Ohio Employer's Law Blog | Daily Updates | 01CDid the 7th Circuit finally kill McDonnell Douglas?>01D plus more

Did the 7th Circuit finally kill McDonnell Douglas?

If you are an employment lawyer, the words “McDonnell Douglas” will bring a sentimental tear to your eye.

For the unfamiliar, the McDonnell Douglas is an evidentiary framework used in discrimination cases, which lack direct evidence of discrimination, to determine whether an employee’s claim should survive summary judgment and proceed to trial. It first asks whether the plaintiff can establish a prima facie case of discrimination—(i) s/he belongs to a protected class; (ii) s/he was qualified for the position; (iii) though qualified, s/he suffered some adverse action; and (iv) the employer treated similarly situated people outside of his/her protected class differently. If the plaintiff satisfies this minimal showing, the burden shifts to the employer to articulate a legitimate non-discriminatory reason for the adverse action. Once the employer makes this articulation, the burden shifts again, back to the plaintiff to show that the employer’s reason is a pretext for discrimination.

It has existed for the past 43 years, until (maybe) last week.

In Ortiz v. Werner Enterprises [pdf], with six sentences the 7th Circuit Court of Appeals may have killed McDonnell Douglas and the 43 years of employment-law jurisprudence that followed.
The burden-shifting framework created by McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), sometimes is referred to as an “indirect” means of proving employment discrimination. Today’s decision does not concern McDonnell Douglas or any other burden-shifting framework, no matter what it is called as a shorthand. We are instead concerned about the proposition that evidence must be sorted into different piles, labeled “direct” and “indirect,” that are evaluated differently. Instead, all evidence belongs in a single pile and must be evaluated as a whole. That conclusion is consistent with McDonnell Douglas and its successors.  
With the rat’s nest of surplus “tests” removed from the law of the circuit, we can turn back to Ortiz’s claim and his supporting evidence. Stripped of the layers of tests, our analysis is straightforward.
Thereafter, the Court, in short order, determined that a jury, and not a judge, should decide the fact issue of whether Ortiz’s ethnicity (Hispanic) unlawfully motivated his manager (Lass) and assistant manager (Krikava) to assign him unprofitable loads:

That legal standard … is simply whether the evidence would permit a reasonable factfinder to conclude that the plaintiff’s race, ethnicity, sex, religion, or other proscribed factor caused the discharge or other adverse employment action. …  Relevant evidence must be considered and irrelevant evidence disregarded, but no evidence should be treated differently from other evidence because it can be labeled “direct” or “indirect.” … 
A reasonable juror could infer that Lass and Krikava didn’t much like Hispanics (or Jews, though Ortiz is not Jewish) and tried to pin heavy losses on Ortiz to force him out the door. A juror also might infer that, because of Ortiz’s ethnicity, Werner’s managers fired him for using techniques that were tolerated when practiced by other brokers. In the end a jury might not credit Ortiz’s evidence and could accept Werner’s explanations. But given the conflict on material issues, a trial is necessary.
No prima facie case, no legitimate non-discriminatory reason, and no pretext. Just a common-sense discussion of whether a reasonable juror could conclude that some protected class motivated the decision, or whether one could only conclude that the employer made the decision for legitimate reasons regardless of any protected classes.

Now let’s sit back and see if other circuits follow suit, or if the Supreme Court needs to step in an clarify whether McDonnell Douglas survives.


Federal court's rejection of LGBT discrimination claim on religious grounds has scary implications

Last week, a Michigan federal judge rejected the EEOC’s claim that Title VII covers transgender status or gender identity as protected classes.

In EEOC v. R.G. & G.R. Harris Funeral Homes (E.D. Mich. 8/18/16) [pdf], the agency pursued a sex-discrimination claim on behalf of the Funeral Home’s former funeral director, Stephens, who is transgender and transitioning from male to female. The EEOC claimed that the Funeral Home “fired Stephens because Stephens is transgender, because of Stephens’s transition from male to female, and/or because Stephens did not conform to [the Funeral Home’s] sex- or gender-based preferences, expectations, or stereotypes.”

The court rejected that claim on several grounds, including the Funeral Homes’s religious beliefs as protected by the Religious Freedom Restoration Act. This basis for the holding greatly troubles me.

The Religious Freedom Restoration Act prohibits the federal government from taking any action that substantially burdens the exercise of religion unless it is the least restrictive means possible. In Burwell v. Hobby Lobby Stores, the U.S. Supreme Court held that closely held corporation is a “person” that can hold a religious “belief” for purposes of the Religious Freedom Restoration Act.

In dissenting in Hobby Lobby, Justice Ginsberg argued that the Hobby Lobby majority, which permitted a company to opt out of the Affordable Care Act’s contraceptive mandate on religious grounds, was a dangerous precedent because it would enable any company to opt out of any non-tax law on the basis of any sincerely held religious belief. By permitting the Funeral Home to opt out of Title VII, this is exactly what the federal court did in this case.
[Thomas] Rost [the owner and operator of the Funeral Home] believes “that the Bible teaches that God creates people male or female.” He believes that “the Bible teaches that a person’s sex is an immutable God-given gift and that people should not deny or attempt to change their sex.” Rost believes that he “would be violating God’s commands” if he were to permit one of the Funeral Home’s funeral directors “to deny their sex while acting as a representative of [the Funeral Home]. This would violate God’s commands because, among other reasons, [Rost] would be directly involved in supporting the idea that sex is a changeable social construct rather than an immutable God-given gift.” Rost believes that “the Bible teaches that it is wrong for a biological male to deny his sex by dressing as a woman.” … 
Rost has a sincere religious belief that it would be violating God’s commands if he were to permit an employee who was born a biological male to dress in a traditionally female skirt-suit at one of his funeral homes because doing so would support the idea that sex is a changeable social construct rather than an immutable God-given gift. Rost objects on religious grounds to: 1) being compelled to provide a skirt to an employee who was born a biological male; and 2) being compelled to allow an employee who was born a biological male to wear a skirt while working as a funeral director for his business. To enforce Title VII (and the sex stereotyping body of case law that has developed under it) by requiring the Funeral Home to provide a skirt to and/or allow an employee born a biological male to wear a skirt at work would impose a substantial burden on the ability of Rost to conduct his business in accordance with his sincerely-held religious beliefs. 
No matter where you stand on LGBT issues, we should all be troubled by a decision that permits an employer to opt out of an employment law because of a religious belief.

What if a company has a sincerely held religious belief that it is okay to discriminate based on race? Or, how about a company, that, because of its religious beliefs, segregates its men and women? Or believes that women should be paid less than their male equivalents? Or doesn’t think women should work at all? Or sincerely believes that God, and not OSHA, cares for the safety of its employees, and that if an employee loses a limb it was God’s will? Or doesn’t believe in overtime pay?

You get my point.

Religious freedom as an opt out from employment laws is a dangerous construct. It’s easy to look at this issue through the lens of a political hot potato such as LGBT rights, the opponents of which often wrap themselves in the cloak of religion. The rationale of this case, however, does not limit itself to LGBT rights, no matter what the court might say to the contrary. Our constitution guarantees freedom of religion. We irreparably damage this important principle when we permit a private business, under the guise of religious freedom, to opt out, without penalty, from employment laws with which it disagrees or finds offensive.


WIRTW #426 (the “back to school” edition)

Here’s what I read this week:

Social Media & Tech
HR & Employee Relations
Wage & Hour
Labor Relations
OSHA & Safety
Until next week…


Hard to believe that overt pregnancy discrimination still exists … yet it does

Pregnancy discrimination has been unlawful under federal law since 1978. You’d think by now employers would have learned their lesson—that women should not have to choose between being pregnant and being employed. Yet, this recent story from the Washington Business Journal suggests otherwise.
A former employee of a D.C. Chipotle Mexican Grill who claimed she was fired because she became pregnant has won her discrimination case against the Mexican restaurant chain. 
The jury in the case, which filed in the U.S. District Court for the District of Columbia in 2014, awarded Doris Garcia Hernandez $550,000 in compensatory and punitive damages after determining that her former manager did indeed terminate her due to her pregnancy.… 
“Upon learning of her pregnancy, David told Ms. Garcia that she had to announce to every employee in the store when she was going to the bathroom and that David would have to approve her bathroom breaks so that he could cover her work position for her,” the original suit stated. “David did not impose these requirements on non-pregnant employees.” 
After the manager ignored Garcia’s repeated requests to leave work early for a pre-natal doctor’s appointment, she left for the appointment anyway. The next day, the manager fired her in front of other employees in the main area of the restaurant, according to the suit.
This should not be a complex legal issue. It shouldn’t even be a complex moral issue. Yet, there are still bosses that become outraged when a pregnant employee wants to keep working. There are more complex issues that arise with pregnant workers—pregnancy-related disabilities, in vitro fertilization and infertility, same-sex couples, to name a few. I should be stunned when employers muff the easy ones (but I’m not).

So, employers, heed the EEOC’s words on this issue, or ignore them at your peril:
Employers can also violate Title VII by making assumptions about pregnancy, such as assumptions about the commitment of pregnant workers or their ability to perform certain physical tasks. As the Supreme Court has noted, “[W]omen as capable of doing their jobs as their male counterparts may not be forced to choose between having a child and having a job.” Title VII’s prohibition against sex discrimination includes a prohibition against employment decisions based on pregnancy, even where an employer does not discriminate against women generally. As with other sex-based stereotypes, 
Title VII prohibits an employer from basing an adverse employment decision on stereotypical assumptions about the effect of pregnancy on an employee’s job performance, regardless of whether the employer is acting out of hostility or a belief that it is acting in the employee’s best interest.
And, because I know that employers often don’t do the right thing, I (sadly) know that this issue is one that we will be revisiting again, sooner rather than later.


DOL wage/hour agreement with Subway raises legitimate joint-employer concerns

The Department of Labor recently unveiled an agreement with Subway through which the fast-food giant has agreed to assist its franchisees in their wage-and-hour compliance.

the agreement builds upon the division’s ongoing work to provide technical assistance and training to Subway’s franchisees. It also provides an avenue for information-sharing where we will provide data about our concluded investigations with Subway, and they will share their own data with us, generating creative problem solving and sparking new ideas to promote compliance. When circumstances warrant, the franchisor will remind franchisees of the Wage and Hour Division’s authority to investigate their establishments and to examine records. It also specifies that Subway may exercise its business judgment in dealing with a franchisee’s status within the brand, based upon any history of Fair Labor Standards Act violations.
Sounds great, right? The DOL calls this a “recipe for success” — the DOL boosts franchisees’ compliance with labor laws and Subway protects the integrity of its brand identity. Yet, this recipe is certain to leave a bad taste in employers’ mouths.

Only a year ago, the NLRB, in Browing-Ferris, greatly expanded the definition of “joint employer” under the National Labor Relations Act. Gone is the NLRB’s decades-old test, by which must exercise actual control over the employees of another to be deemed a joint employer, replaced by a liberalized standard that allows for indirect or potential control over the terms and conditions of the employment of another’s employees.

Does not technical assistance, training, and wage/hour compliance monitoring of a franchisees employees by a franchisor qualify as sufficient indirect or potential control (if not direct control itself)?

Equally troubling, as the International Franchise Association points out, is the fact that the agreement between Subway and the DOL contains no assurances that the government will not use Subway’s wage/hour monitoring to establish a joint-employer relationship with its franchisees.
Legitimate concerns now exist as to which franchisor actions cross the line and could serve as evidence of a joint employment relationship in future litigation or a government enforcement action. Without assurances that their compliance efforts will not be used against them by another government agency, or plaintiff attorneys, franchisors are caught in an inevitable catch-22.
I try very hard not to be a conspiracy theorist. Yet, if it looks like a set-up, and smells like a set-up, then, well, you get the rest. Did the DOL reach its Subway agreement as a means to help the NLRB back-door its liberalized joint-employer standard? Quite possibly. After all, two arms of the DOL, OSHA and the Wage and Hour Division are looking at implementing the same joint-employer rules as the NLRB. How much easier does this all become for the feds if employers unwittingly agree?

Botton line? When the government offers to help your business with its compliance, proceed with extreme caution. There is no such thing as a free sub.

[Hat tip: Employment Law 360]


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