This week, three female associates at Morrison & Foerster (“MoFo”) filed a nine-count gender, pregnancy, and maternity (“sex-plus”) discrimination class and collective action against their employer in the Northern District of California. The putative class includes all female attorneys at MoFo and other national and California subclasses of female attorneys who have been or will be employed by MoFo and who have been or will be pregnant, have children, and/or take maternity leave.
On June 15, 2017, J.P. Morgan Chase employee Derek Rotondo filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging that the company’s parental leave policy discriminates against males by relying on a sex-based stereotype that mothers are the primary caretakers of children, thereby denying fathers paid parental leave on the same terms as mothers. The EEOC charge, filed on a class-wide basis, seeks relief on behalf of himself and all fathers who were or will be subject to J.P. Morgan’s parental leave policy.
On August 1, Massachusetts added significant teeth to the state’s current equal pay law. The new law, “An Act to Establish Pay Equity,” not only targets compensation decisions, it also affects hiring practices. As of July 1, 2018, when the new law takes effect, employers cannot ask an applicant to provide his or her prior salary history until after the candidate has successfully negotiated a job offer and compensation package. This measure is intended to stop the perpetuation of gender pay disparities from one employer to the next. In addition, employers cannot use an employee’s prior salary history as a legitimate basis to pay a man more than a woman for comparable work.
The definition of comparable work is broad: “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions: provided, however, that a job title or job description alone shall not determine comparability.”
Governor Chris Christie signed Assembly Bill 2647 (the “Gender Equity Notice and Posting Law,” N.J.S.A. 34:11-56.12) into law, effective November 21, 2012 requiring New Jersey employers with 50 or more employees to conspicuously post a notice, where it would be accessible to all workers in each of the employer’s workplaces, informing employees of their “right to be free of gender inequity or bias in pay, compensation, benefits, or other terms or conditions of employment” under the New Jersey Law Against Discrimination, other New Jersey State law, Title VII of the Civil Rights Act of 1964 and the federal Equal Pay Act of 1963. (http://www.njleg.state.nj.us/2012/Bills/PL12/57_.PDF)
Under the Gender Equity Notice and Posting Law, employers have 30 days from December 9, 2013, the date the New Jersey Division of Labor and Workforce Development (“NJDLWD”) issued the “notice” to comply. The gender equity notice is now available for download from the NJDLWD at: http://lwd.state.nj.us/labor/forms_pdfs/EmployerPosterPacket/genderequityposter.pdf
Here is what “covered” employers (those employers with 50 or more employees, whether they work inside or outside of New Jersey) must do:
- Beginning January 6, 2014, conspicuously post the gender equity notice where it is accessible to all employees in each of the employer’s workplaces. If the covered employer has an internet or intranet site for its employees’ exclusive use to which all employees have access, posting of the notice on such a site will satisfy the conspicuous posting requirement.
- By February 5, 2014, provide each employee hired on or before January 6, 2014 with a written copy of the gender equity notice.
- After January 6, 2014, provide each employee with a written copy of the gender equity notice at the time of the employee’s hiring.
- Beginning January 6, 2014, and on or before December 31 of each subsequent year, provide each employee a written copy of the gender equity notice.
- At any time, upon the first request of the worker, provide each employee a written copy of the gender equity notice.
Covered employers may distribute the gender equity notice as follows:
- By email;
- Via printed materials, including, but not limited to, a paycheck insert, brochure or similar informational packet provided to new hires, an attachment to an employee manual or policy book, or flyer distributed at an employee meeting; or
- By way of an internet or intranet site, so long as it is accessible by all employees, for employees’ exclusive use and the employer provides notice to workers of its posting.
Covered employers must ensure that the gender equity notice contains an acknowledgment, indicating that the worker has received the notification and has read and understands its terms. The acknowledgment must be signed by the employee, in writing or electronically verified form, and returned to the employer within 30 days of receipt. The notice must be posted in English, Spanish, and any other language the employer reasonably believes is the first language of a significant number of workers in the covered employer’s workforce, provided that the NJDLWD has issued a form notice in that language.
New Jersey employers (with 10 employees or more) are reminded of the similar, annual posting and distribution requirements of the New Jersey Conscientious Employee Protection Act (“CEPA”) and of the new posting requirement of the New Jersey SAFE Act, which provides unpaid leave for victims of domestic violence. As the end of 2013 rapidly approaches, New Jersey employers are encouraged to take time out to make sure that all postings are current for the new year, that all distribution requirements are or will be satisfied, and that handbooks are updated to reflect these new laws.
In University of Texas Southwestern Medical Center v. Nassar, decided June 24, 2013, the United States Supreme Court held that a plaintiff can no longer establish a retaliation claim under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”), merely by demonstrating that retaliation was a “motivating factor” in the employer’s decision to fire, demote or otherwise take adverse action. Instead, plaintiffs must demonstrate that retaliation was the “but for” reason for the employer’s adverse action. In other words, plaintiffs must show that the adverse employment action would not have happened absent the employer’s unlawful retaliatory motive. This holding makes it more difficult for plaintiffs to prevail on Title VII retaliation claims.
Defendant University of Texas Southwestern Medical Center (the “University”) and Parkland Memorial Hospital (the “Hospital”) entered into an “affiliation agreement” requiring all Hospital staff physicians to be employed by the University. Plaintiff Naiel Nassar, a medical doctor, worked as a faculty member for the University and a staff physician for the Hospital. Dr. Beth Levine was a supervisor. During his employment, Nassar complained to Levine’s supervisor, Dr. Gregory Fitz, that Levine discriminated against Nassar on the basis of his ethnic heritage and religion.
Nassar ultimately resigned from the University and, in a letter to Fitz and others, accused Levine of harassing him because he was Arab and Muslim. Although the Hospital had offered to continue employing him as a staff physician, it withdrew the offer when Fitz – unhappy about Nassar’s accusations against Levine – objected that employing a physician who was not employed by the University was inconsistent with the affiliation agreement.
Nassar filed a lawsuit in federal court in Texas asserting Title VII claims for race and religious discrimination, and retaliation. After Nassar received a jury verdict in his favor on both counts, the University appealed. With regard to the retaliation claim, the U.S. Court of Appeals for the Fifth Circuit affirmed. In reaching its decision, the Fifth Circuit held that Nassar had established that retaliation was a “motivating factor” in Fitz’s objection to the Hospital hiring Nassar.
In a 5-4 decision, the Supreme Court reversed, rejecting the “motivating factor” standard. According to the Court, “proof that the defendant’s conduct did in fact cause the plaintiff’s injury … is a standard requirement of any tort claim.” Referring to this concept as a “default” rule, the Court explained that the rule applies “absent an indication to the contrary” in a statute.
Against this backdrop, the Court observed that Title VII prohibits employers from discriminating on the basis of two different categories: (1) “personal characteristics,” which are race, color, religion, sex and national origin; and (2) “protected employee conduct,” which is opposing or complaining about workplace discrimination. Title VII addresses these two different categories in two separate statutory sections, 42 U.S.C. § 2000e-2 (personal characteristics) and 42 U.S.C. § 2000e-3(a) (protected employee conduct).
According to the Court, in the personal characteristics section of Title VII, Congress clearly indicated that the motivating factor standard applies. Indeed, the statute includes the phrase “motivating factor” and states that discrimination is prohibited “even though other factors also motivated the practice.” Thus, the Court explained, Congress plainly indicated its intent that the motivating factor analysis applies to claims under this section.
In contrast, in the protected employee conduct section of Title VII, Congress did not use this language. Instead, the section prohibits an employer from retaliating “because of” protected employee activity – language that the Court, when analyzing other statutes, has interpreted as meaning that the “but for” standard applies.
In reaching its decision, the Court declined to give deference to the guidance manual published by the Equal Employment Opportunity Commission, which reflected the agency’s view that the “lessened causation standard” applies to Title VII retaliation claims. According to the Court, the EEOC’s reasoning “lack[ed] … persuasive force” and was “circular.”
The Court concluded that a plaintiff asserting a claim for retaliation under Title VII must present “proof that the unlawful retaliation would not have occurred in the absence of the alleged wrongful action or actions of the employer.” The Court vacated the Fifth Circuit’s judgment and remanded the case for further proceedings.
For employers, the Nassar decision is good news. As the Court noted, “claims of retaliation are being made with ever-increasing frequency” and applying the “motivating factor” standard advocated by Nassar could have “contribute[d] to the filing of frivolous claims.” However, this decision only applies to retaliation claims under Title VII. The decision does not alter the standard of proof for retaliation claims under other statutes – particularly state statutes – and employers should continue to exercise caution when taking action against an employer who has engaged in protected activity.
In its 1998 opinions in Faragher v. Boca Raton and Burlington Industries v. Ellerth, the Supreme Court held that harassment by a supervisor can result in liability against an employer, but that an employer would only be liable for harassment by a non-supervisory employee if it knew or should have known of the harassment and was negligent in failing to correct it. It has remained unclear, however, exactly who is a supervisor for purposes of vicarious harassment liability under Title VII. The First, Seventh and Eighth Circuits have held that an individual is a supervisor for purposes of harassment liability only if he/she has been given the authority to take tangible employment actions – to hire, fire, demote, transfer or discipline – against the victim of harassment. The Second, Fourth and Ninth Circuits have adopted the definition set forth by the EEOC in its Enforcement Guidance where it defines supervisory status by the ability to exercise significant direction of an employee’s work activities irrespective of the power to take substantial or tangible employment actions. The Supreme Court’s opinion this week in Vance v. Ball State University resolves that split by making clear that Title VII imposes vicarious liability on the employer only for the harassment by a member of management who has been given the power by the employer to significantly impact the employment of a subordinate victim.
In Vance, Plaintiff Maetta Vance complained on a number of occasions to the University that she had been subjected to racial harassment by Saundra Davis, who she claimed was her supervisor, as well as by a number of co-workers and other supervisors. The University investigated each complaint and imposed discipline when it found the complaint had merit. Nevertheless, Vance filed charges with the EEOC and ultimately initiated a Title VII action for race harassment and hostile environment discrimination in the United States District Court for the Southern District of Indiana. The district court granted the employer’s motion for summary judgment based on its finding that the University was not strictly liable for the alleged harassment by Davis because Davis was not Vance’s supervisor, and that the University was not liable under a negligence theory because it acted promptly to investigate and resolve the complaints filed by Vance.
The Seventh Circuit Court of Appeals affirmed. The Appeals Court determined that summary judgment was warranted in part because Vance had failed to establish a basis to impose liability against the employer. In this respect, the court found that Davis was not a supervisor under Title VII because she did not have the power to take tangible employment actions, i.e., Davis had no authority to hire, fire, promote, demote or discipline Vance. The court rejected the argument by Vance that Davis was a supervisor merely because she told Vance what to do and refused to adopt the definition of supervisor advanced by the EEOC that it was sufficient under Title VII if the supervisor directed the day-to-day activities of an employee even without authority to take significant or tangible employment actions.
In a 5-4 decision written by Justice Samuel Alito, the Supreme Court affirmed. The Court resolved the split among the circuits by refusing to defer to the expertise of the EEOC, and by rejecting the Agency’s vague and “nebulous” definition of supervisor in favor of a bright line standard which could easily be applied by the parties and courts to establish the status of an alleged harasser. The majority determined that it was appropriate to focus on the framework established in Faragher and Ellerth – that employers will be vicariously and strictly liable for harassment by a supervisor which results in a tangible adverse action such as a significant change in the victim’s employment status – in order to understand and determine the proper definition of a supervisor in the context of a claim for harassment under Title VII. Applying the Faragher and Ellerth analysis, the Court found that the defining characteristic of a supervisor in such a case is the power to cause “direct economic harm” by virtue of “the authority to effect a tangible change in a victim’s terms and conditions of employment.” Accordingly, the Court held that to be a supervisor for purposes of imposing vicarious liability in a Title VII harassment case, a person must have the power to make a “significant change” in the working status of the alleged victim, such as the ability to hire, fire, promote, demote, discipline or impose “significantly different responsibilities” on the employee.
The dissent, written by Justice Ruth Bader Ginsburg, argued that the majority opinion ignores the workplace reality where the power to control work assignments – no less than the power to fire or discipline – is used as an intimidating factor to aid in the harassment of a subordinate. Justice Ginsburg would have deferred to the informed expertise of the EEOC, and suggested that the majority opinion will allow employers to escape liability for the harassment of their employees and undermine the effort “to stamp out discrimination in the workplace.”
The Vance opinion will not only have a significant impact on how harassment cases are approached in litigation, but will also promote the use of internal complaint procedures by forcing employees to report incidents of harassment by co-workers, and by encouraging employers to investigate and resolve such complaints in order to avoid liability in court. Not surprisingly, the opinion has been lauded by defense counsel for bringing clarity to a significant issue of importance and as a victory for employers. The General Counsel of the EEOC, however, has expressed his disappointment in the ruling and in the Court’s failure to defer to the Agency’s long standing interpretation of the law, and employee organizations have parroted the concern expressed in the dissenting opinion that the standard adopted by the Court will make it harder for victims to hold their employers accountable for harassment in the workplace. However, as noted by Justice Alito, there has been no indication from any of the 14 states which comprise the First, Seventh and Eighth Circuits – which have long applied the test adopted by the Court – to support that fear.