Red light? Green light? Trial.

Every week or two, the federal court in Connecticut is asked to decide a motion for summary judgment in a discrimination case.  I’ve yet to discuss what these motions are in detail on this blog, but a recent federal case in Connecticut provides a good learning example.

To simplify (drastically?) a federal court case in Connecticut, after a lawsuit is filed by an employee and responded to by the defendant/employer, the parties engage in what is called discovery — interrogatories, requests for production and depositions — all in the hopes of getting information that can help them at trial.

But at the end of discovery — before a trial happens — the parties (and typically the defendant) have an opportunity to file a “motion for summary judgment.”  Such a motion is the defendant’s chance to say, “Based on the undisputed facts, we should win on the law.”  Or, in other words, there’s no need for a trial.

What people unfamiliar with the legal process often misunderstand, however, is that the court isn’t merely looking at the law in deciding whether the case merits a trial. Rather, the court first looks to see whether all the material (or, in plain English, important) facts are undisputed.

If there are genuine disagreements as to key factual issues, then the case has to go to a trial to let a jury or judge decide the key facts.

A car accident case is the easiest way to understand this.  Suppose there is an accident at an intersection and the key issue is who had the right of way.  Driver A says the light was green. Driver B says light was red.  Witness C says the light had just turned yellow.   In this situation, there is a genuine issue as to what color the light was and therefore, who had the right of way. It’ll be up to a jury to weigh the evidence and decide who is to blame for the accident.

Continue Reading What Happens in a “He Said/She Said” Case? A Trial

At 47 pages, U.S. District Court Judge Hall’s decision last week in Costello v. Home Depot USA (download here) denying an employer’s motion for summary judgment in an overtime case, isn’t exactly a light read. 

More Saving, More Doing? Not so with litigation

She is, of course, not to blame. The case is complicated and has a “somewhat convoluted procedural history” because it was first filed in 2004 (!) and certified (and then decertified) as a collective action that alleged that Home Depot misclassified mechandising assistant store managers as exempt.

But after nine years of litigation, the Court was finally asked to decide whether Home Depot properly classified these two of these assistant store managers as exempt from overtime pay. 

The position of “assistant store managers” has been the source of lots of litigation over the last decade.  So it’s worth taking a look at what the court did.

Procedurally, it denied the motion for summary judgment saying that there were issues of material fact that precluded the granting of the motion. In other words, the case has to be decided by a fact-finder and jury, and not by the court itself on the papers.

Substantively, the crux of the case centers on whether the employee’s “primary duty” was “management of the enterprise”. 

As to one employee, the emplioyer argued that the employee:

(1) ensured his departments were properly staffed; (2) planned the work to be done in each department; (3) delegated work to his subordinates and followed up to make sure it was done in a timely and correct manner; (4) ensured his subordinates were trained, both for their current position and so they would be ready to advance to the next level; (5) ensured proper merchandise was ordered; (6) inspected his departments for safety violations; (7) resolved employee and customer complaints; (8) made recommendations regarding annual raises for his employees; (9) counseled associates on disciplinary issues; (10) recognized his subordinates for exceptional performance; and (11) devised strategies to improved department sales.

Sounds like it should be enough to win the case, right? The employee countered by saying that “while he performed many of these tasks, in many instances — particularly related to hiring, firing, and scheduling decisions — ultimate decision-making power and discretion lay elsewhere.”  The Court actually says that these facts do indeed lean in favor of the employer, not the employee.  

So why did the court still reject the employer’s motion?

Because taking other factors like whether the employee spent a substantial amount of time performing non-exempt work, and whether the exempt duties the employee performed were of relative importance to the job, led the court to the conclusion that there were genuine disputes as to what actually occurred.

No doubt the decision is frustrating to the employer (and other employers) who laid out a number of facts that even the court — at times — found persuasive.

But ultimately, the case is an important one for all employers to understand exactly what factors a court will look at in determining whether assistant store managers are exempt, and how important it is for employers to have its rationale locked in with supporting documents and affidavits.

These types of inquiries are very fact-specific. But even here, where the employer seemed to spell out lots of details to support its argument, sometimes, a lot of evidence isn’t good enough.

Costello v. Home Depot

This morning, Jon Hyman over at the Ohio Employer’s Law Blog, reported on a 6th Circuit decision that suggested that an employment discrimination claim could survive even in the absence of a jury finding an “adverse employment action.”

Yesterday, a District Court decision in Connecticut said exactly the opposite.  Indeed, the court granted an employer’s motion for summary judgment because, it found, there was no evidence to suggest that the employee was ever subject to an “adverse employment action.”

You can download the case, Holland v. State of Connecticut, here.

So what IS an “adverse employment action”?  As the Court recounts, it must be “a materially significant disadvantage with respect to the terms of [a plaintiff’s] employment.” 

What types of things are we talking about? “A significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”

In the Holland case, the plaintiff alleged that he had been accused of slashing a fellow employee’s tires and that there had been an investigation where he was informed he could be terminated as an outcome. Even though the investigation revealed no involvement by him, the plaintiff alleged that his inability to work with his co-worker hindered his advancement opportunities.   

The federal court disagreed.  “An employee does not suffer a materially adverse change in the terms and conditions of employment where the employer merely enforces its preexisting disciplinary policies in a reasonable manner.”  In other  words, merely being called “into a meeting and told of an investigation and its possible consequences” isn’t an adverse employment action. 

As for his advancement opportunities, the court also disagreed with the plaintiff’s assertions.  “Nothing in the record suggests that [plaintiff] has been hindered from advancement… in any way, either because of his race or [his co-worker’s alleged] animus.

The case continues a trend in Connecticut of the courts dismissing cases for lack of an adverse employment action and shows the importance, for employers, of following policies.  When done so properly, courts (at least in Connecticut) tend not to challenge that approach.

I’ll be the first to admit that the words “Sarbanes-Oxley Act” are likely to induce a big collective yawn from many of you out there.  Even the acronym “SOX” doesn’t liven things up.  (Then there are people, like Doug Cornelius at the Compliance Building blog who eat this stuff up.)

But here’s what you need to know as an employer: Terminated employees can bring a whistleblowing claim under SOX without using the words “fraud” but just by complaining about what they perceive to be as a violation of federal law.  Indeed, the caselaw on these claims is starting to mirror the pattern of retaliation claims — and we all know how notoriously difficult it is to defend against those types of claims.

SOX, not socks.

A relative new case out of the federal court in Connecticut illustrates this issue.  In Barker v. UBS AG (download here), the employer’s motion for summary judgment was denied on a SOX whistleblower claim. 

What does a terminated employee (who, the employer contends, was terminated during a reduction in force) have to show to get her case to trial? Initially, to establish a prima facie case, the plaintiff must demonstrate by a preponderance of the evidence that: (1) she engaged in protected activity; (2) the employer knew of the protected activity; (3) she suffered an unfavorable personnel action; and (4) circumstances exist to suggest that the protected activity was a contributing factor to the unfavorable action.

If the plaintiff meets her burden, the employer can then avoid liability if it can prove by clear and convincing evidence [a much higher standard of proof] that it would have taken the same personnel action in the absence of the protected activity.

And what is “protected activity”? This is where things differ slightly from retaliation claims. Here, as the court explains it.  the employee must she “had both a subjective belief and an objectively reasonable belief that the conduct [s]he complained of constituted a violation of relevant law” and  the employee’s communications “must definitively and specifically relate to [one] of the listed categories of fraud or securities violations” in SOX.

Continue Reading Pull Up Your SOX: The New Whistleblowing Claim Grows Up

It will come as no surprise to employers that summary judgment (essentially, throwing out a case before trial) in employment cases in state court is hard to get.  State judges are typically reluctant to grant such a motion, which means cases get scheduled for trial — an expensive and uncertain proposition at best for employers. 

When employers do get summary judgment, their victories may be shortlived. Just ask the employer in the case of Li v. Canberra Industires (download here), which will be officially released on March 27, 2012.

In that case, the employer had criticized the plaintiff for many months on her performance and the employer had the documentation to support it.  In fact, she was told that if her performance didn’t improve, she could be fired.  She was transfered to a new supervisor.

Continue Reading Court: Employee’s Complaint Trumps Performance Issues

As I’ve lamented from my very first post, too often the press focuses on new cases that are brought without placing them in context. Yet every month, federal and state courts in Connecticut consider dozens of employment law cases that never make the headlines.

What We Can Learn...

One such case is Jacobs v. Connecticut Community Technical Colleges, decided by the federal court a few weeks ago. In that case, an instructor at Tunxis Community College in Farmington, claimed that he was discriminated against based on his gender and sexual orientation.

But the court dealt with this matter on summary judgment in a fairly routine basis.  From a legal perspective, there isn’t anything novel about the decision.

First, it found that sexual orientation claims are not covered by federal law — not a surprising development at all. Second, it found that many of his allegations were time-barred (each discrimination claim has a deadline by which it must be brought).

Third, it said that even on the remaining claims of discrimination and retaliation, the employee had not satisfied the “prima facie” case — the bare minimum that a plaintiff must show to get past this stage of the case. While he claimed that his teaching schedule was materially different from female faculty members, the court failed to see that and said that any differences could not be attributed to his gender.

So, if this case is so routine, why do I bring this up? Because the press tends to focus on the sensational cases.

But there are dozens of cases like this that occur all the time and they’re still time-consuming, tedious, and ultimately costly to the employer. Even cases like this one that, in the court’s view, don’t seem to have much merit, have to be litigated, briefed and fought. Employers that are ultimately in the right, may still have to spend tens of thousands of dollars in attorneys fees to get to that point.

And you’re not likely to see those points in the headlines.

The running joke by employment lawyers is that even though Connecticut is an at-will employment state, employees can sue their employers at any time for any reason or no reason at all.  (I’ll wait while you laugh groan.)

Neither rain, nor sleet. Maybe snow...

The joke touches on the perception by employers that employees can seemingly file the most frivolous of complaints. And the perception that courts will not take any action to dismiss those claims.

A new case out of the federal district court in Connecticut shows how that perception can be wrong, however.

In Friedman v. USPS, a letter carrier (who suffered from lateral epicondylitis — tennis elbow) claimed that employer violated the ADA when in changed his status even though it did not affect his income, his seniority, his ability to secure further employment with USPS or cause him any actual or imminent economic injury.

When the employer filed for summary judgment, it did not bother to go through the normal burden-shifting analysis. Rather, it said that the employee lacked “standing” (or the right) to proceed with his claims at all.

Why?

Continue Reading Court: No Injury by Employer = No Standing = No Case

Last week, a federal district court in Connecticut held that the Department of Corrections violated federal law in instituting a discriminatory physical fitness test that created a disparate impact on women.  It also found that the test was not job-related or necessary.  

In doing so, the court granted summary judgment to the employee and the class of similarly situated job applicants. 

In Easterling v. State of Connecticut (download here), a federal district court held that a requirement that women candidates for promotion be required to complete a 1.5 mile run test was not a necessary job requirement.  

This "disparate impact" case may have important ramifications, particularly if upheld on appeal.

First, the decision relies extensively on the use of statistical evidence. Here the court said that 55% of women passed the test, while 79% of men did.  Thus, the ratio of female passage rate compared to male was 70.6%.  But the court emphasized that the party must still show a cause link.

In doing so, the court first looked at the "four-fifths" rule (or 80 percent) and stated that anything greater than that will typically not be regarded as evidence of an adverse impact.  It is not an automatic rule, but will depend on the circumstances.

The court also said that the second method of establishing causation is a statistical test that "measures that observed differences in outcomes between two groups are attributable to random variation".  The disparity must be typically exceed "two standard deviations".  What does that mean? In plain English it means that there is only a 5% probability that the variance is due to chance at "two standard deviations".  

Second, the case also calls into question the use of some types of physical fitness tests for jobs. Employers who use such tests should consider consulting with counsel about whether the test has a disparate impact and whether the test is necessary at all.  The Court’s decision explains at length that there is a "complex" legal history involved. 

As a practical matter, the case is also notable because it is the very rare case in which the court will grant an employee’s motion for summary judgment.

What’s the Takeaway for Employers?

  • Consider reviewing any physical fitness tests you may institute and consider involving counsel in a review to ensure that such tests do not have a disparate impact on a protected group
  • If such tests are being used, ensure that they are truly "job-related"; consider revising the test to just those elements that can meet the legitimate business expectations of the position
  • If you believe that something might have a disparate impact, don’t rely on the raw numbers; consider the involvement of a statistical expert who can help you better understand items just as the "four fifths" rule or the "two standard deviations". 

Easterling

You’ve seen a lot on this blog about how the ADA Amendments Act (ADAAA) may have a significant impact on how employment discrimination cases proceed.

We haven’t had many cases yet to judge that on because the Act was not retroactive, but a case recently decided in Connecticut District Court gives us some insight into how courts may view such claims.

In Eaddy v. City of Bridgeport (download here), a former probationary police officer claimed that her employment was terminated for lack of fitness for duty.  She claimed — under the old version of the ADA — that her employer "regarded" her as disabled because the police chief allegedly described her behavior as "irrational, irate, and uncooperative as well as paranoid". 

The District Court disagreed.  Because the termination occurred in July 2008, it used the the pre-ADAAA standard.  That standard, said the court, states that in order to prevail, the plaintiff must show that her employer regarded her as "having an impairment that would be significantly limiting to the average person in the population". 

The Court, having looked at the statement, said that there was no indication that the chief was using the terms "irrational" and "paranoid" in a clinical sense.  Any reasonable jury, he suggests that the reference is not "a suggestion that Ms. Eaddy suffers from paranoid delusions in the psychiatric sense, but rather that she is irrationally distrustful of her peers and the police department.". 

The Court teases that the standard has changed.   And indeed, looking at the ADAAA itself, it is not difficult to see that the analysis may very well have been different.

Pursuant to the ADAAA, an employee is now “regarded as” disabled—and thus entitled to protection from discrimination—if the employer believes the employee has any physical or mental impairment, regardless of whether the employer believes the impairment limits a major life activity at all.

Would that have changed the outcome here? We’ll never know but I suspect we’ll quickly find out as cases mature. 

Of course, even with this change, employers should not assume the employee is automatically entitled to a victory either; the employee must still show underlying discrimination. But it does overcome a major issue that had stood in the way as the Eaddy case demonstrates.

In broad terms, the First Amendment prohibits public employers from retaliating against employees who engage in "protected speech".   (Connecticut has a statute, Conn. Gen. Stat. Sec. 31-51q that purports to apply the First Amendment to private employers too.)  But proving these cases remains difficult for employees.  

And even victories may later end up as defeats as a recent case out of the Second Circuit (originating in Connecticut) highlights.

Sousa v. Rocque may sound familiar to blog readers. That’s because in 2009, the Second Circuit reversed a lower court decision granting summary judgment to the employer, finding that the speech that the employee engaged in may be protected. (I covered it back then here.)  

But the case was remanded with a suggestion that the lower court proceed with a "Pickering" balancing analysis — based on a Supreme Court case of the same name.

According the Second Circuit, “The Pickering test . . . poses two questions (the first being implicit in Pickering): (1) whether the employee’s speech as a citizen was on a matter of public concern, and if so, (2) whether the employer has shown that the employee’s interest in expressing himself on that matter is outweighed by injury that the speech could cause to the employer’s operations.”

The lower court did such an analysis and again granted the employer’s motion for summary judgment (download).  The District Court (Judge Hall presiding) concluded that everything about the speech indicated that it was part of a "private personnel dispute" and not the type of dispute that the public would be interested in. 

The employee appealed the decision again to the Second Circuit. This time, the Court upheld the lower court’s decision via a summary order (download here).  On what grounds? Well, the Court merely adopted the lower court’s "well-reasoned" opinion, thereby blessing the District Court’s characterization of the dispute.

For employers, it’s a lesson in perseverance and in understanding that First Amendment cases can be won on various grounds.  For employees, the case shows that even "victories" can be short-lived. As a result, the case can be used by employers for settlement purposes to show the difficulty in proving such cases.