Second Circuit: Application of Neutral Policy Does Not Interfere with FMLA Rights

As recently reaffirmed by the U.S. Court of Appeals for the Second Circuit, neutral application of a policy to prorate incentive compensation contributions during leaves of absence does not unlawfully interfere with an employee’s rights under the Family and Medical Leave Act (FMLA).  In Clemens v. Moody’s Analytics, Inc., Plaintiff contended that he was denied benefits because his bonus was already “self-prorating” due to a reduced work period that naturally yielded a lesser bonus amount. In effect, he claimed, additional prorating was a doubled-reduction. Since the undisputed evidence showed that the employer’s prorating policy was neutrally applied based on the length of the employee’s leave (regardless of the reason for leave), there was no discriminatory interference with FMLA rights.

This decision serves as an important reminder that employers must review seemingly neutral policies (such as, for example, attendance or bonus policies) to consider the impact of those policies on employees on FMLA leave.

2019 EPLI Trends Report Published

Workplace law changes constantly. Employers and EPL carriers need to keep up with expanding risks, changing legal obligations, reason-defying jury verdicts, the #MeToo movement, and a record number of threatened and asserted claims associated with these changes. Our 2019 EPLI Trends Report gives an overview of the related risks and exposures employers and, by extension, carriers face in 2019.  Topics covered include:  Pay Equity Lawsuits, Medical Marijuana, Website Accessibility Lawsuits, Whistleblower Claims, Class Action Developments, Privacy and Data Breach Issues, and more.  See the full report by clicking here.

Hospital Privileges Do Not Confer Employment Status For Purposes of Title VII Liability, Seventh Circuit Holds

Having the power to grant, deny, or revoke hospital privileges does not give rise to liability under Title VII of the Civil Rights Act of 1964, according to a recent decision by the Court of Appeals for the Seventh Circuit. Yelena Levitin, M.D. v. Northwest Community Hospital.

For almost thirteen years, Dr. Yelena Levitin had performed surgeries at Northwest Community Hospital (the “Hospital”) as an attending physician. She had been granted privileges by the Hospital to send patients there for treatment and perform surgeries on her own patients there. The Hospital did not pay Dr. Levitin, she had her own medical practice, billed her patients directly, and filed taxes as a self-employed physician. She complained to Hospital leadership that a male surgeon had been harassing her. The Hospital reprimanded that physician and the alleged harassment ceased. Thereafter, other physicians filed complaints against Dr. Levitin related to her medical judgment. After further review of her practices, she was referred to the Medical Executive Committee, which voted to terminate her practice privileges.

Dr. Levitin filed suit, claiming, among other violations, that she suffered discrimination and retaliation under Title VII. The District Court granted the Hospital’s motion for summary judgment, determining that “the undisputed evidence showed that Levitin was not a Northwest employee, which put her discrimination claim outside of Title VII’s scope.” On appeal, the Seventh Circuit agreed.

In determining whether an individual is an employee for the purposes of Title VII, courts look to the economic realities of the circumstances. The Seventh Circuit acknowledged that there could be circumstances where an indirect employer-employee relationship is formed when a Hospital holds so much control over a physician’s privileges, such that it impacts the physician’s treatment decisions. The employer’s right to control is key to such an analysis. The facts in this case did not support such a conclusion. Notably, Dr. Levitin had complete independence: she set her own hours, could use her own staff, and could perform surgeries at and direct patients to other hospitals. As such, Dr. Levitin was deemed not to be an employee of the Hospital.

Older Employee Let Go in Reduction in Force Can Proceed to Trial on ADEA Claim

An employer’s retention of a younger, less-qualified employee instead of the older, more experienced employee, who was terminated during the Company’s reduction in force, can give rise to liability under the Age Discrimination in Employment Act (“ADEA”), according to a recent decision by the United States District Court for the Southern District of Texas. Harrison v. Chipolbrok America, Inc.

After a downturn in business, the Company conducted a reduction in force (“RIF”) terminating the 64-year-old Plaintiff, while retaining a 27-year-old employee. Plaintiff filed suit under the ADEA. The Company moved to have the case dismissed before trial, claiming that the Plaintiff was terminated due to the reduction in force and that Plaintiff was not qualified for the shipping associate position. The District Count denied defendants’ motion, stating the Plaintiff produced enough evidence to merit sending the age discrimination claim to trial. The Plaintiff presented evidence showing that she was qualified for the position including that Plaintiff’s manager wanted to keep Plaintiff on as a shipping associate and that Plaintiff actually trained the 27-year-old employee who was given the job over the Plaintiff. Additionally, there was testimony that the Company President allegedly stated that they did not want to keep Plaintiff on after the reduction in force because the 64-year-old employee was too old, too sick, and was costing the Company too much in medical expenses.

Before conducting a RIF, the company should carefully review its selection criteria and be sure it has support for its selection decisions. The mere statement that an employee was laid off with others as part of a RIF does not necessarily provide a complete defense.

Employee’s Receipt of Social Security Benefits May Prevent a Subsequent Claim for Disability Discrimination under the ADA

An employee who applies for and receives Social Security disability benefits may be judicially estopped from bringing a disability discrimination claim under the Americans with Disabilities Act (the “ADA”) according to a recent Louisiana District Court case. Tanner v. BD LaPlace, LLC.

Paul Tanner was separated from his employment with BD LaPlace LLC (“BD”) for job abandonment in March 2016 after he refused to submit to a mandatory fitness for duty evaluation (“FDDE”). Tanner was employed with BD as a crane operator. In 2016, BD received complaints of Tanner’s erratic workplace behavior. After investigation, BD required Tanner to undergo a mandatory FFDE. Tanner refused to comply with the testing. Accordingly, BD determined that Tanner had abandoned his position.

Tanner filed a charge for disability discrimination with the Equal Employment Opportunity Commission (“EEOC”) in September 2016. Seven months later, he applied for and received Social Security benefits in which he provided sworn testimony to the Social Security Administration (“SSA”) stating he became disabled on March 1, 2016. The SSA found that Tanner was, in fact, disabled, and backdated his disability to February 10, 2016. Tanner then filed suit alleging discrimination under the ADA.

The Court held that Tanner was precluded from bringing an ADA claim because of his sworn testimony provided to the SSA that he was “totally disabled” as of February 10, 2016. Relying on the Supreme Court’s decision in Cleveland v. Policy Mgt. Sys. Corp., 526 US 795, 806 (1999), the court here determined that it was Tanner’s responsibility to explain the contradiction, which he failed to do.

Employers should always request and review SSA records from a plaintiff. If a plaintiff has received Social Security benefits, an employer may use the plaintiff’s own sworn testimony provided to the SSA to defeat a disability discrimination claim.

Workplace Gossip May Lead to Title VII Liability, Fourth Circuit Holds

An employer’s failure to stop a false rumor that a female employee slept with her male boss in order to obtain a promotion can give rise to liability under Title VII of the Civil Rights Act of 1964, according to a recent decision by the Court of Appeals for the Fourth Circuit. Parker v. Reema Consulting Services, Inc.

Evangeline Parker was fired after complaining that male employees at Reema Consulting’s Virginia-based warehouse spread a false rumor that she was promoted because of a sexual relationship with a high-ranking male manager.  The facility’s highest-ranking manager allegedly not only knew of the gossip, but participated in spreading the rumor by discussing it at a group meeting and by blaming Parker for “bringing the rumor into the workplace.”

The District Court initially granted the employer’s motion to dismiss, ruling that although the workplace gossip was “truly offensive,” the rumor’s circulation was not based upon her gender and thus not unlawful under Title VII.  The Fourth Circuit disagreed and reversed, holding that because Parker “plausibly involved a deep rooted perception . . . that generally women, not men, use sex to achieve success” she adequately pleaded gender-based discrimination.  The Court also held that the conduct, as alleged, was sufficiently severe pervasive, as it persisted continuously for approximately two months.

Employers should be aware of their obligations to address potentially unlawful workplace rumors, and should consider training managers and human resources on how to take appropriate steps to stop such rumors without infringing on employees’ rights to discuss the terms and conditions of their employment.  For a more complete discussion of this case, please see our publication by clicking here.

Court of Appeals Rules Landlords Can Be Liable for Tenants’ Discriminatory Conduct

Just when landlords and their insurers thought that their obligations couldn’t get broader, the Second Circuit Court of Appeals ruled the federal Fair Housing Act’s anti-discrimination requirement extends to every part of the housing relationship, including discrimination by another tenant (not by the landlord) that occurs after the sale or rental transaction is completed. Francis v. Kings Park Manor, Inc., 15-cv-1823 (2d Cir. Mar. 4, 2019).

Plaintiff (an African-American male) was subjected to a hostile environment in the form of having racial and religious slurs directed toward him, photographing his apartment, and threatening to kill him. He reported the threatening and harassing conduct to the police, which eventually arrested the offending neighbor (who pleaded guilty to harassment). Because he had complained regularly to the landlord, who took no action, Plaintiff filed a lawsuit. The lower court dismissed the action, finding that the landlord had no duty to intervene in a neighbor-to-neighbor dispute. However, the Second Circuit reversed, holding the landlord liable for failing to address repeated reports of tenant-on-tenant harassment. The Court compared a landlord’s ability to stop tenant-on-tenant harassment to that of an employer taking prompt remedial action to stop employee-on-employee racial harassment. In so ruling, the Court ignored the fact that employment is presumptively terminable at will, while tenants have written leases assuring them of certain property rights.

The takeaway is clear— Landlords cannot ignore complaints of neighbor harassment or discrimination and should preserve the right to address in rental agreements. Also, while the offending tenant might be liable for its misconduct, the likelihood of collecting upon a successful cross-claim depends on the offending neighbor’s assets, a questionable proposition.

Federal Judge Reinstates Use of Revised EEO-1 Form, Effective Immediately

A U.S. District Court has immediately restored the prior directives of the Equal Employment Opportunity Commission and Office of Management and Budget requiring use of a revised EEO-1 form where employers with at least 100 employees have to report detailed information on their employees’ wages and hours, broken down by gender, race, and ethnicity.  For further information, read the full post on our Pay Equity Advisor Blog by clicking here.

Seventh Circuit Affirms Summary Judgment for Employer That Terminated Disabled Employee for Misconduct

The Seventh Circuit Court of Appeals recently upheld dismissal of failure to accommodate and disability discrimination claims where, for several years, the employer provided accommodations relating to plaintiff’s mental health (including directing co-workers not to startle plaintiff). Scheidler v. State of Indiana et al. Despite that admonition, a supervisor reached toward her with a choking motion and said, “I could just strangle you” resulting in a heated argument. When investigating the incident, the employer learned that months earlier, the plaintiff stated “It’s who you know and who you blow,” demeaning a colleague’s promotion prospects. After the investigation, the employer issued a written disciplinary notice to the supervisor and terminated the plaintiff for her role in the argument and her lewd comment.

The Seventh Circuit found, in that while the argument between the supervisor and the plaintiff could be a failure to accommodate, it was an “isolated, one-off event.” The plaintiff did not raise any other failure to accommodate issues and could not show that the overall interactive process had broken down or that other accommodations, such as time off, were not provided. In contrast, plaintiff’s involvement in the argument, coupled with her crude comment, gave the employer a basis for termination. Perhaps most significantly, the Seventh Circuit emphasized it was not holding that a single event could never support a claim for failure to accommodate.