Posted by marykeating on May 26, 2010 under Discrimination in employment, Race-based discrimination | 
In another win for employees charging discrimination, the Supreme Court decided that firefighter applicants could sue for racial discrimination whenever the City of Chicago used an allegedly discriminatory test to fill openings. A class of African-American applicants claimed that the test, and its use, had a disparate impact on African-Americans. The City rejected all applicants scoring at 65% or lower, and decided that all applicants scoring at least 89% were eligible for the next stages of testing. Those who passed the test, but did not score at least an 89, were notified that it was unlikely that they would be called for any openings.
The African-American applicants contended that the test had a disparate impact on black candidates. That is, the test had the effect of eliminating proportionately more black than white candidates. At that point, it is up to the employer to show that the test is sufficiently related to the job requirements that its disparate impact is unfortunate but acceptable.
At the Supreme Court, Chicago admitted that the use of the 89% cutoff was unlawful. It tried to convince the Court, though, that there was only one discriminatory act, the 1996 test and its use to create three groups of people: rejected, qualified, and “well-qualified.” Since no one filed charges of discrimination within 300 days of the announcements of the three lists, it contended that all claims were too late to challenge the test and its scoring.
The Court held that not only the original adoption of the practice, but also the application of the practice, were incidents of discrimination. Therefore the class members were able to file charges of discrimination each time the City used the test.
This decision, authored by Justice Scalia, was unanimous. It is limited to the kinds of actions that do not require proof of discriminatory intent, that is, practices that have the effect, presumably unintended, of discriminating against one group.
Still, it has interesting language seeming to soften the widely criticized (and legislatively dismantled) Ledbetter decision. Quite often, the procedural issues relating to timing and proof structure have monumental consequences for employment discrimination victims, so this case, limited or not, is a positive step.
Posted by marykeating on May 25, 2010 under Employment benefit issues |
The Supreme Court usually ends its term in June with the real blockbuster decisions (though the decision holding that corporations have free speech rights, issued in February, may prove to be the most significant).
Yesterday a unanimous court ruled that the Fourth Circuit was wrong in denying a disability claimant the right to recover attorney’s fees and costs.
I commented on this pending case here, Hardt v. Reliance Standard Life Ins. Co.
The Fourth Circuit denied attorney’s fees to the long-term disability claimant, on the theory that she did not show that she was a “prevailing party.” Her long-term disability carrier had denied benefits, she appealed internally, was denied repeatedly, and finally filed suit. The court found fault with the insurance company’s reasoning, which had ignored much of the available evidence, and ordered it to reconsider. If it failed to reconsider all of the evidence, the court warned that it would enter judgment in favor of the claimant. On reconsideration, the insurance company finally changed its decision and paid the plaintiff her disability benefits. Therefore the only further court proceedings involved the claimant’s attorney fee request, which the trial court granted, and the Fourth Circuit vacated.
The Supreme Court rejected the idea that the claimant had to qualify as a “prevailing party.” That usually means that a judgment is entered in favor of the person. The words of the statute did not require prevailing party status (although many others do). Instead, the Court borrowed from an early case interpreting the Environmental Protection Act (Ruckelshaus v. Sierra Club, 463 U. S. 680, 694 (1983)), and held that “a fees claimant must show ‘some degree of success on the merits’ before a court may award attorney’s fees under §1132(g)(1).” Justice Stevens disagreed with using a different law to guide the interpretation of ERISA, but agreed with the result.
This decision is important to employees who are so often rejected on their first claims for benefits under disability policies. Navigating the requirements for benefit claims can be a major undertaking. The decisionmakers, often the insurance companies that ultimately will pay the benefits, require medical records, interviews, questionnaires, medical tests, and often have short timelines for these requirements. Appeals at the administrative level must be handled with a lot of attention to detail, so that if necessary a federal court can be persuaded that the claimant has the bulk of the evidence on her side. Then, if the claimant is successful, the only damages that ERISA allows are the benefits themselves! The hardship of living without income, the burden of complying with all of the demands of the insurance company, the emotional toll – none of these can be elements of damage in court. But the attorney’s fees and litigation costs are available, IF the claimant “shows some degree of success” on the merits. The Supreme Court cut off an easy escape hatch for the insurance company. It was certain to lose in court if it persisted, and by relenting on the benefits it hoped to deny the claimant attorney’s fees. Her persistence paid off, at least by not costing her additional money for pursuing benefits for which her employer had paid premiums.
Posted by marykeating on May 21, 2010 under Sex-based discrimination, Uncategorized |
After finding Novartis liable for wide-spread sex discrimination, the same jury returned a $250 million punitive damages verdict to the class of victims in the Novartis sex discrimination case. The jury announced its award on May 20, after hearing argument and evidence on the company’s worth. The 5,600 class members will be entitled to be heard on the scope of each of their damages. In these situations, the court appoints a special master to administer the pooled fund. In addition, these class members (other than the 12 plaintiffs represented originally in the six week trial) will also be entitled to seek their own compensatory damages, which are based on emotional distress. The judge may also award more back pay damages; $37 million is being sought.
Of course, that assumes that this verdict is final, and that is a lot to assume. Simply by virtue of the verdict’s size, Novartis is sure to appeal it. Many punitive damages awards have been reversed or, more commonly, reduced. A reduction could happen at the trial court level, as lawyers file post-trial motions complaining of the conduct of the trial, the size of the verdict, and various evidentiary issues. This dispute will probably take a few more years to resolve completely. Yet, for the women who have been waiting for as long as eight years, the announced verdict itself must be a victory, and changes at Novartis are a virtual certainty.
The case is Velez v. Novartis Pharmaceuticals Corp., 04 Civ. 9194, in the Southern District of New York.
Posted by marykeating on May 18, 2010 under Sex-based discrimination |
Yesterday a Manhattan jury wound up almost a week of deliberations and rendered a $3.3 million verdict in favor of the 12 named plaintiffs against Novartis AG. The class of 5,600 female sales representatives in the United States will also be able to continue a second phase of trial, and prove punitive damages. The women complained that since 2002 they were kept out of higher management, and according to their lawyer, “tolerated a culture of sexism, a boys’ club atmosphere.” One woman testified that her boss told her to get an abortion after she reported she was pregnant; others talked about managers who took male sales representatives to strip clubs.
This case represents the second largest employment class action on behalf of women, after the Walmart case recently certified to go forward. The jury found that Novartis had engaged in systematic gender-based discrimination, paying women less than similar male employees, failing to promote women to managerial positions, and treating pregnant women less favorably.
The punitive damage phase will begin today, with the jury being told that the value of the company is $9.5 billion.
Posted by marykeating on May 16, 2010 under retaliation |
The Maryland Court of Appeals issued an opinion last week in favor of a health care whistleblower. An employee had made internal complaints about serious safety issues at the hospice facility where she worked. She was fired before she could take the complaints further. Under the eight year old law protecting health care whistleblowers, the Court held that she had the right to a trial to prove that she was fired in retaliation for her complaints about the unsafe practices.
Under this particular whistleblower law, a health care employer must correct violations of the law that endanger the health and safety of patients. In addition, many employees, nurses among them, have personal obligations to report violations to the licensing board. In this case, the nurse complained to her supervisor about the lax oversight of narcotic dispensation. For example, “starter packs” of controlled pain medications had been delivered to families of pediatric patients without taking appropriate safeguards to ensure that other children in the house were protected.
Before the employee could go to the nursing board, she was fired. The Court of Appeals decided that it was counter-productive to require an employee to complain outside of the health care facility, if the complaint resulted in corrective action. In addition, the highest court rejected the argument that the employees engaging in the illegal behavior were not responsible for setting policy at the facility.
The case is limited to this specific statute, which details the requirements that the employee report the issue internally and give the employer a chance to correct the problem, and that the problem “poses a substantial and specific danger to the public health or safety.” Still, one statement of the Court is intriguing: it agrees with the commentary of Paul Tobias, a founder of the National Employment Lawyers Association, quoting the following passage:
“Although it would clearly seem to be in employers’ interest to encourage employees to report violations internally before (or instead of) making reports to governmental authorities, a number of courts that have addressed the issue have held that the public policy tort doctrine does not protect a whistleblower from retaliation unless he or she has gone outside the company with reports of wrongdoing.
“The majority (and better) view, however, is that internal protests are enough, and that the viability of a public policy tort claim by a discharged whistleblower does not depend on whether or not the violations or illegal activities were reported to outside authorities.”
Paul H. Tobias, Litigating Wrongful Discharge Claims § 5.13 (1987 & Supp. 2009-10)
The Court then stated: “We agree with that observation.” This statement may foretell a loosening of the difficult standard facing whistleblowers who do not fit the mold of the health care workers. For those workers, it has been the law that unless they go to an outside agency, that is report to the “appropriate authorities,” retaliatory firing is perfectly legal. Perhaps Maryland is ready to join the majority of states which do not require that outside report.
Posted by marykeating on May 14, 2010 under Economic situation |
Governor Martin O’Malley reported that the state’s use of the American Recovery and Reinvestment Act funds from the federal government resulted in positive job effects. Specifically, the Governor’s press release reports that 13,821 jobs were created or saved during the quarter ending March 31. Of those 13,000 jobs, only about 3,500 were paid for directly by the federal subsidy. The others were indirectly created (for example, jobs in industries supplying the federally created projects), or “induced,” meaning that the increased spending in the state saved or created a job in a restaurant or retail store. Eventually, of course, the economy has to hum along on its own steam, but the recovery dollars have held off a worse recession.
Posted by marykeating on May 11, 2010 under Religious discrimination, retaliation |
Chief Magistrate Judge Paul Grimm issued an opinion recently that dives into the murky waters of anti-discrimination laws and religious institutions. Under current law, religious institutions have some immunity from discrimination on the grounds of religious beliefs. They can insist upon employing “individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.” That is, a synagogue can refuse to hire a Baptist as its administrative assistant; it can fire an employee for a religious observance that conflicts with a work schedule.
But Judge Grimm drew the line at religious harassment. Lori Kennedy, a member of the Church of the Brethren, complained of being harassed and eventually terminated because she adhered to a certain dress code dictated by her religion. Having decided to hire a non-Catholic at a Catholic hospital, the institution was not permitted to harass an employee whose modest dress and head covering were called inappropriate in a Catholic institution. The court decided that the harassment is not permitted under Title VII, the federal anti-discrimination statute. 
An interesting twist involves the plaintiff’s claims for illegal termination. Her claim of religious harassment will go to trial. She also complained that she was fired in retaliation for complaining about the harassment, and in violation of her right to be free of religious discrimination. The latter claim fails. The Catholic church is free to fire her for her religious beliefs. But the retaliation claim survives, since it arises out of the harassment. Her damages are the same for either claim.
Posted by marykeating on May 7, 2010 under Economic situation, Unemployment compensation |
Maryland just became the first state to be entitled to receive $126,750,124 from the United States Department of Labor for unemployment insurance modernization incentive funds. Maryland was the first state to amend the law to become entitled to these funds. The state can use the money for benefits, to administer the program, or add employment services to the unemployed.
The federal program gave an incentive to states to assist part-time workers, people just entering the workforce, and those seeking to upgrade skills. Rather than simply providing job lists and benefits, for example, the funds will help people adjust to changing economies. Though Baltimore has been classified as part of the rust belt for some time, other types of jobs are going overseas, and Marylanders with certain skills find that their old skills are not wanted on this continent any longer. New training programs will help people figure out what skills are still in demand, and how to get them.
In the short term, of course, the money is a boon to a nearly bankrupt fund. As employers know, the rate of unemployment contributions has grown enormously, and this grant from the federal government may at least stop future increases in the tax rate.
Posted by marykeating on May 6, 2010 under Sex-based discrimination |
Last month, the Fourth Circuit overturned a trial judge’s decision to reject a sex discrimination claim before it got to trial. Deborah Merritt will now have a jury decide her claim that Old Dominion persists in applying sex stereotypes to its employees.
Merritt was a line haul driver for six years, taking freight to distant states. She wished to transfer to a local driving job so she could spend more time at home. The job is more physically demanding, since the driver does the loading and unloading of the freight. Its hours are more regular, though, and so some employees find it more desirable.
Only six out of the 3,100 local drivers at this company were female. Merritt also produced evidence that her supervisor said that “a girl should not have that position,” in part because the company was afraid women would be hurt on the job. Still, after several applications, and after making sure the men at the terminal did not mind working with a woman, Old Dominion placed her in the job. She did well. Six months later Merritt hurt her ankle and had to take some time to recover. When she was ready to return, she was put through a full-blown fitness test that is only given, occasionally, to new hires. She failed the test, but for reasons unrelated to her ankle injury and unrelated to her ability to perform the work. (For example, she was too short to reach a shelf.) The company fired her and replaced her with male workers.
In reversing the dismissal, the Fourth Circuit considered the pretextual policy of requiring injured workers (only on rare occasions) to take this test, and the statements by Merritt’s boss. It stated, “A plaintiff does not need a ‘smoking gun’ to prove invidious intent, and few plaintiffs will have one.” In this case, “evidence of a good employee record combines with evidence of an impermissible company attitude to form a lethal concoction.” In his concurrence, Judge Davis emphasized that company tests must be applied in a neutral manner.
