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.

Civil Rights Act of 2009 (or 2010), here we come. This is not the first controversial disparate impact case the Supreme Court has ever decided. Although the majority reviewed the history of disparate impact as a legal theory, it omitted the Wards Cove case, in which the Court made it much more difficult for employees to win a disparate impact case. Congress explicitly overturned the Wards Cove case (along with a few others) in the Civil Rights Act of 1991. The Ricci case, along with a couple of others issued this term (Hulteen and Gross, for example), might spur this session of Congress to similar action.

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.  

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.

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.

The Equal Employment Opportunity Commission (EEOC) recently issued a new section of its Compliance Manual on religious discrimination, along with a fact sheet of questions and answers and a best practices guide. These documents were issued partly in response to a rise in charges of religious discrimination, which have doubled in the last 15 years (although they still make up a small fraction of the total charges the EEOC receives -- 3.5%, according to the agency).

Religion is unique among the characteristics protected from discrimination. Religion isn't really a characteristic, like race or gender; it's a belief system. And unlike other protected traits, which are sometimes protected precisely because they are "immutable," religious belief is deeply personal and can change over time. A person might become more religious, convert from one religion to another, or abandon faith entirely. A person might strongly feel him- or herself to be part of a religion, yet not share all of its beliefs or follow all of its teachings. Also, unlike other protected traits, religion sometimes requires particular behavior while adherents are at work, such as prayer; observing certain holidays; wearing specified items, types of clothing, or hair styles; or professing one's faith to others.

All this adds up to potential workplace conflict, especially when you consider that atheism is also considered a "religion" for purposes of anti-discrimination law. What if an employee's religious beliefs require him or her to "spread the good news" to customers and coworkers -- who complain about it? What if an employee's religious garb creates a potential safety hazard or simply violates the company's uniform rule? What if an employee requests an accommodation for a claimed religious belief that you've never heard of, refuses to provide a Social Security number because it constitutes "the mark of the beast," or asks to be excused from a management training course featuring a New Age speaker?

The EEOC's Manual attempts to clarify some of these issues. Among other things, the new Manual provides guidance on:

What constitutes a religious belief. Once an employee goes beyond recognized religious affiliations, it can be hard for an employer to determine whether the employee's belief is actually religious. Vegetarianism, particular styles of dress or hair length, and views on appropriate gender roles, for example, could each be part of a system of religious practices or could simply be a matter of personal opinion or preference. As the Manual points out, personal beliefs are not protected by Title VII; that privilege is reserved for religious beliefs, defined as those that are sincere, meaningful, occupy a place for the believer "parallel to that filled by...God," and concern "'ultimate ideas' about 'life, purpose, and death.'"

Discrimination based on third party bias. The Manual makes clear that employment decisions based on customer preference or prejudice -- for example, against employees who are perceived as Muslim -- are discriminatory. Oddly, the Manual also says that it would be okay for employers to require Muslim applicants to undergo more extensive security or background checks if required by federal law or Executive Order, but then goes on to say that no such law or Order exists, as far as it knows.

Reasonable accommodation and undue hardship. Employers are legally required to accommodate an employee's religious belief, practice, or expression. The Manual gives extensive guidance on accommodations that might be reasonable for an employee who requests a scheduling change (to observe religious rituals or a Sabbath), an exception from usual dress or grooming requirements, or breaks at work to pray. The Manual indicates that employers would be well-advised to follow the "interactive process" required by the ADA in working with employees to come up with a suitable accommodation. Although the Manual notes that any expense beyond administrative costs is considered an undue hardship under Title VII, it also states that an employer might be expected to pay premium wages (for example, overtime pay to another employee) as a temporary accommodation for an employee who needs time off for religious reasons.

Religious expression. The Manual cites a survey indicating that 19% of employees proselytize to coworkers. It also discusses other forms of religious expression in the workplace, from an employee who wears a button with an anti-abortion message and graphic photograph of a fetus or a patch saying "Jesus is Lord," to employees who wish to greet customers with "Have a Blessed Day," "Praise the Lord," or "in the name of Jesus of Nazareth."

The Manual doesn't do much to resolve the current legal bind of employers here: These are considered forms of religious expression entitled to accommodation. On the other hand, other employees may find these statements harassing -- and the employer itself might legitimately feel that such statements give the public the wrong idea about the company's own values and mission. There are no bright lines: Unlike racist or sexist comments, which an employer can and should stop whether or not they've reached the level of legal harassment, religious comments are not considered legally inappropriate. In fact, they are legally protected to some extent, and an employer who prohibits them absent complaints or other evidence of trouble could face a successful legal challenge.

With gas prices hovering around $4 per gallon, a survey by placement firm Challenger, Gray & Christmas reveals that 57% of polled employers are offering alternatives to help employees cope, according to CNN. Strategies include a compressed work week -- four 10-hour days (23%) -- employee carpools (20%), subsidizing the cost of public transportation (18%), and allowing employees to telecommute at least one day a week (14%).

Personally, I'm surprised telecommuting is so far down the list. All the other options are good ones, but telecommuting has some distinct advantages for employers as well as employees. (Full disclosure: I'm writing this from home, as a telecommuting employee.) Here are just a few of the benefits:

• Recruiting and retaining the best employees. According to the survey, 34% of employers have had a qualified candidate turn down a job because of a long commute, while 40% of jobs could be done telecommuting. Allowing employees to telecommute is an attractive job benefit that will help you attract the best candidates, even if far away. Another study shows telecommuting employees are more satisfied with their jobs, and less likely to leave.


• Decreased costs. Telecommuting may decrease your costs -- for example, if it allows employees to share work space and office equipment.


• Increased efficiency. Employees working at home are free of the distractions of a ringing phone, interruptions by co-workers, and the like. Particularly if working on focused projects, this allows employees to work more efficiently.


• Positive environmental impact. One 2005 study found Americans drive an average of 16 miles each way to work. In addition to reducing commuting times and costs, allowing telecommuting has a positive environmental impact as fewer workers drive to the office.

Alayna Schroeder

There are plenty of stories about employers firing employees for criticizing the workplace on their personal blogs. Then there are the tales of employee blogs getting companies into hot water by revealing confidential company information, or criticizing third parties. But a recent blog saga has an interesting twist: a Burger King executive used his middle school-aged daughter's online identity to attack a farmworkers' advocacy group that was trying to increase pay and improve conditions for tomato pickers. (In another dramatic turn, Burger King also allegedly hired a private investigator who tried to infiltrate the organization.) Though Burger King declined to name the employee, other reports claim that it was Vice President Steven Grover (who, according to a company telephone operator, no longer works at Burger King).

Dealing with employee blogs is a delicate thing. On the one hand, you don't want to overstep legal limits on regulating off-duty conduct; on the other, you do want to keep company secrets. Companies like Dell, IBM, and Cisco require their blogging employees to disclose their identities and company affiliation when blogging about company-related issues. And many companies require bloggers to make clear that their views are their own, not those of the company.

I doubt Burger King had such a policy, but in this case, you'd also doubt that the employee would have followed it anyway. After all, any company executive who will assume his pre-teen's identity (did he really expect to go undetected?) to make disparaging remarks has questionable business acumen. The law related to blogs may be complicated, but it's not that complicated.

Of course, that's my view, not necessarily that of my employer.

Alayna Schroeder

Today, the Familes and Work Institute released its "National Study of Employers," a survey of the programs, policies, and benefits U.S. employers provide to address work-life issues such as job flexibility, time off, and health and retirement benefits. One purpose of the study was to identify trends over the last ten years. (The Institute released a similar study in 1998, and another in 2005.)

Its findings? Things haven't changed much, overall. For most of the more than 80 policy options the study surveyed, roughly the same percentage of employers offer them today as did ten years ago. The biggest change is who pays -- the study shows that costs are shifting to employees for these benefits:

• Maternity disability leave. 16% of employers provide leave with full pay for the period of time when a female employee is unable to work due to pregnancy and childbirth, compared to 27% of employers ten years ago.


• Family health insurance benefits. Only 4% of employers pay the full cost of covering family members, compared to 13% ten years ago.


• Retirement benefits. Although most employers contribute to employee retirement plans, the number has declined from 91% to 81%. And far fewer employers offer defined benefit pension plans (which pay out a set monthly benefit upon retirement).

Some programs have become more popular in the last ten years. Employers are now much more likely to provide health insurance coverage for their employees' unmarried partners, for example. They are also more likely to offer employee assistance programs (EAPs), information about elder care resources and services, and flexible hours, allowing at least some employees to change their starting and quitting times.

One of the more interesting findings of the survey is that racial and ethnic diversity at the top predicts a more work-life friendly workplace. The survey looked at four categories of work-life benefits: flexibility, caregiving leaves, child and elder care assistance, and health and economic security (primarily medical, disability, and retirement benefits). In every category, companies with more racial and ethnic minorities in senior positions were more likely to offer benefits.

Lisa Guerin

I went to a great event last week called "Putting Transgender People to Work," cohosted by Out & Equal and the Transgender Economic Empowerment Initiative. The speakers made the business case for hiring and retaining transgender employees and offered strategies for making companies friendlier for transgender employees and customers. One of the featured speakers, Susan Friedman of Macy's West, talked about creating a nondiscrimination program, complete with policy language, training, and written guides for managers and employees, for Macy's and Bloomingdale's stores.

A big part of the business case is the tremendous untapped human resource of transgender employees -- employees whose identification or expression of their gender is different from the gender they were born into or the stereotypes associated with it. According to the "Good Jobs Now!" survey cited by the speakers, transgender people are disproportionately unemployed or underemployed, and more highly educated, than the general population of California. That's the carrot: The stick is that discrimination on the basis of gender identity -- which includes discrimination against transgender employees and applicants -- is illegal in a handful of states (including California) and a much larger number of cities and counties.

For information on making your company more welcoming to transgender employees and applicants, check out the extensive resources available at the Transgender Law Center's website. You'll find information on everything from revising your policies to include gender identity as a protected category to making bathrooms accessible to transgender employees, handling coworker concerns, and respecting transgender employees' privacy. TLC also does workplace trainings.

Lisa Guerin