The EEOC is warning against hiring discrimination.  Law.com has the news here.

There is a new employee rights poster required for government contractors.  The Pennsylvania Labor & Employment Blog has a post on the topic here.  Official copies of the poster can be found here.

Ninth Circuit Court of Appeals reverses summary judgment for the employer in an ADA reasonable accommodations case.  Workplace Prof Blog has a post on the case here.  The opinion is worth reading to gain insight into the interactive process that is now required of employers in these situations.

Proposed legislation would expand FLSA coverage to in-home workers.  Wage and Hour Developments has a post here.

Wal-Mart files appeal to U.S. Supreme Court of class action decision by Ninth Circuit.  Law.com has the story here.

DOL Fact Sheet:  Break Time for Nursing Mothers Under the FLSA.

The Court declined to enforce the covenant not to compete, but did find a nonsolicitation clause enforceable.  The case illustrates the heightened scrutiny that covenants not to compete now face in Virginia.  Boilerplate noncompete agreements are unlikely to survive this scrutiny, so employers that care about the enforceability of a covenant not to compete are well-advised to invest in review of the agreement (and revision if necessary) by competent labor counsel.  Unfortunately, without clear guidance from the Virginia Supreme Court or the General Assembly, drafting an enforceable covenant not to compete remains an exercise in uncertainty.

CA – A Korea-based food company and owner of a Los Angeles restaurant agreed to pay $170,000 to settle a sexual harassment suit brought by the EEOC on behalf of a class of female employees who alleged they were harassed by their manager.

AL – A truck transportation company will pay $100,000 to settle a race discrimination and retaliation suit filed on behalf of a group of employees who alleged they were subject to a racially hostile work environment and then retaliated against when they complained about the discrimination.

IL – Silgan Containers Manufacturing Corporation agreed to pay $45,000 to settle a race discrimination suit brought on behalf of a former employee who alleged he was fired because of his race after only one month on the job.

MO – A billboard company will pay $55,000 to settle a sexual harassment and retaliation suit filed on behalf of a female employee who alleged she was subject to sexual harassment by her manager, and then fired after she complained about the conduct.

TN – Terminix International agreed to an $80,000 settlement in a sex discrimination suit brought on behalf of a former employee who alleged she was fired because she was pregnant.  The company had granted the employee medical restrictions for six weeks before terminating her employment.

MI – A health services provider agreed to pay $45,000 to settle a disability discrimination suit brought on behalf of an employee who alleged she was discriminated against because of her history of depression.  The company had granted the employee a leave of absence but then refused to allow her to return to work.

NM – A staffing firm will pay $62,500 to settle a retaliation suit brought by the EEOC on behalf of a former office supervisor who alleged he was fired for supporting a sexual harassment complaint made by a female employee.

TX – A Sears store agreed to pay $30,000 to settle an age discrimination suit filed on behalf of a 61‑year‑old job applicant who alleged he was refused a position because of his age.

IL – Jerseyville Elks Lodge will pay $107,500 to settle a sexual harassment and retaliation suit brought on behalf of three female bartenders who alleged they were sexually harassed and then retaliated against when they complained about the conduct.

MD – A transcription company agreed to a $30,000 settlement in a disability discrimination suit brought on behalf of a part-time employee with multiple sclerosis who alleged she was denied a full-time position because of her disability.

KY – A hotel managing company will pay $40,000 to settle a religious discrimination suit brought on behalf of four female employees who alleged that the company failed to provide an accommodation by not allowing them to wear their hijab to work.

PA – A farm growers’ cooperative agreed to pay $300,000 to settle a sex and national origin discrimination and retaliation suit brought on behalf of a class of female farmworkers who alleged they were subject to harassment by male coworkers and then retaliated against when they complained about the treatment.

OH – A temporary agency agreed to a $650,000 settlement in a class discrimination suit brought by the EEOC alleging that the company had engaged in discriminatory practices by profiling job applicants on the basis of race, sex, age, and national origin.  The suit also alleged that the company complied with discriminatory requests made by its clients, and unlawfully fired employees who opposed the discriminatory practices and participated in the EEOC’s investigation.

CA – Hilltown Packing Company will pay $48,000 to settle a sexual harassment and retaliation suit filed on behalf of a group of female employees who alleged they were harassed by their supervisor and then retaliated against for opposing the harassment.

The plaintiff, Teresa Hale, was a former employee of Dolgencorp, Inc., which operates Dollar General stores across the country.  During the relevant time, Hale was employed as a store manager and earned a salary.  Hale claimed that she did not fall within the executive exemption for overtime pay under the FLSA and was therefore entitled to overtime compensation.  Under the FLSA, employers are required to pay time and a half to employees who work over forty hours a week, unless the employee falls under an exemption.  The executive exemption under the FLSA applies to employees who qualify as “executive or managers.”  The FLSA regulations state a test for determining whether an employee is exempt:  (1) the employee is compensated on a salary basis at a rate of no less than $250 per week; (2) their primary duty is management of the enterprise; and (3) the work includes customary and regular direction of the work of two or more employees. 

Here, the issue involved was whether the employee’s primary duty was management of the enterprise.  Hale testified that she spent about ten percent of her time in a given week performing management duties, and the remainder was spent on performing menial labor, such as cleaning, stocking, and working the register.  In its analysis, the court first laid out the factors used in determining what constitutes a “primary duty”:  (1) the amount of time spent performing managerial duties; (2) the relative importance of managerial duties compared to other duties; (3) the frequency with which the employee exercises discretion; (4) the relative freedom from supervision; and (5) the relationship between the employee’s salary and the wages paid to other employees for nonexempt work performed by the supervisor. 

With respect to the first factor, the court held that a reasonable jury could conclude that Hale spent very little time actually managing the store based on her testimony that she spent the majority of her time performing menial tasks.  With respect to the second factor, Dollar General argued that it principally valued Hale’s management abilities.  The court found, however, that a reasonable jury could conclude that Dollar General mainly valued Hale’s ability to perform store clerk duties (such as stocking shelves and working the register), as well as her ability to promptly report any problems to her supervisor, who would then advise her on how to proceed.  As to the third factor, the frequency with which Hale exercised discretion, the court found that even though Hale was permitted to engage in the hiring, training, and discipline of employees, as well as in setting work schedules, Dollar General had rules in place that limited Hale’s ability to truly exercise discretion.  For example, the court stated that although Hale created the work schedules, she had no control over the amount of labor hours allotted to her store, and that she did not have authority to discipline or terminate employees without the district manager’s approval.  With respect to the fourth factor, the court noted that while the district manager spent very little time actually supervising Hale’s store, he left frequent voicemails for Hale with specific instructions regarding the operation of the store.  Finally, the court found that Hale’s salary, when converted to an hourly rate, was essentially the same as what a clerk earned.  The court concluded that based on application of the five-factor test, a reasonable jury could determine that Hale’s primary duty was not management, and therefore denied the defendant’s motion for summary judgment.

In EEOC v. Mount Vernon Holdings, LLC, the EEOC filed suit on behalf of a group of former employees of a Best Western hotel who had not been re-hired when the hotel changed ownership.  Under the previous owner, the hotel had been in very poor condition and on the verge of losing its Best Western membership.  Pursuant to the terms of the Purchase and Sale agreement, all employees were to be terminated prior to the closing, with the new owner retaining discretion to re-hire any of the former employees.  The new owner hired twenty individuals for the hotel staff, including ten former employees of the hotel.  Of the twenty individuals hired, eleven were of Hispanic national origin, and of the ten re-hired employees, six were Hispanic. 

The EEOC’s discrimination suit alleged that the hotel had a “preference” for hiring Hispanic individuals for housekeeping positions based on the fact that seven of the eight housekeepers were Hispanic.  The court disagreed, stating that the same manager who hired the Hispanic housekeepers had also hired non-Hispanic individuals at the same time.  The court also found that there was no direct or circumstantial evidence of discrimination, and that the EEOC had failed to meet its burden of advancing sufficient evidence from which a reasonable jury could conclude that national origin was a motivating factor for the employment decision. 

With respect to direct evidence of discrimination, the court found that deposition testimony contradicted the EEOC’s assertion that the hiring manager had made comments related to Hispanic employees being “good workers.”  The court also found that the EEOC had failed to establish a prima facie case of discrimination.  As to the third element, the court stated that the former employees were not qualified for the position based on evidence of ongoing performance issues.  Even if a prima facie case could be established, the court found that the defendant had demonstrated legitimate, non-discriminatory reasons for not re-hiring certain employees.  The individuals who were selected for re-hiring were those that had shown the requisite attitude and willingness to perform their jobs in a manner that would allow the hotel to meet the Best Western standard.  The court noted that after about five months of hiring the new staff, the hotel began earning “Excellence in Housekeeping” awards.  The court also found that the EEOC had failed to advance any evidence that the defendant’s reasons were pretext for discrimination.

The plaintiff had brought unpaid wage and overtime claims against the defendants in the amount of $50,000.  The defendants made an offer of judgment which the plaintiff accepted, and the court entered judgment against the defendants in the amount of $50,000, plus reasonable attorneys’ fees and costs incurred through the date of the judgment.  The plaintiff originally sought attorneys’ fees and costs in the amount of $34,607.13.  The plaintiff subsequently moved to reduce the fees by ten percent, which represented the amount of discovery sanctions imposed upon the defendants.  The defendants opposed the fee petition on the grounds that certain hours expended were related to the prosecution of the case against other defendants. 

The court began its analysis by laying out the factors used to determine what constitutes “reasonable” attorneys’ fees in the Fourth Circuit:  (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney’s opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney’s expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorney’s fees awards in similar cases.

The court stated that the most critical factor in determining the reasonableness of an award is the degree of success obtained by the plaintiff, and that the award could be reduced to account for that amount of success.  Here, the court found that the majority of the factors weighed in favor of the plaintiff, noting that with respect to the customary fee charged for similar work, the rate charged by the plaintiff’s counsel was “reasonable or even low” for an attorney with that amount of expertise and experience.  Further, the court found that the rates were at or below the rates set forth in the Laffey Matrix used in Washington, D.C.  Similarly, the court found that the hours expended were reasonable and perhaps even low given the nature of the tasks involved.

MA – A national denture provider will pay $150,000 to settle a sex and race discrimination suit brought by the EEOC on behalf of two female employees who alleged they were harassed by an affiliated dentist.

PA – A temporary staffing company agreed to pay $12,000 to settle a sexual harassment and retaliation suit brought on behalf of a group of female employees who alleged they were subject to harassment by a male supervisor at an assigned work location. 

MD – An aircraft systems company agreed to a $130,000 settlement in an age discrimination suit brought on behalf of a 61-year-old employee who alleged he received poor performance reviews and was refused a promotion because of his age.

MN – A federal district court ruled in favor of the EEOC on the employer’s summary judgment motion in a disability discrimination suit.  The court found that there was an issue of fact on whether a job applicant who was deaf could have performed the job with a reasonable accommodation, especially in light of the fact that the applicant had previously performed that same type of work.

CA – A motorcycle dealership will pay $55,000 to settle a sex discrimination and retaliation suit brought on behalf of a female employee who alleged she was refused a position as a mechanic while the company hired less qualified men as mechanics.

MI – An automotive supplier has agreed to pay $190,000 to settle a race discrimination and retaliation suit brought on behalf of a group of minority employees who alleged they were denied promotions.

GA – A staffing company will pay $125,000 to settle a race and age discrimination suit brought on behalf of an employee who alleged she was discriminated against because of her race and age and then fired in retaliation after she complained about it.

AZ – A packaging manufacturer will pay $250,000 to settle an age discrimination suit brought on behalf of three former employees who alleged they were fired because of their age.

FL – Avea Drug Delivery Systems agreed to pay $58,000 to settle a disability discrimination suit brought on behalf of a former employee with renal disease who alleged she was fired upon returning from a medical leave of absence.

FL – Hilton Grand Vacations will pay $25,000 to settle a pregnancy discrimination suit brought on behalf of a former employee who alleged she was persuaded to resign her employment because of pregnancy-related complications and then not rehired, contrary to the company’s promise to rehire her after she gave birth.

AZ – Yuma Oak Tree Inn agreed to pay $75,000 to settle a religious discrimination suit brought on behalf of former employees who alleged they were forced to engage in a religious prayer ceremony despite their different religious beliefs.

AK – Starbucks will pay $80,000 to settle a disability discrimination suit brought on behalf of a job applicant with multiple sclerosis who alleged he was not hired because of his disability.

TX – Two Sonic franchises agreed to pay $55,000 to settle a sexual harassment suit brought on behalf of female employees who alleged they were harassed by their managers.

IL – A nationwide staffing company will pay $100,000 to settle a disability discrimination suit brought on behalf of a blind female employee who alleged that her job offer was revoked when the company learned of her disability.

NC – A scrap metal processing company agreed to settle an age discrimination suit for $10,000 brought on behalf of a 76-year-old man who alleged he was passed up for a position because of his age.

CA – A construction company will pay $50,000 to settle a national origin discrimination suit brought on behalf of a group of Hispanic workers who alleged they were subject to verbal harassment by their supervisor.

MS – A plastic molding company agreed to pay $190,000 to settle a sexual harassment suit brought on behalf of female employees who alleged they were harassed by a male supervisor and co-worker.

MD – The Community College of Baltimore County will pay $50,000 to settle an age discrimination suit brought on behalf of an employee who alleged she was not hired for a position because of her age.

AZ – An oral surgery clinic will pay $118,775 to settle a pregnancy discrimination suit brought on behalf of a female employee who alleged she was fired because she was pregnant, and another employee who alleged she was not hired after the company learned she was pregnant during an interview.

GA – A home builder agreed to a $378,500 settlement in a race and sex discrimination suit brought on behalf of a group of African-American sales agents who alleged they were discriminated against with respect to their compensation because of their race.  As part of the settlement, the builder also agreed to hire at least ten African-Americans and women into management positions over a six year period.

TX – Cinram Wireless will pay $40,000 to settle a religious discrimination and retaliation suit brought on behalf a former employee who alleged the company failed to accommodate her Sabbath, and then fired her in retaliation for complaining about it.

CO – PETCO agreed to pay $145,000 to settle a disability discrimination suit brought on behalf of a deaf pet groomer who alleged she was penalized during performance reviews because of her disability.

GA – State and county government agencies will pay $60,000 to settle an age discrimination suit brought on behalf of a former employee who alleged she was fired because of her age.

D.C. – A group of police officers were awarded $900,000 in a suit against the police department alleging they were retaliated against for filing a racial discrimination complaint.  The Washington Post has a story about it here.

CA – A jury awarded $159,000 to a former state agency supervisor who was terminated for reporting sexual harassment against female coworkers.

CA – A federal appeals court granted a new trial on punitive damages to a former employee who won a $2.45 million punitive damages award in a hostile work environment suit against her former company.  The trial court had reduced the award to $300,000 per the federal damages cap, but the appeals court held that punitive damages should have been determined in accordance with California law, which has no statutory cap for punitives.

NY – Drug-maker Novartis agreed to pay $152.5 million to settle a gender discrimination class action that resulted in a $250 million punitive damages award in district court.

In Whitney, Bradley & Brown, Inc. (“WBB”) v .Christian L. Kammermann, WBB alleged that Kammermann, a former senior manager, started his own consulting firm, CLK Executive Decisions, LLC (“CLKED”), during the last several years of his employment with WBB.  The Complaint alleged that on fourteen different occasions, Kammermann was reimbursed for expenses from WBB, and billed his CLKED clients for the same expenses, generating an extra $13,387.95 for himself.  WBB also accused Kammermann of submitting inaccurate timesheets.

Kammermann submitted his expenses reports to WBB via Federal Express, and to his clients via email.  WBB claimed that his a double-billing amounted to a RICO violation; the court disagreed.   The fourteen occasions of double-billing, spread over a twelve-month period, was not alleged to be a “continuing” pattern of behavior, as must be shown to demonstrate an open-ended scheme.  Nor could WBB establish a “close ended” RICO scheme, because the number of predicate acts was too slight, was not varied, had only one victim, and was a single scheme, rather than a number of separate schemes.

First, the amendment established a new administrative procedure for unpaid wage claims of less than $3,000.  Md. House Bill 404 (2010).  A complaint for these small claims can be filed with the Commissioner of Labor & Industry, who in turn has the authority to investigate the claim and issue an order for payment.  The employer has 30 days in which to request a hearing, after which the order becomes final and enforceable in court.

Second, the amendment changed the definition of “wages” under the WPCL.  Md. Sen. Bill 694.  (Bill history here.)  Previously, overtime claims could only be brought pursuant to the federal Fair Labor Standards Act (“FLSA”) or Maryland’s Wage Payment Act.  Now, the WPCL “wages” includes overtime wages, meaning they will be susceptible to the treble damages provision, which are available when monies are withheld for anything other than a bona fide dispute. 

The new provisions are effective October 2010.

Sandra Porter was employed by Elk Remodeling, Inc. (“Elk”) from March 2004 until April 2007, first as an Administrative Assistant and then as General Manager.  Porter had been receiving premium reimbursements from Elk for her individual health insurance policy since 2005.  Porter had been the only employee receiving this benefit.  In March 2007, Elk distributed health insurance applications to its employees, with the exception of Porter, in connection with a group healthcare plan it was planning on implementing.  Around this time, Porter overheard Elk’s principal, Timothy Shellnutt, make a reference to a “breeder” during a telephone conversation.  Porter believed this comment was in reference to her. 

In April 2007, Elk submitted an application for group healthcare coverage to CareFirst BlueCross BlueShield (“CareFirst”).  The coverage was for Shellnutt and his family, plus two full-time male employees.  Elk represented to CareFirst that it had three full-time employees and that Porter had been terminated.  A week later, Porter confronted Shellnutt about the group plan, secretly recording their conversation on a microcassette tape recorder.  During the conversation, Shellnutt told her that it would be much more expensive to insure Porter on the group plan initially, but that if she signed a waiver of enrollment she could be added to plan later on.  Shellnutt advised Porter that in the meantime she would still be reimbursed for her individual plan premiums.  Porter asked Shellnutt why it would cost more to add her to the group plan, to which Shellnutt replied that he thought it was because Porter was female, already had a child, and could get pregnant again, while the other employees on the plan were both single and childless.  After Porter refused to sign the waiver, Shellnutt stated that he would not get the group plan for anyone, and that he would no longer reimburse Porter for her premiums.  Porter’s employment with Elk was then terminated.

Porter filed suit against Elk alleging gender discrimination and retaliation claims under both Title VII and the VHRA, interference with attaining rights provided by an ERISA-defined plan in violation of ERISA, and wrongful discharge.  Porter ultimately dismissed the Title VII claims. 

In its pretrial motion for summary judgment, Elk argued that there was no employee benefit plan in place at the time of Porter’s termination, and thus it cannot be liable for interfering with Porter’s attainment of the plan.  ERISA defines “employee benefit plan” as “any plan, fund, or program . . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries . . . medical, surgical, or hospital care or benefits.”  Citing Fourth Circuit precedent, the court held that an employer’s payment of premiums on behalf of its employees constitutes substantial evidence that a plan was “established.”  Here, the fact that Shellnutt submitted an application to CareFirst and began paying the premiums was sufficient to show that the plan had been established within the meaning of ERISA.  The court also found that Porter was a participant under the statute.  ERISA defines “participant” as “any employee or former employee of an employer . . . who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer.”  The court stated that since all full-time employees of Elk were eligible for the plan, and Porter was a full-time employee, she would have become eligible for the plan if she had not been terminated, and therefore was a “participant” within the meaning of the statute.

The court went on to analyze whether Elk was motivated at least in part by a “specific intent to interfere” with Porter’s attainment of rights under the plan.  Applying the McDonnell-Douglas burden shifting framework, the court determined that there was a genuine issue of fact with respect to pretext.  Based on the evidence of the conversation between Porter and Shellnutt regarding her enrollment in the group plan, the court held that there was a question of fact about whether Porter’s termination was due to her “bad attitude” as Elk had asserted, or because of her refusal to sign the waiver of enrollment.

With respect to Porter’s state law claims, Elk argued that the claims were preempted by ERISA.  The court evaluated whether the claims were subject to ERISA’s preemption provision, which preempts all state laws that “relate to” an ERISA plan.  The court’s inquiry focused on whether the VHRA or wrongful discharge claims sought “relief under state laws that provide alternative enforcement mechanisms for claims that are actually ERISA claims.”  A state claim is considered an “alternative enforcement mechanism” if it could be brought as an enforcement action under section 502, ERISA’s enforcement provision.

As to the VHRA claim, the court stated that the VHRA does not provide an alternative enforcement mechanism because there is no cause of action for gender discrimination under ERISA, and therefore the claim does not “relate to” an ERISA plan under the preemption provision.  The court then held that Porter had presented sufficient evidence from which a reasonable jury could conclude that she was terminated because of her gender, and denied Elk’s motion for summary judgment on the VHRA claim.  The court granted Elk’s motion as to the wrongful discharge claim, stating that the claim was based on the public policy limiting discrimination in the allotment, price, and benefits of insurance policies based on unfair criteria, and was thus preempted by ERISA as “relating to” an ERISA plan.

The EEOC brought suit against Fairbrook Medical Clinic (“Fairbrook”) on behalf of a female physician, Dr. Deborah Waechter, who alleged she was subject to a hostile work environment by her supervisor and sole owner of Fairbrook, Dr. John Kessel.  Waechter alleged that Kessel made sexual comments and told crude jokes at work, ultimately driving Waechter to resign her employment.  The district court found that Kessel’s conduct was not sufficiently severe or pervasive to constitute a hostile work environment and granted Fairbrook’s motion for summary judgment. 

On appeal to the Fourth Circuit, Fairbrook argued that Kessel’s comments were not based on Waechter’s sex; instead, Fairbrook argued that Kessel made vulgar comments to both men and women equally.  The court stated that although Kessel made offensive comments to male and female employees, Kessel’s use of “sex-specific and derogatory terms indicate[d] that he intended to demean women.”  Therefore, the court determined that the nature of the remarks was such that a jury could conclude that Kessel’s comments were “based on sex.” 

Next, the court analyzed the “severe and pervasive” prong of the prima facie case.  The court stated that in order to be actionable, “sexual harassment must be objectively hostile or abusive, and the victim must subjectively perceive it as such.”  The objective part of the inquiry must be “judged from the perspective of a reasonable person in the plaintiff’s position, considering all the circumstances.”  Fairbrook argued that Kessel’s conduct, when viewed in the context in which it occurred, was not sufficiently severe to be actionable under Title VII; instead, it was merely the type of crude and vulgar behavior that is sometimes part of certain workplace environments.  The court disagreed, stating that Kessel’s comments were of a highly personalized nature aimed at demeaning and ridiculing Waechter.  The court held that “[w]hen assessing the severity of Kessel’s conduct, a jury could give significant weight to the intensely personal nature of this interaction.” 

The court also found significant the fact that Kessel was Waechter’s immediate supervisor and also the sole owner of Fairbrook, which meant that he had authority over Waechter on a daily basis and the ability to influence her career.  The court further concluded that the fact that Waechter may have made occasional off-color remarks herself did not negate her claim. 

Fairbrook also argued that Kessel’s conduct was not sufficiently severe because Waechter did not miss work and was not otherwise adversely affected by Kessel’s conduct.  The court stated that while relevant, these factors were not decisive.  “The critical inquiry is not whether work has been impaired, but whether working conditions have been discriminatorily altered.”  The court found that a jury could conclude that Waechter’s working conditions were altered by Kessel’s conduct. 

The court likewise dismissed Fairbrook’s argument that the absence of inappropriate touching or sexual advances by Kessel deemed his conduct not sufficiently severe or pervasive.  The court stated that “[a] work environment consumed by remarks that intimidate, ridicule, and maliciously demean the status of women can create an environment that is as hostile as an environment that contains unwanted sexual advances.”  Accordingly, the court concluded that the EEOC had proffered sufficient evidence from which a jury could conclude that Kessel’s conduct was severe or pervasive enough to constitute a hostile work environment, as well as sufficient evidence to raise a triable issue of fact as to whether Fairbrook “exercised reasonable care to prevent and correct promptly any sexually harassing behavior.”