Maryland Employment Law Developments

EEOC’s Miserable Expert Dooms Credit Check Discrimination Case

The Fourth Circuit yesterday affirmed a lower court decision that the EEOC could not go forward in a case challenging credit and criminal background checks.

The Equal Employment Opportunity Commission, charged with investigating workplace discrimination, sometimes takes a case to court itself. Most discrimination charges are left to the individual to pursue in court.

In this case, EEOC v. Freeman, the EEOC decided to follow up on one person’s complaint that the background check constituted illegal race discrimination. The theory goes that because minority applicants are more likely to have an arrest or criminal record, or poorer credit scores, the reliance on these checks can lead to racial discrimination. These theories have supported challenges to written tests or the requirement of a high school diploma, which tended to exclude applicants from a lower socioeconomic status. Courts therefore required employers to show that the tests or diploma requirement bear a reasonable relationship to the job duties.

Credit background checks must be related to job necessities under Maryland law. This law provides a floor of job-relatedness. The tendency of practices to favor white candidates, even though it is unintentional, can still support a race discrimination suit.

The EEOC had to show that the use of these background checks had a disproportionate effect on minority candidates as stated It hired a statistics expert who produced a terribly inadequate report. The expert’s report had errors, such as miscoding the relevant data, and double counting. The biggest problem was his “cherry-picking” data, all older data at that. The court had no trouble upholding the lower court’s decision tossing his work as unreliable. Without the statistics, the EEOC could not show the link between the practice and discrimination.

The concurring opinion pointed out the saddest aspect of this case: the EEOC’s reliance on an expert who had been criticized by other courts for his unusable reports, and its arguments that the court should let in the error-laden conclusions anyway.

EEOC Settles Case Alleging Racial Prejudice at High End Restaurants

A new settlement in an EEOC case brings to mind the intersection between old racial prejudices, subtle remainders, and the perceived preference of customers. The EEOC sued McCormick & Schmick, which occupies two nice waterfront spotsin Baltimore’s inner harbor. The case started in 2008 (yes) but involved a large number of claimants. The suit alleged that the restaurant chain persistently routed African American employees and applicants to back of the restaurant jobs.

The suit alleges that the restaurants ads were nearly devoid of minorities, and so were the dining areas. The settlement sets up a fund of $1.3 million for claimants who were denied jobs as wait staff, bussing staff, bartenders, or hosts at the restaurants. It also requires revamping of procedures, monitoring and review of the hiring numbers.

The case never went to trial, but with that level of settlement I have to assume that the EEOC had a fair amount of good evidence that it kept the customer experience fairly minority-free. At some level of a pattern, it is fair to infer that intentional discrimination is going on. Customer preference, whether real or perceived, does not provide an excuse under the anti-discrimination law. These kinds of practices serve to perpetuate a kind of mental segregation. When an upscale restaurant subconsciously conveys the impression that “this is a white place,” we drift backwards.

This year, the 50th anniversary of the passage of the Civil Rights Act of 1964, we should celebrate integration in all areas of our lives.

Are We All Working Too Hard?

A new poll has confirmed what many of us already know. Americans work more than a 40-hour week. This poll by Gallup shows that our usual idea of full-time work has crept upward.

It’s not surprising that employees on salary work more hours than people paid on an hourly basis: five hours more on average. Still, the study concludes that a person with an engaging job is better off than someone who is miserable but can clock out at exactly 40 hours a week.

That’s a point worth noting, but the number of hours worked may not take into account the constant checking in that many people are required to do, or just do to keep up. Checking email from home or wherever they are, responding to texts, all take time and attention, and blur any line between home and work. Further, the amount of time it takes to get to work has increased for many people who find that traffic gets worse each year.

I know not everyone will take off on Labor Day, but I hope you do get some break from the job. The holiday is supposed to remember the struggles to make the workplace saner; we shouldn’t give away all of those gains by small erosions into our lives. Happy Labor Day.

the law

New Clarification in Maryland Wage Law

The Maryland Court of Appeals decided a case this month about whether employees deprived of overtime must sue in federal court, or can choose to vindicate their rights under state law. Although Judge Sally D. Adkins stated that there should have been no doubt about the protections available under state law, the Court decided clearly and unanimously that state law protects employees who were deprived of their overtime wages. Muriel Peters v. Early Healthcare Giver, Inc.

The differences between federal and state law in this area range from obvious to subtle. For one thing, both Maryland and federal law require time and a half wages to be paid for hours worked over 40 in a week (with exceptions that can get complicated). But some employees are exempt from overtime; the federal and state laws do not overlap completely.

Once an employee proves entitlement to overtime pay, federal law usually provides an employee an amount equal to the unpaid overtime wages as “liquidated damages.” So an employee who should have been paid $5,000 in overtime will ordinarily get a judgment for $10,000 under the federal law. The state law permits a judge or jury to award three times the amount of unpaid wages (whether overtime or regular wages). But the standard is harder to meet. An employee has to show that there was no good faith dispute about the wages; even then, the tripled amount is not mandatory. Both laws allow an employee who proves the case to get attorneys’ fees, but under state law the fees are given only if the employee proves the lack of a good faith dispute.

While that may make federal court seem the wiser choice, in reality state court is often a friendlier place to bring a lawsuit. Each county has a courthouse; Maryland has only two federal courthouses, in Baltimore and Greenbelt, so the distance can be a problem. In addition, federal judges are more likely to grant a defendant a win before trial, based on the papers filed in court. Whichever court is chosen by a plaintiff, it is helpful to have both laws available.

Courts Slowly Accepting the ADA Expansion

In 2008, Congress amended the Americans with Disabilities Act to fix Supreme Court and other cases that had narrowed the door through which disabled employees could fit their claims. Since then, the cases have gradually reflected the broadening of the definition of disability. Cases that arose under the old law were still judged under the old, restrictive standards. There can’t be many more of those left to litigate, after six years.

But sometimes changing the minds of courts used to applying the restrictive viewpoint is a slow process. A recent Fourth Circuit case underlines this tendency, Summers v. Altarum Institute. An employee was seriously injured while commuting home from work. His injuries required surgery and therapy; he was not expected to walk normally for seven months. Soon after his injury, though, he suggested to his employer that he ease back into work with some remote work, some part-time work, and eventually he would return. The employer told him to concentrate on recovery, and then, six weeks after his injury, fired him.

The trial court dismissed the case, reasoning that his temporary condition did not meet the definition of disability under the law. The Fourth Circuit reversed, stating definitively that a temporary disability qualifies under the amended law. The employer argued that he was not substantially limited in the ability to walk, as he alleged, because he could have used a wheelchair. Stunning reasoning: I used to believe that under the former version of the ADA only wheelchair users could count on qualifying as disabled. For our circuit, anyway, this case sweeps away such notions, and stands behind the law and the regulations expanding on the definitions.

NLRB Gives Up On Poster Rule

More than two years ago, the National Labor Relations Board created a poster and required all employers under its jurisdiction to post it. The poster gave employees a comprehensive recap of their rights, including the right to form unions, to communicate with each other about terms and conditions of employment, and to be free of retaliation for complaining. It also listed employees’ rights not to join a union, and to be free from retaliation by the union for not joining or for criticizing it.

The progress of the rule appeared here and here.

The poster attracted immediate challenges by employer groups. After losing in two appeals courts, including our Fourth Circuit, the NLRB announced that it would not seek review by the Supreme Court. Its website makes the notice available, and it emphasizes that employers may post the notice even without the rule. The likelihood of that happening is low. The NLRB originally proposed the poster because of anecdotal evidence that many employers believed that some employers were permanently non-union.

Senate to Consider Ban on Credit Checks for Job Applicants

Massachusetts senator Elizabeth Warren introduced a new bill this week called the Equal Employment for All Act, designed to end the common practice of using credit reports to screen out applicants for jobs. The proposed law

The law would broadly forbid using or procuring a credit report, regardless of the applicant’s consent. As with many decisions in modern life, consent is a black and white proposition: consent to this lengthy user agreement, or your phone won’t work; consent to these disclosures or we won’t consider your job application. The use of credit reports to discriminate against someone whose unemployment led to financial issues or uninsured medical bills, for example, leads to more income inequality.

he main exception is if the person needs or has a national security clearance. The other is “unless otherwise required by law.”

The Maryland credit report ban is much narrower than the proposed federal statute, and permits an employer to obtain a credit report if the candidate would work with finances, for example, would work for a bank, credit union, investment advisor, or have access to trade secrets. I reported on this law when it passed in 2011.

If the federal law passes, an employee or applicant could rely on his or her federal rights under the Equal Credit Opportunity Act and sue in federal court if a credit report led to a rejection of a job or a promotion.

Supreme Court Clarifies Time Limitations in ERISA Cases

The Supreme Court today announced a decision that upheld a long-term disability plan’s provision requiring a lawsuit to be filed within three years of the claim. In Heimeshoff v Hartford Life & Accident Insurance Co., the court decided that the limitation period was reasonable, and the claimant under the plan bound by the deadline. The case arises under the Employee Retirement and Income Security Act (ERISA), imposing federal rules over all employee benefit plans. For whatever reason, Justice Thomas seems to write most of the ERISA decisions for the Supreme Court. Today’s decision was unanimous. The Court held that unless it is unreasonable, the time limitation in a plan (the parties’ contract) will be upheld.

The seesaw between the two sides comes with the requirement in employee benefit plans that the claimant have available, and use, an internal appeal procedure. Usually that procedure doesn’t take as long as three years. But some internal procedures have multiple steps, and sometimes one party or the other needs additional time to process the claim, seek additional medical records, engage a specialized consultant, and so on. This is more likely to happen in a disability case than a pension dispute. The issue whether someone is disabled permanently or for the indefinite future can be difficult to determine, involving questions of medical condition, potential cures, and suitable occupations available to the claimant.

Under ERISA, the claimant has to go through the administrative process in order to sue. In federal court, the review is limited to whether the decision made at the administrative level was either incorrect or arbitrary (depending on the way the plan is written). Therefore creating a good record at the internal appeal is crucial.

But someone can wait too long, even if it’s not all the claimant’s fault for the delay. In this case, the claimant did wait to file in court for nearly three years after the final decision, she was not forced to choose between waiting for a ruling and filing in court. But that ruling took well over two years, so she did not have a lot of time to head to federal court. This is the same kind of problem that plagues discrimination claimants though, where the state’s two year statute of limitations can slide by unnoticed while the Maryland Commission on Civil Rights continues to dig through its pile of backlogged cases.

In every lawsuit, it’s essential to get a handle early on the statute of limitations and how it affects a right to sue in court. If settlement or administrative remedies break down, someone might need that final option, and should not let the time tick away altogether.

Supreme Court Will Decide Whether Affordable Care Act Conflicts with Religious Freedom

Some for-profit companies claim that they, because of their owners’ religious beliefs, should be exempt from the requirement that their health insurance plans provide contraception. The Supreme Court has decided to dive into these claims, one brought by Hobby Lobby, an arts and crafts retailer, and one by a Mennonite cabinetmaker with only about 500 employees. The New York Times article following the announcement identifies this fight as a cultural one, modernity vs. tradition.

Although the immediate point of these cases continue the challenges to Obamacare, the more basic principle shines a light on how to accommodate religious beliefs in the workplace. Employers are required to accommodate religious beliefs if it is possible without undue disruption. Must employees accommodate an employer’s religious freedom? The employers here cite the Religious Freedom Restoration Act, requiring that a person’s freedom to worship “shall not substantially burden a person’s religious exercise” unless the burden can be justified. The employers contend that they should not have to pay for a benefit plan that enables (but of course does not require) their employees to obtain cheaper birth control.

Sebelius v. Hobby Lobby Stores, Inc. is the lead case. The question presented to the Supreme Court is framed as follows:

The Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. 2000bb et seq. , provides that the government “shall not substantially burden a person’s exercise of religion” unless that burden is the least restrictive means to further a compelling governmental interest. 42 U.S.C. 2000bb-1(a) and (b). The question presented is whether RFRA allows a for-profit corporation to deny its employees the health coverage of contraceptives to which the employees are otherwise entitled by federal law, based on the religious objections of the corporation’s owners. By combining this case with the Conestoga Wood Specialties Corp. case, the Supreme Court is expected also to address the issue of the extent of First Amendment rights to religious freedom enjoyed by corporations, as well as the statutory issue presented by the Religious Freedom Restoration Act. If corporations are persons for the purpose of the First Amendment freedom to worship clause, then does this law violate their rights?

If the contraception mandate is found to violate a corporate employer’s right to worship, the implications for other workplace issues can be profound. An employer’s sincerely held views could easily conflict with a worker’s right to resist a boss’s proselytizing on his (or its) own religion; with a family’s decision to allow a woman to work after having a baby; or with an employee’s choice of activities outside the office. To me, it seems inconsistent with pursuing a profitable enterprise to claim that a law applicable to most businesses in the country can’t be applied to a business whose owners oppose birth control. The owners seem sincere, however, in objecting to a law they see as constricting their choices of benefits to offer. Unless the Court ends up resolving the case on narrow procedural grounds, as sometimes happens, this group of cases will have far reaching significance.

Senate Passes the Employment Non-Discrimination Act

Legislation to outlaw employment discrimination against people on the basis of their sexual orientation has been proposed many times since 1994. This year may see its passage, though. With more states approving gay marriage, and prominent politicians on both sides of the aisle approving of the notion of equal rights for gay citizens, the time may have come to add it to the national civil rights protections.

Earlier this month, when ten Republicans in the Senate voted with all Democrats to pass the Employment Non-Discrimination Act, a barrier crumbled. A Republican amendment to protect religious groups from complying with the law put the effort over the top.

Maryland legislation protects employees from being discriminated against on the basis of their sexual orientation; we have yet to add gender identification. Maryland legalized gay marriage by voter referendum. While this effort will probably top out at 30 or so states, the momentum is strong now, and at least in parts of the country, should

In light of the Supreme Court’s recent opinion in U.S. v. Windsor erjecting the Defense of Marriage Act, together with shifting public attitudes towards same-sex marriage and LGBT rights, many insiders believe the time is ripe for ENDA.