The Equal Employment Opportunity Commission (“EEOC”) recently releasedstatistics on its charge processing and litigation which include data from 1997 through 2009. As others, including the New York Times , have reported, the data shows overall charge filing down about two percent from 2008. However, the continued high number of charges is the real story, because 2008 was a record year for charges. Thus, although there was a slight decrease in age discrimination charges in 2009, even those stayed close to the record levels of 2008. In fact, age charges for 2009 are up more than 42 percent over the last ten years. Harassment charges of all types also decreased significantly (5.8%), but again from the record 2008 levels. The subgroup of sexual harassment charges decreased at a greater rate, 8.4%. Interestingly, the percentage of sexual harassment charges filed by males stayed about the same, 16%.
Some types of charges did increase. Charges filed based on disability (up 10% from 2008), religion (up 3.5%) and national origin (up 5%) are at record levels. Charges alleging race discrimination and sex discrimination stayed very close to their record levels of 2008, and make up about 36% and 30% respectively of all charges filed. Overall, Commission charges have increased almost 16.8 percent from fiscal year 2000.
Paradoxically, the increase in number of charges over the last decade has not caused a corresponding increase in suits filed by the Commission. The number of lawsuits filed by the Commission in 2009 (314) represents a 32.5% decrease from the record setting year of 1999 (465).
Employers forced to implement voluntary separation or early retirement incentives to deal with the recent economic downturn sometimes make a no-rehire policy part of the package. There may be sound business reasons for doing so, for example, to avoid paying a salary to someone who was supposed to leave employment and is receiving separation or retirement benefits. However, employers who include a no-rehire policy as part of a separation incentive package run the risk of having to defend an age discrimination lawsuit if the policy is later applied to prevent a rehire. Recently, the Equal Employment Opportunity Commission ("EEOC") filed such a suit in federal court in New York. EEOC v. AT&T, Inc., Civil Action No. 09 Civ. 7323 (S.D.N.Y. 2009).
EEOC’s complaint alleges that, among other things, a no-rehire policy violates the Age Discrimination in Employment Act because it has an adverse impact on employees and applicants who are age 40 or older. The theory is that older employees are more likely to be denied employment under a no-hire policy because they are more likely to have accepted a voluntary separation or early retirement incentive.
Whether such a disparate impact claim is even available in the context of a failure to hire is open to question. However, EEOC has obtained a favorable decision on that issue from at least one other court. In EEOC v. Allstate Insurance, Co., (8th Cir. 2008), the United States Court of Appeals for the Eighth Circuit considered a similar “no-rehire” policy that applied to “employee-agents” who were terminated as part of a corporate reorganization. Allstate’s policy prohibited the rehire of any terminated employee-agent for one year or for so long as that employee was receiving severance benefits, whichever period was longer. Ultimately, the Eighth Circuit held that the “rehire” policy was an “employment policy” and not a “hiring policy,” and that the policy was therefore subject to a disparate impact challenge under the ADEA. Allstate reportedly settled the case for $4.5 million.
Eighteen months after it was first signed into law by President Bush, Title II of the Genetic Information Nondiscrimination Act of 2008, also known as GINA, will take effect this Saturday, November 21, 2009. Title II prohibits employment discrimination based on genetic information, and imposes confidentiality obligations on employers who obtain such information. Title II's requirements are described below.
In enacting GINA, Congress lauded the many advances in genetic research in recent years that may spur major medical breakthroughs in the detection, treatment and prevention of illnesses and diseases. It also found, however, that with this progress came increasing concern about the possible misuse of genetic information to discriminate in employment and health insurance coverage. As an example, Congress cited to legislation passed by some state legislatures in the 1970s mandating sickle cell anemia screening as a covert means of screening African-American applicants out of the workplace.
Employees appear to share Congress’s concern. In one national survey, 63% of participants indicated they would not take genetic tests for disease if the results could be accessed by their employers or health insurers. Another recent poll found 93% of respondents opposed to the use of genetic information by health insurers and employers.
Enacted in response to these growing concerns, Title II prohibits employers from using genetic information in making any decisions about hiring, firing, promotions or any other term or condition of employment. It also forbids employers from intentionally acquiring genetic information, imposes strict confidentiality obligations on those who do come into possession of such information, and prohibits retaliation against individuals who challenge acts made illegal by GINA or who have filed a charge or otherwise participated in an investigation, proceeding or hearing under the law. Although New York’s Human Rights Law has prohibited discrimination on the basis of genetic characteristics since 1995, the new federal law imposes restrictions not found in the state statute.
Title II’s protections extend to applicants, employees and former employees, and its restrictions apply to private and state and local government employers with 15 or more employees, employment agencies, labor unions, joint labor-management training programs, Congress and federal executive branch agencies.
Genetic Information What is considered “genetic information” under the new law? The term encompasses not only information about an employee’s own genetic tests, but also information about the tests of the employee’s family members and the manifestation of diseases or disorders in those family members (i.e., family medical history). Covered “family members” can be those as distant as 4th degree relatives, including great-great grandparents and first cousins once removed. The term genetic tests generally refers to analyses of human DNA, RNA, chromosomes, proteins or metabolites that detect genotypes, mutations or chromosomal changes. Thus, a test to determine the likelihood that an individual will develop Huntington’s Disease is a genetic test and the results would constitute “genetic information” for purposes of GINA. On the other hand, information about the sex or age of a person is expressly carved out as not constituting genetic information.
Acquisition of Genetic Information
The new law imposes strict limitations on the acquisition of genetic information by employers. More specifically, employers are prohibited from requesting, requiring or purchasing genetic information about an employee or the employee’s family member except in very limited circumstances. One such exception, the so-called “water cooler” exemption, excuses employers who inadvertently learn genetic information. Examples may include a supervisor who overhears one employee tell another that her father has Alzheimer’s Disease or a manager who learns genetic information in response to a general health inquiry such as “how are you?” Another exception shields employers that acquire genetic information through responses to lawful requests for medical certifications under the federal Family and Medical Leave Act (“FMLA”) or similar state leave laws. Additional exceptions cover genetic information acquired through employer-offered health and genetic services, such as “wellness” programs, as well as to information obtained through commercially and publicly available sources such as newspapers or magazines. This last exception, however, does not apply to genetic information contained in medical databases or court records.
Notwithstanding these exceptions, Title II imposes a significant new restriction on the permissible scope of post-offer medical examinations. Although the Americans with Disabilities Act has for years allowed employers to require that all persons offered a position in a particular job category undergo a medical examination, they will no longer be permitted to obtain family medical history information or require that the individual submit to genetic testing as part of that examination.
Most importantly, regardless of whether the genetic information has been lawfully acquired or not, employers are strictly prohibited from using that information in making any employment-related decisions such as hiring, promotions, or termination.
Confidentiality On top of its strict limitations on the acquisition of genetic information, the statute also imposes significant confidentiality obligations on employers that possess such information. First, genetic information must be treated as a confidential medical record. If the information is in writing, it must be maintained in a medical file separate and apart from other personnel information. The information may be maintained in the same file as medical information subject to the ADA’s confidentiality requirements. Notably, genetic information obtained through commercially or publicly available sources – for example, information about the cause of death reported in a newspaper obituary – need not be maintained in the separate medical file.
Additionally, GINA prohibits the disclosure of genetic information unless such disclosure is: (i) to the employee (or family member, in limited circumstances) at his or her written request; (ii) to an occupational or other health researcher conducting research in compliance with specific federal regulations; (iii) in response to a court order so long as disclosure is limited only to genetic information expressly authorized by the order and the affected individual is notified of the order and the content of the disclosure; (iv) to government officials investigating compliance with GINA, provided the information is relevant to the investigation; (v) to comply with certification provisions of the FMLA and related state family and medical leave laws; or (vi) to public health agencies, limited to family medical history information related to a contagious disease that poses an imminent hazard of death or life-threatening illness and where notice is also given to the employee of the disclosure.
Remedies Remedies available for violations of Title II are the same as those available under Title VII. Unlike Title VII, however, GINA does not currently provide a cause of action for “disparate impact.” A commission will, however, be established six years after Title II becomes effective to review genetic science developments and to make recommendations to Congress as to whether a “disparate impact” cause of action should be added to the statute.
The Equal Employment Opportunity Commission (“EEOC”) has been charged with enforcing Title II. To that end, the EEOC issued proposed regulations in March 2009, but has yet to issue the final regulations. It has, however, issued an updated “EEO is the Law” poster to reflect the changes implemented by the new law. Employers have the choice of either printing and posting the new updated poster, printing and posting a supplemental poster alongside the EEOC’s 2002 “EEO is the Law” or the Office of Federal Contract Compliance Programs 2008 “EEO is the Law” posters, or ordering a new poster through the EEOC Clearinghouse.
According to a recent decision by the United States Court of Appeals for the Second Circuit, an employer is not necessarily insulated from liability for the discriminatory acts of its independent contractors. Halpert v. Manhattan Apartments, Inc., Slip Op. No. 07-4074-cv (September 10, 2009). The case arose when the plaintiff, Michael Halpert, interviewed for a position as a “Shower,” a person who shows apartments to potential buyers. The person who interviewed Halpert for the position was an independent contractor of the defendant Manhattan Apartments. He allegedly told Halpert that “they were looking for someone younger.” Halpert sued contending that he was not hired for the position because of his age in violation of the Age Discrimination in Employment Act (“ADEA”). Manhattan Apartments contended that it could not be held liable for any alleged discrimination because the person who made the decision was an independent contractor who was making the hiring decision for himself, rather than for Manhattan Apartments. Relying on the Second Circuit’s decision in Robinson v. Overseas Military Sales Corp., 21 F.3d 502 (2d Cir. 1994), the United States District Court for the Southern District of New York agreed, and granted summary judgment dismissing the complaint.
The Second Circuit reversed in an unsigned per curiam opinion. First, the Court held that the issue in the case was not controlled by its decision in Robinson, because Robinson only held that an independent contractor cannot bring a claim under the ADEA. The Court stated that the issue before it was a different one: whether an employer can be held liable for the alleged discriminatory acts of its independent contractor. In holding that an employer can be held liable, the Court stated that general principles of agency law applied to the question. Thus, an employer can be held liable for the discriminatory acts of its agents whether those agents are employees or independent contractors. An individual is an agent where he has been given actual authority to hire on behalf of the employer, or where the employer through its words and conduct has created an apparent authority to hire in the eyes of the job applicant.
What types of evidence are sufficient to render an independent contractor an agent of the employer? There is no one set of facts that is sufficient. In this case, the key facts on agency were disputed, causing the Court to hold that summary judgment on the issue was inappropriate. But this also means that Halpert had enough evidence to go before a jury on the question. According to the Court, Halpert had evidence that: Manhattan Apartments sponsored a training program from which “Showers” would be selected; that individuals chosen from the training program would receive commissions from Manhattan Apartments; and that Manhattan Apartments enlisted the independent contractors to interview candidates for the training program. In addition, Halpert apparently presented evidence that he was interviewed at Manhattan Apartments’ offices. Although Manhattan Apartments contended that the interviewer was doing the hiring for himself and would be paying the commissions, Halpert presented evidence to counter that contention. He alleged that the person who interviewed him stated that “they” were looking for someone younger, implying that the independent contractor was not hiring for himself. In addition, the independent contractor’s agreement with Manhattan Apartments did not address in any way the independent contractor’s purported responsibility for paying commissions to “Showers.”
Although many employers have put a freeze on hiring during these tough economic times, as we ease out of the current recession, many employers are moving from a hiring freeze mode to a hiring expansion mode. If you are one of those employers, it is a opportune time to remember that federal and state equal employment opportunity laws prohibit prospective employers from asking certain questions during the hiring process, whether on a job application or in an interview. Asking such questions can lead to potential liability for discriminatory hiring and to costly lawsuits. Below are twelve key subjects to avoid during the hiring process.
1. Have you ever been arrested?
The New York Human Rights Law (NYHRL), makes it unlawful for an employer to inquire about, or act adversely upon, a job applicant’s arrests or criminal accusations, if the applicant has been exonerated of the charges leading to the arrest, or if the charges were not pursued through the legal system.
An employer may lawfully ask if an applicant has previously been convicted. If this question is answered affirmatively, the employer may seek additional information about the conviction. However, under New York law, it is unlawful to deny employment because of a criminal conviction unless the employer can demonstrate, using a multi-factor analysis, either a direct relationship between the criminal offense and the employment sought or that granting the employment sought would create an unreasonable risk to the property or safety of others.
2. List all clubs, societies and organizations to which you belong.
Although this inquiry is commonly made by employers to obtain information that may reveal an applicant’s character, it should be avoided because the response may indirectly reveal an applicant’s membership in a protected class. Inquiries regarding professional associations or memberships, however, are acceptable if they are job-related.
3. When did you graduate?
Although information regarding an applicant’s academic, vocational or professional education may be relevant to an individual’s qualifications for a particular job, employers should not ask for dates of attendance or graduation, because the response may indirectly reveal an applicant’s age. The Age Discrimination in Employment Act (ADEA) and the NYHRL prohibit employers from discriminating on the basis of an individual’s age, including refusal to hire an applicant because of his/her age.
4. How would you feel about working for someone younger than you?
This question may be tempting when filling a position in a department run by a relatively young employee, and might seem acceptable because it is not asking directly about the candidate’s age, but it should still be avoided. Since the question goes indirectly to the applicant’s own age, it is impermissible under the ADEA and the NYHRL.
5. Do you rent or own your home?
This is rarely, if ever, relevant to the job in question, and questions such as this tend to have a disparate impact on minorities. Therefore, the best bet is to avoid the topic of home ownership altogether.
6. I see you worked at ABC Corporation…they are unionized, aren’t they?
This is too close to asking, “have you ever been a member of a union?” The Labor-Management Relations Act makes it illegal to discriminate on the basis of union membership
7. I see from your resume that you speak a number of languages. How did you learn to speak so many languages?
This inquiry may indirectly reveal the candidate’s national origin because it invites the employee to respond, for example, “I was born in Japan, and had to learn English when I moved to the U.S.”, or some other response revealing national origin. Because it is illegal under Title VII of the Civil Rights Act and the NYHRL to discriminate based on national origin, this type of question should not be asked.
8. Will you need a reasonable accommodation in this job? Can you perform the essential functions of this job with or without reasonable accommodation? Have you ever been on Workers' Compensation?
An employer should not make any of these inquiries on an application or during an interview because they are likely to elicit information about the applicant’s disabilities. Under the ADA and NYHRL, an employer may not ask any disability-related questions of a job applicant prior to making a conditional offer of employment. This prohibition is intended to ensure that an applicant's disability is not considered before the employer evaluates an applicant's general qualifications for the job. While an employer may ask an applicant if she can perform specific job functions, it may only ask an applicant about the need for accommodations during the pre-offer stage if she has an obvious disability or she voluntarily discloses a disability during the interview. The Equal Employment Opportunity Commission’s ADA Enforcement Guidance: Pre-Employment Disability-Related Questions and Medical Examinations provides a good resource for employers on this subject.
9. Do you use Miss? Mrs.? or Ms.? Are you married? Single? Divorced? Separated?
The New York Human Rights law prohibits all pre-employment inquiries into an applicant’s marital status. Such questions may also violate Title VII if the information gained is used to deny or limit employment for women. If this information is needed for business purposes (insurance, tax withholdings, etc.) it can be lawfully obtained after hiring.
10. Do you have a boyfriend? Or, do you have a girlfriend?
The question could elicit information about the applicant’s sexual orientation and should be avoided. The New York Human Rights Law prohibits an employer from discriminating against an applicant based on sexual orientation including homosexuality, bisexuality and asexuality.
11. You don’t do any crazy stuff like hang gliding, dirt biking, snowboarding or bungee jumping do you?
New York’s Off Duty Conduct Law (N.Y. Labor Law, Sec. 201-d, et seq.) prohibits an employer from refusing to hire an applicant because of that individual’s outside recreational activities, if those activities: are pursued off the employer’s premises; fall outside work hours; are pursued without the employer’s equipment; and are lawful. Whether the interviewer makes this inquiry to ascertain the likelihood of injury and resulting lost time, or simply to gauge the presence or absence of good judgment of the applicant, this line of questioning should be avoided. This is not to say that employers are prohibited from asking candidates what they do for fun or what their interests are. These are certainly appropriate interview topics. But employers should be wary about reacting negatively to the candidate's lawful recreational activities, should avoid questions that imply a negative view of certain types of activities, and cannot base a refusal to hire on such activity.
12. Do you smoke?
New York’s Off Duty Conduct Law also prohibits discrimination against applicants who use certain “consumable products.” For consumption to be covered by the law, it must be a lawful product, enjoyed outside work hours, off the employer’s premises and not involve the employer’s equipment or property. Smoking cigarettes, cigars or pipes is clearly covered by the statute and as a result employers should avoid asking applicants about such habits.
Employers wishing to obtain further guidance on pre-employment inquiries in New York should also review the guidelines issued by the New York State Division of Human Rights.
Few human resource professionals look forward to workplace discrimination investigations. They can be contentious and uncomfortable, and often reveal the uglier side of individuals and, sometimes, even entire segments of the company. Of course, allegations of workplace discrimination cannot be ignored. In fact, a proper and complete investigation can be critical to an employer’s defense of such claims, and a poor or incomplete investigation can be almost as harmful as no investigation. Below are a few tips for conducting good investigations.
1. Select an Appropriate Investigator. The person assigned to investigate should have a few critical qualities: a thorough understanding of the issue being investigated; an ability to command the respect of the individuals to be interviewed; the ability to maintain confidentiality; and a lack of personal involvement in the situation under investigation. Often, a human resources professional will fit this bill. However, there are situations where a third-party with greater investigatory experience is a better option. For instance, in-house or outside counsel may be better equipped to navigate potentially serious harassment or other allegations which may result in litigation. If counsel is involved, there is also a possibility that certain communications may be protected by the attorney-client or attorney work-product privileges.
2. Make the Investigation a Priority. As a general rule, a prompt investigation is key. If inappropriate or illegal conduct is occurring, it is imperative to stop it as quickly as possible. Even if the investigation shows that the allegations are unfounded, a prompt investigation lets the workforce know that the company takes such matters seriously, and has the additional benefit of supporting certain legal defenses to harassment claims.
3. Prepare the Topics/Questions in Advance. The interviewer should prepare thoroughly for the interview. At a minimum, make an outline of the topics to be covered. Whether to prepare a set of specific interview questions is a judgment call which depends, in part, on the expertise of the investigator. Writing out key questions in advance minimizes the risk the investigator will miss something. If many individuals will be interviewed, a list of questions may result in more consistent and controlled interviews. On the other hand, it is a mistake to become so wedded to written questions that you cannot deviate from them. If a witness offers relevant information which you did not anticipate, be flexible. Set your prepared questions aside and ask follow up questions tailored to the new information.
4. Interview All Necessary Witnesses. Failure to interview all persons who may have relevant information is a common mistake. Employers often have a natural inclination to “keep a lid” on the investigation by interviewing only one or two employees. While no one wants a sensitive issue to be the topic of employee scuttlebutt, you should not allow fear of employee gossip to result in an incomplete or imbalanced investigation. Limiting the investigation unnecessarily can yield uninformed conclusions and leave the adequacy of the investigation and the efforts of the investigator open to legal challenge.
5. Use Two Management Representatives. As a general rule, you should have another management representative with you during each interview. Occasionally a person interviewed later claims to have been threatened or bribed, or otherwise claims that the interview process was mishandled. A team interview approach will provide two witnesses to contradict those claims, and has the advantage of allowing one representative to take thorough notes while the other asks questions.
6. Start With the General and Move to the Specific. In most cases, your opening question should not be to narrow: for example, “Did you see John Smith walk up behind Mary Jones on Thursday in the lunch room and slap her on the back?” A good investigator starts with open-ended questions instead. This approach increases the likelihood that you will receive a witness’ best recollection instead of a recollection influenced by someone else’s version of events, and that you will receive more information. Of course, if the open-ended questions do not elicit sufficient information about the relevant events, ask direct questions about specific incidents.
7. Consider Interim Protective Measures. In extreme situations the company may need to take steps to protect the alleged victim while the investigation is ongoing. If a witness may be physically harmed or intimidated, it may be necessary to remove the accused from the workplace until the investigation is over. In other situations, it may be relatively easy to switch employees’ work assignments so that the accused and accuser do not interact while the investigation is proceeding. Keep in mind, however, that moving the alleged victim could be considered unlawful retaliation. It is therefore better to move the accused, not the accuser.
8. Guard Against Retaliation. An employer may not retaliate against an employee who complains about unlawful harassment or discrimination. Recently, the U.S. Supreme Court ruled in Crawford v. Metro. Gov’t of Nashville & Davidson County that Title VII’s prohibition against retaliation extends to a witness who corroborates allegations of unlawful conduct. You should warn the accused that he or she may not engage in retaliation and, remind each witness that, if he or she experiences retaliation, to report it to the company immediately.
On July 7, 2009, Governor Paterson signed into law legislation which became effective immediately and prohibits an employer from discriminating against an individual because of actual or perceived status as a victim of domestic violence or stalking. Specifically, the law prohibits an employer from refusing to hire or employ such individuals, barring or discharging them from employment, or discriminating against them with respect to their compensation or their terms, conditions and privileges of employment. As a result, New York Law now prohibits employers from discriminating against individuals on the basis of “age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status.”
According to the sponsor of the legislation, this amendment was necessary since many women stay with their abuser because they lack alternative financial resources for themselves and their children, and because escaping an abusive relationship often depends on financial independence, which means finding and keeping a job. Furthermore, according to the sponsor, it is not unusual for a victim of domestic violence to be terminated from her job or demoted because she needs time off or flexible hours as a protective measure. By making it unlawful for an employer to discriminate against victims of domestic violence in hiring or employment practices, the law’s goal is thus to help ensure the safety as well as the economic viability of victims.
Employers should also be aware that another existing New York law provides additional protection to victims of domestic violence. Section 215.14 of the New York Penal Law, a statute of general application, requires employers to provide employees with an unpaid leave to appear as a witness, consult with the district attorney, or exercise the employee’s statutory rights under the law. Obviously, a victim of domestic violence might need one or more of these types of leave. To use this leave, the employee may provide notice of the need for leave at any time prior to the actual day of leave. Employers are permitted to ask the party who sought the attendance or testimony of the employee to provide verification of the employee's service. Penalizing or discharging an employee for absences by reason of a required appearance as a witness in a criminal proceeding or consultation with the district attorney or exercise of his or her rights as provided under law constitutes a class B misdemeanor.
On July 15, 2009, the EEOC issued additional guidance to employees and employers on the use of releases in employment severance agreements. After acknowledging the current economic downturn and the resultant increase in workforce reductions, the EEOC noted that increasing numbers of employees are being presented with severance agreements containing release language and are wondering: “Is this legal? Should I sign it?” The EEOC Guidance is designed to assist employees in understanding waiver agreements and answering these questions. The Guidance is also useful to employers seeking to develop severance and release arrangements that will pass muster with the EEOC.
The EEOC Guidance provides instruction on the general requirements for a valid release of discrimination claims, as well as on the additional requirements applicable to age discrimination waivers covered by the Older Worker Benefit Protection Act (“OWBPA”) amendments to the Age Discrimination in Employment Act (“ADEA”). The EEOC has issued detailed regulations interpreting and implementing the OWBPA/ADEA waiver rules (29 CFR § 1625.22), and much has previously been written about the requirements that must be satisfied to obtain an effective age discrimination waiver. Under the ADEA waiver rules: workers must be advised in writing to consult with an attorney; be afforded specified minimum time periods to consider the waiver (at least 21 days, or 45 days if offered as part of an “exit incentive” or "other termination program”); be allowed at least seven days after signing the waiver to revoke it; and receive other information about the benefits they will be receiving and the rights they will be giving up in order for the ADEA waiver to be valid (See EEOC Guidance at pp. 5-15).
The EEOC Guidance is perhaps most instructive on rules applicable to non-age discrimination waivers. The Guidance confirms that a waiver will not be valid unless it is signed by the employee “knowingly and voluntarily” and it is supported by sufficient “consideration” provided by the employer. The EEOC states that for the employer’s “consideration” to be adequate, it must be something of value that is additional to the payments or benefits to which the employee is already entitled. Therefore, offering employees their existing pension benefits or payments for their earned and unused vacation time or sick leave in exchange for a release will not be sufficient in the EEOC’s view. Moreover, while acknowledging that Title VII, the ADA, and the EPA do not require employers to satisfy the OWBPA/ADEA disclosure requirements, the EEOC indicates that the following factors will be carefully examined to ascertain whether the employee’s waiver was provided “knowingly and voluntarily:”
Was the waiver obtained through fraud, duress, undue influence, or other improper conduct?;
Was the waiver written in plain language sufficient to be understood by an individual with the employee’s education and business experience?;
Was the employee given enough time to read and consider the advantages and disadvantages of the waiver?;
Was the employee encouraged to consult, or discouraged from consulting, with an attorney?;
Was the employee allowed to negotiate the terms of the agreement?; and
How valuable was the consideration offered for the waiver?
The EEOC Guidance illustrates the importance of specifically referencing employment discrimination claims as part of the waiver language, indicating that even if a general release is “clear and unambiguous,” it may not bar employment discrimination claims if they are not mentioned specifically. Examples provided in the EEOC Guidance highlight the significance of an employee’s education and sophistication levels in assessing whether the waiver of employment discrimination claims was “knowingly and voluntarily” provided by that employee.
In view of the growing willingness of agencies and courts to scrutinize and limit the terms of waiver agreements, employers planning additional workforce reductions will be well-served to review their standard severance agreements to ensure compliance with the EEOC Guidelines. If you have questions or comments on the EEOC Guidance, please post them below or contact your BS&K employment attorney for additional information.
Somehow our legislature and Governor found time to amend the New York State Human Rights Law to expand the application of civil fines and penalties to include cases of employment discrimination occurring on or after July 6, 2009. N.Y. Exec. Law Sec. 297(4). Previously, the imposition of civil fines had been limited to cases of housing discrimination. With the enactment of the new law they may now be assessed in all cases of employment discrimination, which account for 80% of Division of Human Rights’ cases. A fine of up to $50,000 may be imposed, or in the case where the conduct is found to be “willful, wanton or malicious,” a fine of up to $100,000. Where the employer has fewer than 50 employees, civil fines and penalties may be paid in installments by the employer.
The purpose of the amendment, according to the Division, is to:
…greatly advance the Division’s mission to exercise the police power of the State for the protection of the public welfare, health and peace of the people of this State, and in fulfillment of the provision of the constitution of this State concerning civil rights. N.Y. Exec. Law § 290.1. The fines imposed will further the goal of equal opportunity in New York State by acting to deter and reduce discrimination on the basis of race, color, creed, national origin, sex, age, disability, sexual orientation, marital status, military status, and other protected categories.
Furthermore, the imposition of such fines will be in addition to and will not reduce or offset any compensatory damages awarded to a prevailing complainant. The fines are payable to the State.
The law does not change the types of relief that may be awarded to the complainant. Complainants who prevail in an action under state law may be awarded affirmative relief from the employer (e.g., be hired, promoted or reinstated) and awarded compensatory damages (economic damages and emotional distress damages. However, there is pending legislation in New York which would allow individuals to also recover punitive damages and reasonable attorneys fees for human rights law violations.
There is presently little guidance on how the penalties will be applied. The Division promises future guidelines. It may be that the standards applied in housing discrimination cases will be considered relevant. In housing discrimination cases, the factors that determine if civil fines and penalties are appropriate are: 1) whether the respondent previously committed unlawful housing discrimination; 2) the respondent’s financial resources; 3) the degree of respondent’s culpability; and 4) the goal of deterrence. The Division may also consider whether: 1) the employer has an established anti-discrimination policy; 2) the policy was distributed to employees; 3) there is an effective complaint procedure; and 4) employees have been trained in the law and the employer’s policies.
In many workplaces, it is not uncommon for employees to speak with each other about politics. As managers and employees learn each others’ political views, some employees may get the impression—rightly or wrongly—that their employers are discriminating against them because of political disagreements.
Sometimes, political discrimination can be overt. In the 2004 presidential campaign, there was a well-publicized incident in which an employer in Alabama told an employee that she was being discharged because she had a John Kerry bumper sticker on her car. But even when the employer does not expressly state why it has taken an adverse action against an employee, the circumstances may support an inference that the reason was political.
Employers and employees often assume that employment discrimination on the basis of political beliefs is unlawful. After all, discrimination on the basis of such obscure categories as marital status and genetic predisposition is unlawful, and human resources professionals constantly stress that all personnel decisions should be based on merit. However, surprising as it may seem, federal and New York law do not generally prohibit political discrimination in the private sector. The First Amendment restricts action against political dissentersby the government, but it does not restrict action by private actors. An employer that fires an employee because of a political bumper sticker may well be acting within its legal rights, reprehensible as such an action may seem. This blogpost examines the types of political discrimination that are plainly unlawful, as well as legal theories that can be argued when none of the well-established prohibitions applies.
Political Discrimination in the Public Sector
It is well-established that public employers (e.g., federal, state, and local governments, school districts, public authorities, etc.) may not discriminate against their employees on the basis of their political beliefs or affiliations. The United States Supreme Court, in Elrod v. Burnsand Branti v. Finkel, has held that such discrimination violates the First Amendment rights of the employees, and may be challenged in federal court. A major exception to this rule provides that policymaking employees may be lawfully subjected to political discrimination, so that the will of the people as expressed at the ballot box can be carried out by officials who are loyal to the political agenda of elected officials.
The Elrod/Branti rule has generated a complex body of caselaw. A discussion of the intricacies of First Amendment law under 42 U.S.C. § 1983 as applied to public employees would take volumes. It is sufficient for our purposes here to state that public sector employees have a great deal of protection against political discrimination.
New York “Political Activities” Law
In 1992, the New York Legislature added Section 201-d to the New York Labor Law. This statute is best known for its prohibition against employment discrimination on the basis of off-duty “recreational activities” such as smoking and skiing. Less well known is the statute’s prohibition of discrimination on the basis of an employee’s “political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property.”
The statute’s definition of “political activities” is relatively narrow. It covers “running for public office,” “campaigning for a candidate for public office,” or participating in political fundraising activities. It does not include mere political belief, or an expression of political views. Thus, an employer would violate the statute if it were to discharge an employee because she handed out leaflets for a candidate at a train station in her spare time, but would be in compliance with the statute if it were to discharge an employee because she expressed dislike for a particular candidate, or simply because it suspects that the employee favors a particular political philosophy.
The statute does not define “campaigning,” and there are no reported court decisions interpreting that word in this context. For this reason, it is uncertain whether a court would say that the statute would protect an employee who has a political bumper sticker on her car. The employee’s rights would depend in part on whether the display of a bumper sticker is considered “campaigning,” as opposed to simple expression. If the bumper sticker favors a party or a cause instead of a particular candidate, the statute would almost definitely not apply, since the only kind of campaigning that is protected is “campaigning for a candidate for public office.” For the same reason, a bumper sticker that opposes a candidate would also not appear to constitute “campaigning” within the meaning of the statute. Only a bumper sticker that favors a particular candidate would clearly invoke the statute’s protection.
The question would also arise whether driving a car with a political bumper sticker is conduct “off of the employer’s premises.” If the employer owns the parking lot where the bumper sticker is displayed, the statute arguably would not apply. Only conduct that takes place off of the employer’s premises, outside of work time, is protected by the statute.
The “political activities” clause is not the only provision of Section 201-d that can be used by someone who claims to be a victim of political discrimination. The statute also prohibits discrimination on the basis of what an employee chooses to read or watch in her leisure time. Thus, an employer may not treat an employee adversely because she reads the Daily Worker instead of the Wall Street Journal, or because she watches Norma Rae instead of Sleeping Beauty.
An exception to the statute permits employers to take action against employees when their political activities create “a material conflict of interest related to the employer’s . . . business interest.” Thus, a newspaper should be able to prohibit a journalist that it employs from campaigning for or against a candidate she covers, in order to protect the newspaper’s business interest in appearing impartial. Using the same exception, an employer that sells goods or services to government agencies may be able to argue that it is permitted to discharge an employee who is running as a candidate against the head of that agency, or who is campaigning for such a candidate.
Even when the law would otherwise apply, Section 201-d of the New York Labor Law permits employers to restrict the outside paid political activities of employees who are contractually bound to devote their “entire compensated working hours” to the employer, as long as the employee is paid at least $50,000 in 1992 dollars (approximately $76,000 in 2009 dollars). Similarly, an employer may enforce a contractual restriction on the outside activities of an employee who has a professional services contract because of the “unique nature of the services provided.” For example, a celebrity who is engaged by a movie studio may be restricted from running for office or campaigning for a candidate, if the contract contemplates that such activities may diminish the celebrity’s marketability.
New York Human Rights Law
The New York Human Rights Law, the state statute that prohibits most forms of unlawful employment discrimination, could perhaps be interpreted to cover political discrimination, but the courts have so far rejected such an argument.
Like most states, and like the federal government in Title VII of the Civil Rights Act of 1964, New York does not include “political views” or “political activities” in its list of categories protected by discrimination laws. However, the New York statute does prohibit discrimination on the basis of “creed.” Although the “creed” clause is most commonly invoked to prohibit discrimination on the basis of religion, the word has a sufficiently broad dictionary definition to include political beliefs as well.
To date, the courts have insisted on restricting the word “creed” to religious beliefs, not political ones. The only reported court case to squarely face the issue is Keady v. Nike, Inc. Keady was an employee of St. John’s University who claimed he was forced to resign from his employment because he protested the University’s decision to accept endorsement money from Nike in light of its labor practices in Third World countries. The court held that the employee could not sue under the Human Rights Law, because that law does not protect employees on the basis of their “ethical or sociopolitical views.” The court, however, failed to give convincing support for its holding. The only authority it cited other than the statute itself is a federal appeals court decision called Avins v. Mangum. But Avins merely noted that the State Commission for Human Rights declined jurisdiction over a claim of political discrimination. The Avins court did not rule on whether the State Commission was correct to decline jurisdiction, and it made no holding on the scope of the “creed” clause. Thus, there is still no reasoned decision that convincingly limits the “creed” clause to religious, as opposed to political, discrimination.
Perhaps the best argument against extending the Human Rights Law’s “creed” clause is the Legislature’s passage of Labor Law §201-d, discussed above. If the Legislature had believed that political discrimination was already prohibited by the Human Rights Law, it would have had no need to prohibit “political activities” discrimination in the new statute.
Another possible strategy for challenging political discrimination would be to take advantage of the broad definition of religious discrimination under Title VII, the federal anti-discrimination statute. The Equal Employment Opportunity Commission (“EEOC”) has stated that “[r]eligion is very broadly defined under Title VII. Religious beliefs . . . include . . . non-theistic ‘moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views.” This would seem to include at least some political beliefs, e.g., the belief that government should seek to maximize freedom, or the belief that government should seek to help the poor.
However, the EEOC goes on to state that “[s]ocial, political, or economic philosophies . . . are not ‘religious’ beliefs protected by Title VII.” This is a distinction that is difficult to define, and the EEOC makes no serious attempt to do so. If the facts presented in a particular case are favorable, it may be possible to convince a court that the distinction between protected non-theistic ethical beliefs on the one hand and unprotected political philosophies on the other is so untenable as to be arbitrary and capricious. This would open the door to at least some types of claims of political discrimination in federal court.
In July of 2008, the NLRB’s General Counsel released an official memorandum exploring the distinction between protected and unprotected political activity. The memorandum concluded that in order for political activity to be protected under the NLRA, there must be a “direct nexus between the specific issue that is the subject of the advocacy and a specifically identified employment concern of the participating employees.” The General Counsel found that such a nexus existed when employees participated in demonstrations against proposed immigration laws that would have made it more difficult for aliens to obtain work in the United States.
By analogy, it could be argued that the NLRA protects employees who seek to persuade other employees to vote for a political candidate who will work for improved family leave laws, or to support a political party that promises to raise the minimum wage. Like the immigration concerns discussed by the General Counsel, these causes are directly linked to employees’ interests as employees.
Contrary to the assumptions of many employers and employees, there is no law clearly prohibiting most forms of political discrimination in the private sector in New York. The New York Labor Law prohibits discrimination on the basis of active political “campaigning” or engaging in fundraising, but discrimination on the basis of mere political belief or expression is not prohibited. Creative plaintiffs may attempt to base claims on other legal theories, but so far such attempts have been successful only in narrow circumstances. Employees should beware of a gap in their legal rights, and employers should beware of the restrictions that do exist.
After winning the case, Defendants requested reimbursement for their “costs” incurred during the lawsuit, including copying costs, deposition transcripts, and daily trial transcripts, pursuant to Federal Rule of Civil Procedure 54(d) and a federal statute, 28 U.S.C. §1920. The request involved a significant amount of money. During the trial, the Defendants had ordered daily transcripts of the trial testimony from the court reporter. Those transcripts cost approximately $50,000 for over 3,000 pages of testimony generated during the course of the lengthy trial.
District Court Clerks have the power to award costs initially. The Clerk’s decision, however, is reviewable de novo by the District Court which tried the case. The Clerk denied Defendants’ request for the high cost of the daily transcripts, but the District Court reviewed the Clerk’s decision and granted the request – including fees for daily trial transcripts.
Such costs are not customarily awarded. Daily trial transcripts are taxable to the losing party as costs only if they are “necessarily obtained for use in the case.” 28 U.S.C. §1920. In this case, the District Court agreed with the Defendants that all relevant factors favored awarding the cost of daily transcripts. The District Court cited the length of the case, Plaintiff’s “confusing and muddled” presentation, the fact that Plaintiff’s credibility was a crucial issue in the case, and the fact that the Court and the Defendants’ counsel had to resolve confusion by pointing to the record, as factors requiring the use of daily transcripts. The Court also noted that the Plaintiff failed to make any affirmative showing that he was financially unable to bear the cost of the daily transcripts. In some cases, indigency may convince a District Court that a significant award of costs is not appropriate. Perks v. Town of Huntington, Slip Op. 99-cv-4811 (March 31, 2008).
Plaintiff appealed the award of costs to the Second Circuit, challenging the District Court’s award of costs as an abuse of discretion. On May 27, 2009, the Second Circuit issued a summary order affirming the District Court's decision. Perks v. Town of Huntington, Slip Op. 08-cv-2123 (May 27, 2009). As a result, the Defendants not only won their case but the Plaintiff was also required to pay them over $58,000 in costs.
The Defendant Town of Huntington was represented by Ernest R. Stolzer of Bond, Schoeneck & King, PLLC in Garden City, New York.
In what appears to be the first reported decision of its kind, the United States District Court for the Northern District of New York recently interpreted an Equal Employment Opportunity Commission (EEOC) regulation to permit an employer’s efforts to control retiree health insurance costs by coordinating its retiree health insurance plan with Medicare. Lefevre v. Niagara Mohawk Power Corp., slip op. no. 1:06-CV-768 (N.D.N.Y. April 21, 2009). The employer provided health insurance benefits to retirees under a plan that required a Medicare eligible employee to apply for Medicare Parts A and B. Medicare then became the primary health insurance coverage, and the plan paid benefits to supplement the benefits paid by Medicare. Due to the terms of the plan, a Medicare eligible retiree’s share of the plan premium was somewhat greater than that of a non-Medicare eligible employee.
Several Medicare eligible employees sued alleging that the higher premium share constituted age discrimination in violation of the Age Discrimination in Employment Act (ADEA). The ADEA prohibits discrimination based on age in terms and conditions of employment, including the terms of benefit plans. 29 U.S.C. §§ 623(a) & 630(l) However, the ADEA also authorizes the EEOC to create reasonable exemptions from the statute’s prohibitions when necessary and proper in the public interest. 29 U.S.C. § 628 EEOC created a coordination with Medicare exemption for employee benefit plans that provide health insurance benefits that are altered, reduced, or eliminated when the plan participant becomes Medicare eligible. 29 C.F.R. § 625.32(b)
In the Lefevrecase, the Court found that the regulation applied and required dismissal of the plaintiffs’ age discrimination claim. Because the premium differences were the result of the coordination with Medicare, they fell squarely within the regulatory exemption, even though they only impacted individuals who were age 65 (the age of Medicare eligibility) and older.
The Court also examined and applied a safe harbor provision within the ADEA which permits employers to implement a bona fide employee benefit plan which treats older and younger workers differently when either the costs are the same for both sets of workers, or the benefits are the same, the equal cost/equal benefit provision. 29 U.S.C. § 623(f)(2)(B)(1).In Lefevre, the Court found that the equal cost provision did not apply – the employer was in fact trying to lower its retiree health insurance costs by coordinating benefits with Medicare – but that the equal benefit rule did apply because the Medicare eligible retirees received the same benefit as non-Medicare eligible retirees. The plan supplemented any benefit provided by Medicare to provide full coverage.
Because the plan fell within the EEOC’s regulatory exemption, as well as qualifying under the equal benefit rule, the Court granted summary judgment to the employer and dismissed the complaint. The employer was represented by Robert A. LaBerge and Louis Orbach of Bond, Schoeneck & King, PLLC, in Syracuse, New York.