Nolo's Employment Law Blog

Yesterday, the Supreme Court issued one of the most anticipated decisions of this term, Ricci v. DeStefano. Ricci is a reverse discrimination case, in which 18 firefighters (17 white and one Hispanic) sued the city of New Haven for refusing to certify test results that would have put them in line for promotion. New Haven didn't certify the test results because white applicants scored so much higher than African American and Hispanic applicants that the city feared it would be sued for race discrimination by nonwhite candidates if it relied on those results. The Court's decision left the city (and by extension, all other employers) precisely midway between a rock and a hard place. And the opinions the court issued in the case reveal markedly different views on the purpose of laws prohibiting discrimination.

Here are the basic facts (the combined opinions run to 93 pages, so I'll try to cut to the chase): The city of New Haven gave oral and written tests to candidates for promotion to the positions of lieutenant and captain. The results were combined, weighted (the written test was worth 60% of an applicant's score and the oral test made up the remaining 40%), and used to rank candidates who passed the test. When a position was available, it had to be given to one of the top three candidates on the list. White candidates passed at a significantly higher rate (and with higher scores) than African American and Hispanic candidates, resulting in promotion lists that looked like this: All ten of the candidates who would have been considered for a promotion to available lieutenant positions were white, as were seven of the nine candidates for available captain positions.

Upon seeing these results, the city determined it had a potential problem: Nonwhite candidates might sue based on a disparate impact theory, claiming that although the test was facially neutral, it had the effect of discriminating based on race. After holding a series of hearings, the city ultimately didn't certify the test results. A group of firefighters who did well on the test sued, claiming that the city's refusal to rely on the test results was discriminatory.

The five-Justice majority ruled against the city and in favor of the mostly white test takers. Justice Kennedy, writing for the majority, found that the city's decision not to certify the test scores was itself based on race (the marked racial disparity in the test results, that is) and was therefore discriminatory. The majority also found that the city's fear of a disparate impact lawsuit if it certified the test results was not an adequate defense unless the city had a "strong basis in evidence" to believe the results were discriminatory.

This "strong basis" standard is new to Title VII cases, and has led to much commentary that asserts that the Court changed the rules in discrimination cases. The Court also left employers in a deep bind: Rely on test results that create a racial disparity and risk a disparate impact lawsuit; disregard those test results and risk a disparate treatment lawsuit. In this very case, African American firefighters have said they will sue for disparate impact if the city does as the Court says it must and certifies the test results.

Here are a few of my takeaways from this case:

Anyone still think we're "post-racial"? Reverse discrimination cases highlight a profound split in the way race -- and civil rights laws -- are viewed in this country. Those laws were passed to remedy particular types of discrimination, against groups that have been historically disadvantaged. As Justice Ginsberg's dissent pointed out, there is a long history of racial discrimination against African Americans and Hispanics in the field of firefighting, New Haven has been part of that unfortunate history, and this is part of the reason why Title VII was extended to cover municipal governments. Reverse discrimination allegations don't speak to this legacy: Instead, they claim that any consideration of race is wrong, period, as the majority opinion did in this case. No matter which side of this debate you come down on, it's clear that we have not come to any kind of consensus about what role -- if any -- race should play in our decision making.

Will this be on the test? One of the basic facts underlying this case is the continuing, seemingly intransigent racial disparity in written test scores. As some of those who testified before the city in this case pointed out, statistics still show that whites tend to score better on standardized written tests than African Americans and Hispanics, and we still don't really know why. In this case, New Haven clearly tried to come up with a test that wouldn't produce this result, and failed. So why are written tests still so common in so many fields? Is a written test really the best way to determine who will be the best lawyer, student, driver, firefighting supervisor? It's a question employers should certainly consider, especially now that the Supreme Court has said that there might be a lawsuit with your name on it whether or not you rely on the results of a test that reveals a racial disparity.

Just days before this weekend's gay pride celebrations, Representative Barney Frank introduced the Employment Nondiscrimination Act (ENDA) in the House of Representatives. ENDA would outlaw employment discrimination on the basis of sexual orientation or gender identity.

The gender identity part didn't make it into the bill last time around, much to the consternation of many LGBT activists. This year's model is referred to as "inclusive" because it includes gender identity protection. (Prohibiting discrimination based on gender identity, defined as a person's gender-related appearance, mannerisms, characteristics, or identity, with or without regard to the person's designated sex at birth, would protect transgendered employees and employees who don't conform to the stereotypes associated with their gender.)

The bill -- H.R. 2981 -- has a number of similarities to existing laws that prohibit discrimination. (You can find it at the Library of Congress's THOMAS website; search for the bill number.) It would apply to private employers with at least 15 employees (like Title VII and the ADA), prohibit discrimination in every aspect of employment, prohibit retaliation, and use the same enforcement mechanisms and procedures as Title VII. However, there are some key differences:

• Disparate impact claims may not be brought under ENDA. Only intentional discrimination is prohibited. 
• In case you didn't hear it the first time, the bill explicitly doesn't prohibit employers from enforcing rules or policies that do not intentionally violate the law, as long as those rules or policies are enforced consistently. In other words, really no disparate impact claims.
• Employers may enforce their usual dress and grooming codes during work hours, as long as they allow employees who have already undergone gender transition, or are transitioning while employed, to conform to the standards of the gender to which the employee is transitioning.
• Employers don't have to create new or additional facilities (restrooms, changing rooms, and so on) to comply with the bill. However, employers must allow the employee reasonable access to facilities that are "not inconsistent" with the employee's gender identity, as established when the employee was hired or when the employee notifies the employer of a gender transition.
• The military and religious organizations won't have to comply with the law.
• The bill doesn't require employers to offer the same benefits to unmarried couples as to married couples -- and, for purposes of the bill, "married" is defined as in the Defense of Marriage Act (DOMA), as between a man and a woman. So married same-sex couples might not be married under this provision.  

ENDA has been kicking around Congress for more than a decade, but the possibility of passage looks brighter this year, given the political makeup of the House and Senate and the support of President Obama (whose administration is currently drafting rules to protect federal transgendered employees from discrimination).  

I was shocked by the front page article in the New York Times today, "Mind Your BlackBerry or Mind Your Manners." According to the article, an etiquette debate has broken out over the use of smart phones at meetings -- in other words, and here's where I was surprised, one side of the debate takes the position that it's just fine. They argue that they may need to respond to a client or customer immediately, and that engaging in text "chatter" by smart phone with others at the same meeting can loosen things up and stimulate creativity.

Nice try. Unless you're taking notes or calling up documents or information for the group's benefit, using a BlackBerry, Apple iPhone, or another communication device with a catchy fruit-flavored name at a meeting is just the most recent form of age-old meeting behavior: Not listening. If you really must be in constant communication with clients and customers, here's an idea: Skip the meeting. If you want to spur creativity and engage in witty banter, why not make your comments out loud? Probably because you didn't want to say them to everyone. Which means you're not only not listening, you're also excluding coworkers and creating a clique-like feeling in the room. Believe me, everyone else can tell you're texting each other. 

Full disclosure: I really don't like meetings. I start stacking my papers and blurting out "adjourned" as soon as I sense an opening. So I'm hoping part of the solution to this etiquette problem is fewer meetings. Really, if no one is listening, the meeting probably isn't that important and everyone could have just skipped it. But if the meeting is necessary, people shouldn't be forced to sit through this kind of rude behavior. Unless there's a meeting-related need for employees to use smartphones, ask that phones be turned off. Employees who are expecting an important communication can set phones to vibrate -- then take the call or respond to the message outside. Let's make meetings shorter and more efficient for everyone.  

Yesterday, the Supreme Court issued what's likely to be a controversial decision in an age discrimination case. The plaintiff, Jack Gross, sued his employer, FBL Financial Services, claiming that he had been demoted because of his age. (A younger employee, whom Gross had trained, was assigned many of his former responsibilities.) A federal jury found in favor of Gross, and awarded him almost $47,000.

FBL appealed, claiming that the judge gave incorrect jury instructions. The argument boils down to who has to prove what in an age discrimination case. In other types of discrimination cases (those brought under Title VII), if the plaintiff can show that the forbidden characteristic played a role in the decision being challenged, the burden of proof shifts to the employer, which must show that it would have made the same decision regardless. These are referred to as "mixed motives" cases. The shifting burden gives the employer an affirmative defense: Even though the statute was violated because an illegal factor was considered, the employer can argue, in essence, "no harm, no foul," by showing that the bias ultimately didn't dictate the outcome. 

In yesterday's decision, the Court said this framework doesn't apply to age discrimination cases. The plaintiff has the burden to prove that age was the "but-for" cause of the decision -- that is, that the decision wouldn't have been made if not for the age discrimination. The burden of proof never shifts to the employer. If mixed motives are at work (for example, biased comments by decision-makers and poor performance reviews), it's up to the plaintiff to show that bias made the difference.

Here are a couple of things I found interesting about the case:

• Role reversals. Justice Thomas, thought to be a member of the "judicial restraint" wing of the Court, wrote the majority opinion. As Justice Stephens' dissent points out, that opinion asked a question the parties hadn't asked the Court to answer. Clearly enjoying the opportunity, Stephens accuses the majority of "unnecessary lawmaking," "utter disregard of our precedent and Congress' intent," and "inattention to prudential Court practices," all charges more typically levelled against Stephens and his fellow dissenters.
• Congressional intent. The mixed motive framework that applies to Title VII cases was ratified by Congress in the 1991 Civil Rights Act. The crucial bit of language in the ADEA that the Court analyzed in this case is identical to language in Title VII. Stephens argued that this means Congress expects the Court to apply the mixed motive burdens in ADEA cases; Thomas argued that if Congress wanted that, it should have said so explicitly. I have a feeling Stephens will be proven right here; Congress hasn't been shy about overturning the Court on employment issues (see the Lilly Ledbetter Fair Pay Act, for example).
  

It's all about the box -- the "standard 4"x 4" plexi cube" that each Starbucks store is required to use as a container for tips, that is. Last week, a California Court of Appeal overturned a huge class action award to Starbucks baristas, finding that it was perfectly legal to divide tips from the box among the baristas and shift supervisors who worked each shift. The shift supervisors were the cause of the dispute. Attorneys for the baristas argued that they shouldn't be allowed in the tip pool because, as supervisors, they were agents of the employer, and such agents can't share tips under California law. (Section 351 of the California Labor Code provides that "no employer or agent shall... receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron....")

The trial was largely about whether the shift supervisors are agents -- that is, whether they really had enough managerial authority to elevate them out of the ranks of the baristas and make them representatives of the employer. But the Court of Appeal didn't spend any time on this issue -- it didn't even decide whether or not the shift supervisors really are agents. Instead, it focused on the "left for an employee" part of the statute, finding essentially that the customer had already pooled the tips among all of the service employees by putting them in a communal tip box. Because the shift supervisors spent much of their time serving customers, and customers knew that their tips would be divided among the employees providing service, it was appropriate to divvy the tips, even if the supervisors were agents.

The more I think about this decision, the odder it seems, for several reasons:

• The court emphasized that employees are free to keep tips given directly to them by a customer -- it's just the tips in the box that get divided. In other words, this case isn't about tip pooling, because the tip was left for a group of employees in the first place. In my decades of patronizing my coffee chain of choice, I've never seen a customer tip an employee directly. This isn't how tips work for counter service, yet the court's decision is based on this distinction between a type of tips that exists and one that largely doesn't. 

• The court focused on customer expectations. But that approach makes the statute meaningless in this context. Shift supervisors are only the lowest level of managers at Starbucks, which also has assistant managers and store managers who spend a lot of time serving customers, too. They aren't allowed to share tips per Starbucks policy, but under the court's reasoning, they should. All the customer sees is someone serving coffee and pastries. If the customer's understanding is all that matters, CEO Howard Schultz should get his fair share of the tip box if he spends an hour pulling espresso shots.

• Customer expectations haven't won the day in other types of tip pooling cases. For example, California courts have repeatedly held that it's legal to require restaurant wait staff to pool tips with bussers, dishwashers, cooks, and other employees who contribute to the service of the diner, as long as no employers or agents are allowed in the pool. Although diners may not object to tips being divided in this way, I don't think that's what most expect when leaving a tip.

• The "agent" argument is the key to the other cases the court cites. For example, the court discusses a casino case in which dealers had to share tips with other employees including shift and floor managers. That case found that it was legal to require tip pooling with employees as long as they weren't agents. Based on job duties, the court in that case found that the floor managers were not agents -- and so could share in the tips -- but the shift managers were agents and therefore not entitled to tips. The court could have analyzed the Starbucks case in just this way, but chose not to.

All of this isn't to say that the baristas have a slam-dunk case. It sounds like the shift supervisors spent most of their time serving customers too, and really didn't receive much more compensation for doing it. Their actual job duties will reveal whether they have "the authority to hire or dicharge any employee or supervise, direct, or control the acts of employees," the definition of an agent. But I think this -- whether or not the shift supervisors are agents -- is the crux of the case, not whether the tips go into the box or the hand.

Today, Judge Sonia Sotomayor is making the rounds in Congress, meeting and greeting Senators as they prepare to offer President Obama their "advice and consent" on his Supreme Court nominee. Many hot-button issues are sure to be discussed, from the death penalty to the right to privacy, the proper role of the courts, and much more. Judge Sotomayor's six years as a federal District Court judge and more than ten years on the Second Circuit Court of Appeals have yielded plenty of opinions for advocates to parse -- and apparently more than 100 of them address labor and employment issues. You can see a detailed list, with links, at the excellent Jottings By an Employer's Lawyer blog.