between the different affidavits, on their face, did not preclude Plaintiffs’ from proceeding as a collective action.  Rather, the affidavits, taken as a whole, did not meet the minimal showing that a common plan or policy existed to replace older workers with younger workers.  Read together, the Court found that the affidavits contained very little evidence connecting one act of alleged discrimination to another. The Court also discounted a blanket, copy-and-paste assertion from affiants that “[b]ased on [their] conversations with other current and former IBM employees, [they] expect that there are many other employees over the age of forty (40) who have lost or will shortly lose their jobs at IBM, who would be interested in joining the case if notified of their right to do so.”   Id. at *3-4. The Court held that “vague allusions to conversations with co-workers do not support conditional certification.” Id. at *4.

The Court also rejected other tangential evidence provided by the plaintiffs.  To support their motion, the plaintiffs submitted an article by ProPublica and two documents referenced in that article that reported that IBM believed emerging technologies are “driven by Millennial traits” and that IBM “sought to sharply increase hiring of people born after 1980.” Id. at *5.  The Court declined to rely on the article because it was not based on sworn testimony of an affiant, but rather based on “subjective synthesis of various statistics, IBM documents, and employee statements by individuals whose journalistic credentials are unknown to the Court.” Id.  The Court also rejected an internal IBM document from 2006 that used the terms “gray hairs” and “old heads,” as well as a presentation document entitled “Reinvention in the Age of the Millennial.”  Id. The Court found that none of these documents contained any evidence of an actual plan to replace older workers with younger ones.

Ultimately, the Court denied the plaintiffs’ motion to issue notice to the members of the putative collective action on a nationwide basis because they failed to show that the putative collective action members were alike in “ways that matter to the disposition of their claims.” Id. at *6.

Implications for Employers

Rusis provides strong support for any employer seeking to defeat certification for a nationwide ADEA collective action.  While the Court did not shut the door on ever certifying a nationwide collective action, it is incumbent on plaintiffs to show more evidence and support to prosecute a nationwide common policy or practice than just a few company documents and conclusory testimony.

 

Seyfarth Synopsis: Jerry Maatman, Seyfarth’s chair of the firm’s class action defense group, discusses top Supreme Court cases on the docket for 2020 relating to the scope of Title VII of the Civil Rights Act of 1964.

In this video blog, Jerry discusses the differing views of the EEOC and the Department of Justice on interpretation of the reach of Title VII, the impact of Justice Kavanagh and Justice Gorsuch in relation to the outcome of these cases, and what this all means for employers.

Thanks for tuning in!