• Second Circuit: Inability to Sit for Long Periods Can Trigger ADA Coverage

    Why it matters: Can an employee’s inability to sit for a prolonged period of time constitute a disability under the Americans with Disabilities Act? According to a new decision from the Second U.S. Circuit Court of Appeals, the answer is yes. Clarifying prior case law in the circuit, the unanimous federal appellate panel held that no categorical rule exists regarding an employee’s inability to sit for a long period of time – instead, each case turns on the specific factual circumstances to determine whether a disability exists.

    Detailed Discussion
    Carmen Parada’s job at Banco Industrial de Venezuela was largely sedentary. As a senior letters of credit specialist, she organized credit letter applications and issued credit letters – all while seated.

    Six months into her job with the bank, she fell on a sidewalk and injured her back. She was diagnosed with lumbosacral and cervical sprains, and Parada’s doctors told her to avoid sitting for prolonged periods. After her requests for an ergonomic chair were denied, Parada took a leave of absence and then filed suit against the bank.

    A federal court judge granted summary judgment for the bank, ruling that Parada’s inability to sit for a long period was not a disability under the Americans with Disabilities Act (ADA).

    But the Second Circuit reversed, holding “that impairments that limit the ability to sit for long periods of time do not categorically fail to qualify as disabilities under the ADA.”

    The panel took pains to distinguish a 1998 decision, Colwell v. Suffolk County Police Department, where the court held a police officer’s claim of an inability to sit was too vague to survive.

    Although some district courts in the circuit interpreted the Colwell case as stating a per se rule that a plaintiff must be unable to sit at all to trigger ADA coverage, the panel explained the holding “is much narrower: vague statements about a plaintiff’s difficulties with ‘prolonged’ sitting, without more, will not suffice to support a finding of an ADA violation.”

    Instead, the court emphasized the need in every ADA case for a fact-specific inquiry. The Equal Employment Opportunity Commission, tasked with implementing regulations for the statute (and listing “sitting” as a major life activity, the court noted), explained that the determination of whether an impairment substantially limits a major life activity involves several factors.

    “If a plaintiff offers evidence that she cannot sit for a prolonged period of time, she may well be disabled under the ADA, depending on her specific factual circumstances,” the court said. “Of course, we recognize that the inability to sit for even an abbreviated period of time is more likely to be a substantial limitation of a major life activity than is the inability to sit for prolonged periods; few people are able to sit for hours on end without genuine discomfort.”

    The panel remanded the case to the district court for a multifactor inquiry to determine whether Parada’s impairment constituted a disability under the ADA.

    To read the opinion in Parada v. Banco Industrial de Venezuela, click here

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    Federal Court Tosses EEOC Suit Over Dreadlocks

    Why it matters: Rejecting the contention of the Equal Employment Opportunity Commission (EEOC) that an employer’s policy prohibiting dreadlocks violated Title VII, a federal district court judge in Alabama dismissed the agency’s complaint. Despite arguments from the EEOC that dreadlocks have cultural and historical significance to African-Americans, the court wrote that “culture and race are two distinct concepts.” Hairstyles are mutable characteristics, the court explained, even styles more closely associated with a particular ethnic group, leaving them outside the protections of Title VII.

    Detailed Discussion
    Catastrophe Management Solutions (CMS) had a written grooming policy that stated: “All personnel are expected to be dressed and groomed in a manner that projects a professional and businesslike image while adhering to company and industry standards and/or guidelines . . . hairstyles should reflect a business/professional image. No excessive hairstyles or unusual colors are acceptable . . . ”

    According to the EEOC, CMS made an offer of employment to Chastity C. Jones on the condition that she cut off her dreadlocks. When Jones declined, the company withdrew its offer. The agency filed suit alleging CMS engaged in intentional race discrimination in violation of Title VII.

    CMS defended its actions, arguing that the policy was based on a mutable characteristic – hairstyle – and therefore not racially discriminatory.

    U.S. District Court Judge Charles R. Butler, Jr., agreed.

    “[T]he outcome here is clear,” he wrote. “The EEOC asserts that the policy itself was discriminatory because it was interpreted to prohibit dreadlocks, which is a hairstyle. Title VII prohibits discrimination on the basis of immutable characteristics, such as race, sex, color, or national origin. A hairstyle, even one more closely associated with a particular ethnic group, is a mutable characteristic.”

    Judge Butler rejected the agency’s contention that a hairstyle can be a determinant of racial identity, citing similar decisions refusing to apply Title VII to grooming policies from the Fifth U.S. Circuit Court of Appeals and federal district courts in Alabama, Georgia, and New York.

    The EEOC’s definition of race – encompassing both physical and cultural characteristics, even when the cultural characteristics are not unique to a particular group – would lead to “absurd results,” the court said. For example, a policy prohibiting dreadlocks would not apply to African Americans but would apply to whites, Judge Butler wrote.

    Eliminating the immutable versus mutable distinction to allow the protection of certain traits would contravene Title VII itself, he added, which “prohibits discrimination on the basis of ‘race, color, religion, sex, or national origin’ and not on the basis of ‘traits.’ ”

    The court also declined to let the EEOC present expert testimony or develop additional facts prior to dismissal to establish that the wearing of dreadlocks has sociocultural racial significance for African Americans. “[A] hairstyle is not inevitable and immutable just because it is a reasonable result of hair texture, which is an immutable characteristic,” the court said. “No amount of expert testimony can change the fact that dreadlocks is a hairstyle. . . . Title VII does not protect against discrimination based on traits, even a trait that has socio-cultural racial significance.”

    To read the opinion in EEOC v. Catastrophe Management Solutions, click here.

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    Retirement Plan Contribution Rates Violate ADEA, Fourth Circuit Rules

    Why it matters: Sometimes helping employees can end up hurting employers. Baltimore County, Maryland, ran afoul of the Age Discrimination in Employment Act (ADEA) by requiring older workers to make higher contributions to a retirement benefit plan, the Fourth U.S. Circuit Court of Appeals ruled. The litigation – now in its seventh year – could result in a significant damage award against the County, reminding employers to use caution when establishing or administrating a pension plan and consider the impact of laws like the ADEA.

    Detailed Discussion
    In 1945, Maryland’s Baltimore County established a mandatory pension plan funded in part by the employees themselves. At that time, all employees were eligible for pension benefits at age 65, regardless of the length of their employment. Employees contributed a fixed percentage of their annual salaries based on calculations by an actuarial firm.

    Because the contributions from older employees would earn interest for a shorter period of time than younger employees, the firm recommended that older workers pay a higher percentage. The County agreed. Over the decades, the plan was modified a few times to include additional categories of employees and to add an alternative term of retirement eligibility that permitted employees to retire after a certain number of years of service, regardless of age.

    Two County correctional officers filed charges of discrimination with the Equal Employment Opportunity Commission (EEOC) challenging the disparate contribution rates as a violation of the ADEA. The EEOC agreed and filed a federal complaint in 2007.

    Although a district court initially granted summary judgment to the County, the Fourth Circuit reversed. On its second try, the court granted summary judgment to the EEOC on the issue of liability. This time, the federal appellate panel affirmed.

    “[W]e hold that the district court correctly determined that the County’s plan violated the ADEA, because the plan’s employee contribution rates were determined by age, rather than by any permissible factor,” the court concluded.

    Age was the “but-for” cause of the disparate rates, and employees’ eligibility to retire “had no bearing on the disparate treatment,” the court said.

    The panel provided an example to demonstrate how the plan violated the statute: two correctional officers, ages 20 and 40, enrolled in the plan at the same time. Both employees would become eligible for retirement after 20 years of service.

    “Yet, the 40-year-old in this situation would be required to contribute 5.57 percent of his annual salary while the 20-year-old would be required to contribute only 4.42 percent,” the court wrote. “[T]he older employee contributed a larger percentage of his annual salary to the plan, despite receiving the same level of pension benefits as the younger employee. This disparity in the employees’ contributions would occur even though the County subsidized both employees’ pension benefits.”

    The County offered an alternative justification for the rates: the “time value of money.” But the court rejected that theory. “While this justification may have explained the basis for the disparate rates at the plan’s inception, when the only possible basis for retirement was reaching retirement age, the County amended the plan . . . to permit employees to retire based solely on years of service,” the unanimous panel said. “The County did not modify the rates after employees were permitted the alternative benefit of retiring after working a fixed number of years.”

    The County’s reliance on the ADEA’s “safe harbor provision” in 29 U.S.C. Section 623(l)(1)(A)(ii)(I) was misplaced, the court said. That provision “does not address employee contribution rates nor does it permit employers to impose contribution rates that increase with the employee’s age at the time of plan enrollment,” the panel wrote.

    The court remanded the case for a determination of damages.

    To read the opinion in EEOC v. Baltimore County, click here.

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    Same-Sex Harassment Suit Moves Forward In California

    Why it matters: In a suit alleging same-sex harassment and retaliation, a California appellate court reversed a jury verdict and pretrial rulings in favor of an employer. The case involved a former male intern at a water treatment plant who claimed he was subjected to a hostile work environment by male supervisors. A trial court dismissed his sex harassment claims and a jury found for the employer on the retaliation claim. But on appeal, the court determined the allegations were “because of sex” and severe or pervasive enough to survive a judgment on the pleadings. The panel also ordered a new trial on the retaliation claim because the trial court failed to allow evidence of the alleged harassment and emotional harm to the plaintiff.

    Detailed Discussion
    Brian Lewis began his tenure at the City of Benicia’s water treatment plant as a volunteer before a stint as a paid intern. According to his complaint, two of his supervisors (Steven Hickman and Rick Lantrip) sexually harassed him. When he complained and participated in an investigation, the city retaliated by eliminating his intern position.

    A trial court judge granted summary judgment for the two supervisors and the city on the harassment claims. Despite finding that Lewis engaged in protected activity and that his participation was a motivating reason for the city’s adverse actions, a jury said the city’s conduct was not a substantial factor in causing harm to Lewis, reaching a defense verdict on the retaliation claim.

    On appeal, the appellate panel sided primarily with Lewis, affirming only one ruling for the employer and ordering a retrial.

    Sexual harassment can occur between members of the same gender as long as the plaintiff can establish the harassment amounted to discrimination because of sex, the court emphasized. “[T]he evidence in the present case allows an inference Hickman’s conduct toward Lewis constituted discrimination because of sex,” the court said, and “that Hickman was motivated by sexual interest.”

    In addition to showing Lewis pornographic images on his computer, Hickman told risqué jokes, gave him about 30 different items as gifts (including “tuxedo underwear,” with ruffles and a bow tie), frequently bought him lunch, invited him to his home, and suggested a kiss.

    Based on the evidence, “a reasonable jury could conclude Hickman engaged in ‘sexual advances, conduct, or comments,’ and acted from ‘genuine sexual interest,’ ” the court said. Further, the alleged conduct occurred over a period of several months, allowing an inference that “Hickman engaged in a pervasive pattern of conduct, rather than a few isolated acts.”

    The court affirmed summary judgment for Lantrip, however, despite claims that he made inappropriate jokes, displayed pornographic images on his secretary’s computer, and frequently touched and massaged his secretary inappropriately. The alleged conduct was neither severe nor pervasive enough, the court said, and even if Lantrip inappropriately touched his secretary, it did not provide a basis for Lewis to make a claim of sexual harassment.

    However, because the sexual harassment claim against one of the supervisors was reinstated by the panel, Lewis’s cause of action for sexual harassment and failure to prevent sexual harassment against the city was revived.

    Turning to the retaliation claim, the panel agreed with Lewis that the trial court erred by excluding evidence of Hickman’s alleged sexual harassment and a psychologist’s expert testimony about emotional distress suffered by Lewis.

    “Evidence of Hickman’s conduct was probative as to whether Lewis engaged in protected activity, because it was relevant to whether Lewis reasonably believed the conduct he opposed was discriminatory,” the court said. And evidence of emotional distress would have addressed the causation issue the jury resolved in the city’s favor, the court added, ordering a full retrial on the retaliation claim.

    To read the decision in Lewis v. City of Benicia, click here.

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    California Appellate Courts Uphold Arbitration Agreements For Employers

    Why it matters: Two appellate courts in California delivered good results for employers recently with a pair of decisions upholding arbitration agreements. In both cases, the plaintiff employee objected to the arbitration clauses at issue as substantively and procedurally unconscionable. And in both cases, the panel unanimously agreed to reverse a trial court’s denial of the employer’s motion to compel arbitration, finding that neither the failure to attach the governing American Arbitration Association (AAA) rules for arbitration nor limitations on discovery to just 3 depositions and 20 interrogatories per side rendered the provisions unconscionable.

    Detailed Discussion
    In the first case, a former service manager of CarMax Auto Superstores filed suit alleging wrongful termination, various violations of the state labor code, intentional infliction of emotional distress, and defamation. Michael Sanchez said he was fired after raising safety issues about the cars sold by the dealership despite the employer’s stated reason for his termination, unsatisfactory performance.

    CarMax filed a motion to compel arbitration based on a 2006 agreement Sanchez signed as part of his job application. Sanchez objected, arguing the agreement was both procedurally and substantively unconscionable. A trial court agreed but the appellate court reversed.

    The agreement was a standard contract of adhesion, the court noted, and therefore some evidence of procedural unconscionability was present. However, “[t]he stand-alone arbitration agreement was not hidden, but prominently featured as part of the employment application, and there are no ‘other indicia of procedural unconscionability,’ ” the court said.

    Turning to substantive issues, the panel found that the agreement was not unduly harsh, oppressive, or one-sided. The agreement applied in full force to both parties and Sanchez failed to show how the permitted amount of discovery – 3 depositions and 20 interrogatories per side – would prevent him from vindicating his rights in the case.

    In addition, the agreement provided that the arbitrator could allow additional discovery upon a showing of substantial need. “Without some showing Sanchez would be unable to vindicate his rights, we would not conclude that CarMax’s discovery provisions are unconscionable as a matter of law,” the court said.

    Sanchez challenged other provisions of the arbitration agreement – including a confidentiality requirement and a “just cause” clause – that the court also found were not unconscionable.

    Disagreeing with the trial court that the agreement was “permeated with unconscionability,” the court reversed the order denying CarMax’s motion to compel.

    One week later, a different appellate panel reached a similar conclusion about an employer’s arbitration agreement.

    The second case involved analyst Martin Keith Lane, who sued Francis Capital Management (FCM) on eight counts of various employment-related issues, such as wrongful termination and unpaid overtime wages. FCM moved to compel based on a two-page written arbitration agreement executed by the parties. The agreement mandated arbitration according to the AAA’s then current Employment Arbitration Rules and Mediation Procedures.

    A trial court denied the motion to compel, finding that Section 299 of the California Labor Code applied to the entire complaint, precluding arbitration. With the exception of one cause of action – Lane’s attempt to collect unpaid wages – the appellate court reversed.

    Like Sanchez, the panel found that the agreement was a contract of adhesion, but that fact alone was insufficient to invalidate. Lane contended that FCM’s failure to attach a copy of the applicable AAA rules governing the agreement was enough to render the agreement illegal, but the court disagreed that the error tipped the scales to a finding of unconscionability.

    “There could be no surprise, as the arbitration rules referenced in the agreement were easily accessible to the parties – the AAA rules are available on the Internet,” the court said. “In addition, Lane – a formerly well-paid professional analyst – does not appear to lack the means or capacity to locate and retrieve a copy of the referenced rules. Finally, the arbitration agreement at issue clearly specified a particular set of AAA rules, and it did not modify those rules in any manner. In the absence of oppression or surprise, we decline to find the failure to attach a copy of the AAA rules rendered the agreement procedurally unconscionable.”

    As for substantive unconscionability, the panel said the incorporation of the AAA rules by reference was not sufficient to render the agreement invalid. And Lane’s contention that the agreement contained no express provision for discovery was unavailing. “The agreement incorporated the rules of the AAA, which give the arbitrator the authority ‘to order such discovery, by way of deposition, interrogatory, document production, or otherwise,’ ” the court wrote. “Thus, whether implied or in fact, the discovery permitted by the expressly referenced AAA rules… . . . [and] the lack of an express provision for discovery did not render the arbitration agreement substantively unconscionable.”

    The panel remanded the case with an order compelling arbitration on seven of Lane’s eight claims.

    To read the decision in Sanchez v. CarMax Auto Superstores of California, click here.

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