On The Move – New Labor & Employment Law Update for the Transportation Sector

On The Move provides streamlined quarterly updates on legal developments in labor and employment in the ground transportation and logistics industries.  If you would like to learn more about any of the items reported, including copies of the court rulings, please let me know.

Click here to read the Fall 2016 edition of On The Move.

Union Whacked with $5.3 Million Verdict for Campaign Lies


Unions have certain free speech rights, just like workers and management.  But a case decided this month is a startling lesson that the limits of such free speech include false and malicious allegations designed to harm the targeted employer.

A Texas jury walloped the Service Employees International Union (SEIU) with a $5.3 million verdict for spreading false and harmful statements about the company, after the business refused to recognize the union without a secret ballot election.  Lawyers for the company said the SEIU used “an intimidating campaign of extortion to try to run the janitorial service out of business,” and targeted the company’s clients with “faked tales of labor complaints,” costing the company millions of dollars in business.  The law recognizes that type of conduct as defamation and tortious interference with contract.  And when that happens, the speaker may be liable for the damages caused.  We assume the SEIU will appeal the ruling.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Labor and Employment Lessons from the Clinton Campaign Trail

Although the Update rarely delves into politics, we practice “equal time” and fairness when we do. Last month, Donald Trump was on the hot seat so this month we bring you the Hillary Clinton edition.  

Hillary Clinton, Pretext, and “18 Million Cracks” 

Like her Republican rival, Democrat Hillary Clinton’s campaign for President provides healthy fodder for discussion of workplace legal issues.

The Scent of the Email Trail

Candidate Clinton (it seems sexist to call her “Secretary Clinton”) has been dogged by the drip-drip-drip leak of her emails, public and private, deleted and non-deleted, relating to her time as Secretary of State.  Her experience provides key reminders for employers and employees:

  • Emails are often the best source of the facts in a legal dispute – be careful what you write, and avoid mixing work and personal emails on one account.
  • Deleting emails rarely accomplishes much, other than to suggest that he who deletes has something to hide (see “Pretext and cover-up” below).  Assume that anything you delete – good or bad – can be recovered by forensic computer examiners.  Automated deletions of emails through a computerized system do not create these pretext concerns.
  • Honor the security and confidentiality requirements of your employer – failing to do so, as alleged with Clinton, suggests you are up to no good, or “extremely careless,” as the FBI put it.
  • If you store electronic data at home relating to work, understand that you could be ordered to produce the computer and data in any legal dispute relating to work.  Do you really want your private data disclosed to your adversary?
  • Destruction or disclosure of employer data may be criminal, in some circumstances.

Pretext and Cover-Up

Richard Nixon learned the hard way that sometimes the cover-up is worse than the alleged crime.  Clinton also is being attacked for not earlier disclosing her home server and the extent of her email deletions.  More recently, she has been criticized for reporting that her health was “fine,” when in fact she was suffering from pneumonia.

Lies and obfuscation to cover up bad facts (a.k.a. “pretext”) not only jeopardize a witness’s credibility, they also may be sufficient in an employment lawsuit to infer discrimination.  As the U.S. Supreme Court noted in Reeves v. Sanderson Plumbing Products, Inc., 530 U.S.133, 147 (2000):

In appropriate circumstances, the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose. Such an inference is consistent with the general principle of evidence law that the factfinder is entitled to consider a party’s dishonesty about a material fact as ‘affirmative evidence of guilt’ . . .”

So, a liar in an employment case can do much worse than be disbelieved – he or she can create liability for discrimination where it might not have existed otherwise.

Avoid trouble; tell the truth – or at least talk to your lawyer before talking about a subject that could land you in court.

Knocking Up Against That ‘Glass Ceiling’

Hillary Clinton’s most famous comment from her losing 2008 campaign probably was her concession that, “Although we weren’t able to shatter that highest, hardest glass ceiling this time, thanks to you, it’s got about 18 million cracks in it.”

The theory of a “glass ceiling,” above which women cannot rise at certain companies and institutions, first arose as social commentary in 1986 in the Wall Street Journal.  It remains an oft-cited metaphor today in employment law, although it is not recognized as a distinct legal cause of action apart from sex discrimination.  In August, the U.S. Court of Appeals for the Fourth Circuit ruled in favor of plaintiffs in a “glass ceiling” claim against a major international consulting firm, in Calobrisi v. Booz Allen Hamilton, Inc.  The Court of Appeals ruled that the trial judge should have examined evidence relating to seven other middle-aged women who claimed, like the plaintiff, that they suffered sex discrimination due to a virtual glass ceiling at the firm, directed by its “all-male Leadership Team.”  To determine whether such “me too” evidence was admissible, the trial court should have examined whether the other older women were similarly situated, including closeness in time, decision-makers, and other treatment, the appellate court held.

Similarly, in a case that strikes closer to home for lawyers, Karen Campbell filed a class action suit recently seeking $100 million in damages against the New York law firm of Chadbourne & Parke, claiming it is run by an “all-male dictatorship” and has “a culture of discrimination against female attorneys.”  Campbell’s lawyers alleged in her “glass ceiling” claim that even though she generated more than $5 million in business over two years, males who generated less were paid more.  The law firm has strongly contested the lawsuit as baseless and “riddled with falsehoods.”

Regardless of whether these plaintiffs “crack” the ceiling, employers should be concerned about any patterns of gender or racial discrepancy in their executive suites that could suggest to disgruntled women and minorities an invisible barrier to their promotion to the top.  A serious review or audit may be in order to avoid such lawsuits and erase any vestiges of the “good old boy” system.  However, be forewarned: electing a female President will not clear up the problem – just as electing President Obama did not herald the end of race discrimination.  Rather, such an election would simply shatter one barrier – while perhaps shining light on a million others.

She’s too old to be President, right?

Finally, the fact that more questions have been raised about Clinton’s age, 68, than that of Donald Trump, 70, reminds us that age bias and age-plus-sex bias are alive and well in America.

While anything goes in a presidential race, employers and managers are prohibited from discriminating against employees and candidates for employment based on age – even if they are over 65 years old.  So, the next time you hear someone say that Hillary is “too old” or “too frail,” or has “slowed down” or “just doesn’t have it anymore,” remember that such thinking may be playing out at work – merely because the employee is “up there” in age.  Rather than mindlessly doze into such stereotypes, managers and human resources professionals should guard against unconscious or societal age bias.  Make employment decisions based on verifiable and specific facts, not subjective, improvable characterizations.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

The Overtime Rule Clock is Ticking Down

As we previously reported, the newly released Final Rule updating overtime regulations under the Fair Labor Standards Act takes effect December 1, 2016.

Among other changes, these new regulations nearly double the minimum salary for “white collar” exempt executive, administrative and professional workers to $913 per week ($47,476 annually for a full-year worker).  Here are a few key points to keep in mind as your company prepares for the new rules to kick in:

  • Now is the time to reevaluate your overtime exposure. The pending application of the new overtime regulations should prompt each employer to reexamine whether it is properly applying the overtime laws – old and new.  If changes are needed, this is the time to make them, coordinating with the December 1 effective date of the Final Rule.
  • Advance preparation is essential to anticipate and make any adjustments to your workforce to limit the costs of complying with the law.  Taking action to reorganize the workforce, change employees from salary to hourly, limit overtime, and redefine jobs to meet the exemptions can all dramatically reduce overtime risk, cost, and exposure.
  • Job descriptions should be reviewed and revised to fit the job being performed and any exemption being claimed. Job descriptions are often important evidence that the Department of Labor and courts examine to determine whether an exemption applies.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

‘She’ Gets Another At-Bat in Discrimination Claim

Sometimes a manager’s prejudices come out in obvious ways – such as sexist or racist comments – and sometimes they are more subtle – such as pronouns.  Yes, pronouns (plus baseball bats).

The federal First Circuit Court of Appeals in Boston recently ruled that a manager’s repeated reference to a female subordinate in a condescending tone as only “she” could be enough to show sex bias.

In Burns v. Johnson, the appellate court reversed summary judgment for the employer, the Federal Air Marshals Service, after finding that the plaintiff – if believed – could prevail on her claims of sex discrimination and a hostile work environment.  Although the plaintiff had no evidence of the manager using “sexist or gender-based slurs,” the law does not require such blatant bias, the court noted.

Rather, the court opined, “more subtle cognitive phenomena” could “skew perceptions and judgments” and lead to discriminatory decisions.  While the use of the feminine pronoun, by itself, obviously does not establish bias, if the manager singles the employee out by failing to use the her name and referring to her only as “she” in a condescending tone, that could suggest sex bias, because a “speaker’s meaning may depend on various factors including context, inflection, tone of voice.”

Adding to the odd facts of the case, the manager – who had played baseball in college and apparently never let go of those glory days  – would hold a baseball bat in a “swinging position” when speaking with the plaintiff.  He often did the same with other employees, male and female, but the plaintiff said he did it differently with her and, in any event, she was intimidated.  Let’s hope he didn’t remind her of Robert De Niro’s motivational speech in The Untouchables.

In any event, her battle is far from over. She will still have to prove all the elements of her sex discrimination and hostile work environment claims, which could be difficult based upon the rather thin facts she pled.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Race Discrimination Against Corporations

Can a company have a racial identity and be the victim of race discrimination under the law? If so, will jurors protect a company from race discrimination in contracting, just as they would protect an employee from such prejudice at work?

Yes, yes, and yes, according to recent decisions in the federal district court in Philadelphia, where our client – a small, privately held business — prevailed on a race discrimination in contracting claim earlier this summer.  Under Section 1981, the first part of the Civil Rights Act of 1866, all “persons” have an equal right “to make and enforce contracts” without regard to race.  Courts across the nation, including the Eastern District of Pennsylvania, have ruled that this right protects corporations (Mitt Romney was right, “corporations are people”) from race discrimination in contracting, if they have a racial identity and were denied contract rights “because of race.”

In our case, Security and Data Technologies, Inc. v. The School District of Philadelphia, et al., a jury found that our client had indeed been denied a $7.5 million contract because of its racial identity, and awarded $2.34 million in lost profits damages.  The case was reported here.

The decision reminds us that race discrimination is not just something that we have to be concerned about in the employment context – it is also illegal in business deals with private and public entities.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Sexual Orientation Discrimination: Who Will Put on the Big Boy Pants?

For several years the U.S. Equal Employment Opportunity Commission (EEOC) has been advocating the position that discrimination based on sexual orientation amounts to unlawful sex discrimination.

Last year, for the first time, the EEOC actually ruled in a case, Baldwin v. Foxx, that discrimination based on sexual orientation is necessarily sex discrimination under Title VII.  The EEOC argued that sexual orientation discrimination necessarily involves sex discrimination because (1) it always involves consideration of sex, (2) it is associational discrimination because it discriminates based on the gender of who the employee dates or marries, and (3) it is a form of stereotyping based on gender norms, which the Supreme Court has ruled is unlawful sex discrimination.  Although each of the EEOC’s arguments has appeal, the decision has not been universally accepted for the simple reason that sexual orientation is distinct from gender.  For example, a manager who discriminates against both male and female homosexuals because of orientation would not seem to be engaging in discrimination based on gender, but on orientation only, so the argument goes.

Now comes the U.S. Court of Appeals of the Seventh Circuit in Hively v. Ivy Tech Community College, decided July 28, which rejected the EEOC position, but noted there is “writing on the wall” that sexual orientation discrimination in employment may not be legal for long, as it is widely regarded as unacceptable today.  The opinion is a tour de force, discussing not only the history and evolution, but also the inconsistencies in the law on this hot topic.

The Seventh Circuit opinion highlighted the tremendous progress in recent years in civil rights for the LGBT community, including the U.S. Supreme Court decision in 2015 legalizing gay marriage in all 50 states, and saw “an emerging consensus that sexual orientation discrimination in the workplace can no longer be tolerated.”  Nevertheless, the court held that it was bound by precedent in the Seventh Circuit – which matches the precedent in almost all other federal appellate courts – holding that Title VII does not protect against sexual orientation discrimination. As the court noted, Congress has rejected repeated efforts to amend the law to protect employees based on sexual orientation.

The Hively court also pointed out the absurdity of court decisions on the topic, especially with regard to sex stereotyping, leaving “a somewhat odd body of case law that protects a lesbian who faces discrimination because she fails to meet some superficial gender norms – wearing pants instead of dresses, having short hair, not wearing make-up – but not a lesbian who meets cosmetic gender norms, but violates the most essential of gender stereotypes by marrying another woman.”

In the meantime, regardless what appellate courts, Congress, and the President do, employees in about half of the country continue to be protected – at varying levels – by state laws against discrimination based on sexual orientation and gender identity.  At the federal level, the law protects only employees of federal contractors against such discrimination.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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