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).  

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.

It's a good thing my employer offers paid sick leave. That meant I could stay home a few days ago with my summer cold. I was able to catch up on my sleep, and my office mate was able to not catch my cold. Many employees aren't so lucky: According to the Bureau of Labor Statistics, 39% of those who work for private employers don't get paid sick leave.

But that could be changing soon. Earlier this week, Rep. Rosa De Lauro (of Connecticut) reintroduced the Healthy Families Act, HR 2460. The bill would require some employers to offer paid sick leave. Sen. Ted Kennedy is expected to introduce a similar bill in the Senate this week, depending on the state of his own illness and how it affects his return to work. (To read the bill, search for "HR 2460" on the Library of Congress's THOMAS website.)

The bill would require employers with at least 15 employees to provide one hour of paid sick leave for every 30 hours an employee works, up to 56 hours per year. Employees could use the sick leave for their own illness, for preventive care, to care for a family member (defined broadly to include anyone related to the employee "by blood or affinity whose close association with the employee is the equivalent of a family relationship"), or to seek medical or legal assistance relating to domestic violence, sexual assault, or stalking.

This bill includes rights that already exist in a number of states and localities, although the federal bill knits together several types of state and local laws: paid sick leave laws, as are in effect in San Francisco and Washington, DC; so-called "small necessities" laws, which allow parents to take time off for their children's school-related activitites and often to take children to preventive care medical and dental visits; and domestic violence leave laws.

Last week, the Department of Homeland Security announced that it had issued new guidance to Immigration and Customs Enforcement ("ICE"). The new marching orders: Focus on employers, not employees. The press release on the new rules says that, effective immediately, worksite enforcement resources will be focused on the criminal prosecution of employers who knowingly hire unauthorized workers, "to target the root cause of illegal immigration."

The press release points out that previous efforts resulted in many more arrests of workers than employers. Of the more than 6,000 arrests ICE made in 2008 as part of its worksite enforcement program, 135 were employers, managers, and human resources personnel. The rest were the workers themselves.

Just as ICE is refocusing its efforts on employers, the Supreme Court took away one of its tools for prosecuting workers. The workers arrested by ICE often face criminal charges relating to their use of false identity information. Prosecutors could also tack on the charge of aggravated identity theft, which carries a two-year sentence extension, if the worker knowingly used someone's else's identification. According to the New York Times, prosecutors used the threat of that additional punishment to convince workers to plead guilty to lesser charges, such as document fraud.

Earlier this week, the Supreme Court held that the crime of aggravated identity theft requires the alleged thief to know that the identification information he or she is using actually belongs to someone else. In other words, a worker can no longer be charged with aggravated identity theft simply for making up a Social Security number; the worker must know that the number belongs to another person.

It's spring break, when thousands of college students follow the time-honored tradition of heading to warmer climates to party. But these days, when the job market for soon-to-be college graduates looks pretty bleak, spring break revelers might want to remember this: Prospective employers have Internet access. If a search for your name turns up, say, a photo of you at a party with the caption "Drunken Pirate," your job prospects might go from grim to nonexistent.

Recent news reports show that applicants and employees alike don't seem to realize that their Internet posts are public -- as in, employers can find them, read them, and perhaps figure out who posted them. That's what "theconnor" learned recently when, after being offered a job at Cisco, he tweeted the news, along with this commentary: "Now I have to weigh the utility of a fatty paycheck against the daily commute to San Jose and hating the work." Soon, someone from Cisco responded, "Who is the hiring manager. I'm sure they would love to know that you will hate the work. We here at Cisco are versed in the web." Then, the website "Cisco Fatty" was created to memorialize the whole incident. (Check out the whole story here.

Then there's the teacher who got fired for his MySpace page, which he said he created to communicate with students outside of school and build a better relationship with them. Apparently, the road to a better relationship was paved with nude photos, cursing, and inappropriate conversations. The teacher lost his wrongful termination lawsuit.

President Obama recently announced that he will send 4,000 additional troops to Afghanistan, on top of the deployment of 17,000 troops announced last month. Many of those deployed will be members of the National Guard and Reserve, most of whom must leave civilian jobs to serve in the military. According to Employer Support for the Guard and Reserve, members of the Guard and Reserve make up almost half of our country's total military force. As of last week, figures released by the Department of Defense showed that more than 700,000 members of the Guard and Reserve have been activated since 9/11.

When these service members return from duty and go back to their civilian jobs, they have fairly extensive employment rights. The Uniformed Services Employment and Reemployment Rights Act (USERRA) gives returning members of the Guard and Reserve the right to be restored to the position they would have held if they hadn't served -- that is, their former position, plus any additional seniority, promotions, raises, and so on they would have received had they been continuously employed. The most significant protection USERRA provides kicks in after reinstatement: Employees who return from military service are no longer at-will employees for up to one year. They may be fired only for just cause. 

A recent case from Connecticut shows just how costly it can be for employers to disregard USERRA. Michael Serricchio was called to active duty in the Air Force after 9/11. He left his job as a financial adviser at Prudential Securities; when he returned two years later, the company had been acquired by Wachovia and Serricchio was offered a position with a much lower rate of compensation than his previous job. A jury found that Wachovia had violated USERRA by failing to restore Serricchio to his previous position.

That left it to the Court to put a dollar amount on Serricchio's damages. The figure the court came up with was $778,906, plus interest, plus attorney fees and costs. And that's not all: The court also found that Serricchio was entitled to reinstatement, with a monthly salary of $12,300 for the first nine months, after which he will be entitled to the same amount as a draw against commissions for a few months, after which he will have to generate his own income from his client accounts. (You can find the opinion on damages, as well as an earlier opinion from March 2008 summarizing the issues in the case, here; use the caption search for "Serricchio.")

Recently enacted provisions of the Family and Medical Leave Act (FMLA) also provide some protections related to military service -- not directly to those who serve, but to their family members. The new provisions allow family members of Guard and Reserve members who are called to active duty to use FMLA leave to handle "qualifying exigencies," including arranging child care, helping the military member with legal matters such as making a will, or attending counseling sessions. The FMLA also now allows family members to take up to 26 weeks of leave to care for a family member who is seriously injured or becomes seriously ill while on active military duty. (These family military leave provisions are summarized here.) As more troops are deployed, we'll see how these new rights are interpreted and enforced by the courts.

Concerned about employee use of instant messaging and email? So is President Obama. In fact, the White House is so concerned -- about security risks and record-keeping requirements, among other things -- that it has apparently banned instant messaging by staff. The Washington Post reports that Facebook is also off-limits, as are logins to outside email accounts. 

Not an easy transition for the team that used Web 2.0 (and the Internet in general) to such great effect during the campaign. On the other hand, e-security is a very real concern for many businesses -- not just because of viruses, hackers, and possible disclosure of confidential information, but also because all of these electronic communication tools create records that may have to be saved or even produced in a lawsuit. Or, in the case of the White House, preserved for posterity.

For more information on technology at work, check out my new book, Smart Policies for Workplace Technologies.

The U.S. Supreme Court has denied a request by global shipping giant FedEx to review a $100,000 punitive damages award against it for failing to provide a reasonable accommodation to a deaf package handler. Ronald Lockhart worked for FedEx at the company's Baltimore Ramp at the Baltimore-Washington International Airport. Lockhart repeatedly asked his supervisor for a sign language interpreter or written notes from daily, weekly, and monthly meetings and training sessions. Despite these repeated requests, for the first two years of his employment FedEx made no attempts to accommodate Lockhart. After Lockhart complained to the EEOC, FedEx did provide some accommodations, but sporadically. (For instance, a translator was present at some meetings but not others.)

In contesting the jury's finding of a punitive damages award, FedEx claimed that its adoption of an ADA compliance policy, as well as its internal grievance policy for handling employee complaints, established it had acted in good faith to comply with the ADA. But the court recognized, "an employer maintaining such a compliance policy must also take affirmative steps to ensure its implementation." Equal Employment Opportunity Commission v. Federal Express, 513 F.3d 360, 374 (4^th Cir. 2008) (PDF file). There was evidence to support the jury's finding that FedEx had failed in this regard, including evidence that at least 3 higher-ups, in addition to Lockhart's supervisor, knew of his request for accommodation.

The Supreme Court's decision not to hear the case means employers who fail to provide reasonable accommodations when requested may be subject to punitive damage awards. The existence of a policy, on its own, won't be adequate evidence of an employer's good faith. Policies must be implemented if they are to offer protection.