Employment Law

Supreme Court Hits Pause on State Statutes of Limitation

Why it matters

Weighing in on the definition of “tolled,” the Supreme Court declared the time limit on state claims stops while federal claims are pending. Stephanie Artis filed a Title VII employment discrimination lawsuit in D.C. federal court, adding D.C. state law claims as well. After the statute of limitations for the state law claims had expired, the federal court judge dismissed Artis’ suit. When she attempted to refile her state law claims after the 30-day period delineated by the federal supplemental jurisdiction statute, the court tossed them as time barred. The U.S. Court of Appeals, D.C. Circuit affirmed, rejecting the plaintiff’s argument that the state law limitations period was paused only during the pendency of the federal action. A 5-4 Supreme Court reversed, holding that 28 U.S.C. Section 1367(d) stops the clock when a state claim is in federal court and starts running it again when the tolling period ends. Therefore, Justice Ruth Bader Ginsburg wrote for the majority, Artis timely refiled her state law claims because the state statute of limitations was suspended while her federal claims were pending. Justice Neil Gorsuch authored the dissent, characterizing the majority opinion as “no small intrusion on traditional state functions and no small departure from our foundational principles of federalism.”

Detailed discussion

A health inspector for the District of Columbia, Stephanie Artis filed suit against her former employer in D.C. federal court in December 2011, alleging that she suffered employment discrimination in violation of Title VII. She also asserted three related claims under D.C. state law for retaliation and wrongful termination.

On June 27, 2014, the D.C. federal court granted the employer’s motion for summary judgment on the Title VII claim and declined to exercise supplemental jurisdiction over Artis’ remaining state law claims. “Artis will not be prejudiced because 28 U.S.C. Section 1367(d) provides for a tolling of the statute of limitations during the period the case was here and for at least 30 days thereafter,” the court wrote.

Fifty-nine days after the dismissal of her federal action, Artis refiled her state law claims in the D.C. Superior Court, which granted the District’s motion to dismiss, holding that Artis’ claims were time barred because she filed 29 days too late. The U.S. Court of Appeals, D.C. Circuit affirmed.

Artis filed a writ of certiorari, and the Supreme Court agreed to hear the case to resolve the two competing approaches to interpreting Section 1367(d): a “stop the clock” reading (advocated by Artis) and the grace period reading sought by the employer.

Section 1367 permits federal courts to entertain claims not otherwise within their adjudicatory authority when the claims “form part of the same case or controversy,” including state claims brought along with federal claims arising from the same episode. Section 1367(d) provides: “The period of limitations for any [state] claim [joined with a claim within federal-court competence] shall be tolled while the claim is pending [in federal court] and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”

The question for the justices: “Does the word ‘tolled,’ as used in Section 1367(d), mean the state limitations period is suspended during the pendency of the federal suit; or does ‘tolled’ mean that, although the state limitations period continues to run, a plaintiff is accorded a grace period of 30 days to refile in state court following dismissal of the federal case?”

In an opinion authored by Justice Ruth Bader Ginsburg, the majority sided with Artis to interpret Section 1367(d) as a “stop the clock” provision.

“We hold that Section 1367(d)’s instruction to ‘toll’ a state limitations period means to hold it in abeyance, i.e., to stop the clock,” the Court said. “Because the D.C. Court of Appeals held that Section 1367(d) did not stop the D.C. Code’s limitations clock, but merely provided a 30-day grace period for refiling in D.C. Superior Court, we reverse the D.C. Court of Appeals’ judgment.”

In the context of a time prescription like that found in the statute, the ordinary meaning of the term “tolled” means the limitations period is suspended while the claim is pending elsewhere, Justice Ginsburg wrote, and then starts running again when the tolling period ends, picking up where it left off.

Supreme Court decisions use the words “toll” and “suspend” interchangeably, she noted. Alternatively, the District was unable to point to any federal statute in which a grace period meaning has been ascribed to the word “tolled” or any word similarly rooted, leaving the employer without a statutory text on which to base its interpretation.

This reading was further supported by judicial decisions, with only one Supreme Court decision employing tolling language to describe a grace period, a “feather on the scale against the weight of decisions in which ‘tolling’ a statute of limitations signals stopping the clock,” the Court said.

The majority was not persuaded by the District’s attempt to argue that Artis’ reading would render the 30-day period in Section 1367(d) essentially superfluous. “Including the 30 days within Section 1367(d)’s tolling period accounts for cases in which a federal action is commenced close to the expiration date of the relevant state statute of limitations,” the Court said. “In such a case, the added days give the plaintiff breathing space to refile in state court.”

Adding a “brief span” of days to the tolling period is not unusual in stop-the-clock statutes, the Court added, finding that 30 days “casts no large shadow on Artis’ interpretation.”

Finally, the justices rejected the District’s constitutional concern that Artis’ interpretation exceeded Congress’ authority under the Necessary and Proper Clause because it overstepped states’ rights. Section 1367(d) provides federal court judges an alternative to the option of dismissing all ancillary state law claims that might be time barred in state court and eliminates an impediment to federal court access for plaintiffs pursuing both federal and state law claims arising from the same episode, the majority said.

“With tolling available, a plaintiff disinclined to litigate simultaneously in two forums is no longer impelled to choose between forgoing either her federal claims or her state claims,” Justice Ginsburg wrote. The alternative would require plaintiffs to file two actions and then ask the state court to hold the suit filed there in abeyance pending disposition of the federal suit.

“How it genuinely advances federalism concerns to drive plaintiffs to resort to wasteful, inefficient duplication to preserve their state law claims is far from apparent,” the Court said. “Whenever Section 1367(d) applies, the defendant will have notice of the plaintiff’s claims within the state-prescribed limitations period. Likewise, the plaintiff will not have slept on her rights. She will have timely asserted those rights, endeavoring to pursue them in one litigation.”

The dissent, led by Justice Neil Gorsuch and joined by Justices Anthony Kennedy, Clarence Thomas and Samuel Alito, bemoaned the majority’s imposition on states’ rights. “The Court’s approach will require state courts to entertain state law claims that state law deems untimely not only by weeks or months but by many years,” according to the dissent. “It may only be a small statute we are interpreting, but the result the Court reaches today represents no small intrusion on traditional state functions and no small departure from our foundational principles of federalism.”

To read the opinion in Artis v. District of Columbia, click here.

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California Appellate Panel Affirms Denial of Plaintiff’s Attorneys’ Fees

Why it matters

A California appellate panel affirmed the denial of attorneys’ fees for an employee, despite the jury finding that his physical condition was “a substantial motivating reason” for his termination. William Bustos sued his former employer for a variety of claims, including discrimination in violation of the Fair Employment and Housing Act. Although the jury found his physical condition was reason enough for his termination, it returned defense verdicts on each of his claims. Based on the jury finding, Bustos requested more than $450,000 in attorneys’ fees, relying on Harris v. City of Santa Monica. The trial court denied the motion and the appellate panel affirmed. Even under Harris—where the court said “a plaintiff subject to an adverse employment decision in which discrimination was a substantial motivating factor may be eligible for reasonable attorney’s fees and costs,” even if the discrimination did not “result in compensable injury”—the award of attorneys’ fees is discretionary, the appellate panel explained, and the trial court properly exercised that discretion to deny the fee award.

Detailed discussion

Hired by Global P.E.T. in 2010, William Bustos first worked as a sheet line operator and later as a shift supervisor before his termination in 2013. The following year, he filed suit in California state court alleging seven causes of action, including discrimination and retaliation in violation of the Fair Employment and Housing Act (FEHA).

At trial, Bustos told jurors that he was suffering from carpal tunnel syndrome in his left hand and scheduled for surgery the day after his discriminatory termination. Global countered that Bustos was not discriminated against but let go as part of economic layoffs that also resulted in the termination of a number of other employees. The plaintiff also failed one or more drug tests, the employer said.

The jury returned verdicts in favor of the defense on each of Bustos’ claims and awarded him no damages. However, on the special verdict form for Bustos’ disability discrimination/wrongful termination claim, the jury selected “yes” in response to the question, “Was [Bustos’] physical condition or perceived physical condition a substantial motivation reason for [Global’s] decision to discharge [Bustos]?” The jury also found that Global’s “conduct” was not “a substantial factor in causing harm to [Bustos].”

After trial, the plaintiff requested an award of attorneys’ fees in the amount of $454,857.90, pointing to the California Supreme Court’s 2013 decision in Harris v. City of Santa Monica. In that case, the court ruled that employers may properly assert a “mixed motive” defense in discrimination cases to defeat liability for damages where they can show that the employee would have been fired anyway for a nondiscriminatory reason.

Harris also held that an employee who proved that discrimination was “a substantial motivating factor” for his or her termination can still be entitled to injunctive and declaratory relief, as well as reasonable attorneys’ fees and costs.

While the trial court judge acknowledged that he was “mindful” of Harris, he noted the jury found Global’s conduct was not a substantial factor in causing Bustos harm. “[A]t the end of the day, what we get to, even after Harris, is a discretionary call,” the judge said. “He prevailed on nothing in terms of getting—well, he got nothing from the ultimate verdict. And so for those reasons, it would be difficult for me … to award attorneys’ fees notwithstanding the fact that the ultimate judgment is in favor of [Global].”

The trial court denied the motion for attorneys’ fees, and Bustos appealed.

Beginning with the language of FEHA, the appellate panel said the “prevailing party” in a FEHA action may be awarded reasonable fees. Because the statute does not define the term “prevailing party,” trial courts must conduct an evaluation of whether a party prevailed “on a practical level” with an abuse of discretion standard on review.

Applying this standard, the appellate panel found no abuse of the trial court’s discretion. The combination of the jury’s finding that the plaintiff’s physical condition or perceived physical condition was a substantial motivating reason for his termination, even coupled with the holding in Harris, did not mandate that the trial court award him attorneys’ fees, the court said.

“[I]t is important to emphasize that Harris does not require the trial court to award attorneys’ fees to any plaintiff who proves discrimination was a substantial motivating factor of an adverse employment decision; rather, such a plaintiff ‘may be eligible’ to recover attorneys’ fees,” the court emphasized. “Implicitly, therefore, such a plaintiff may not be eligible to recover attorneys’ fees under FEHA, because he or she is not a ‘prevailing party’ as the term is defined in [the statute]. Or, alternatively, in unusual circumstances, the trial court might exercise its discretion not to make an award of attorneys’ fees, even to a plaintiff who is deemed to have prevailed.”

As for Bustos, it “is not beyond reason to conclude that a plaintiff who obtains no relief at trial—either monetary or equitable—has not ‘realized [his] litigation objectives,’ regardless of whether one or more preliminary questions on a special verdict form were answered in his favor,” the court wrote. “Similarly, defendants who obtain judgment in their favor on all claims are reasonably viewed to have ‘realized [their] litigation objectives,’ regardless of how the judgment was reached. As such, the trial court did not exceed the scope of its discretion by ruling that Bustos should not be awarded attorneys’ fees as a prevailing party pursuant to [FEHA] under these circumstances.”

The plaintiff argued that the “seminal issue” decided by the jury was the reason behind his termination and that because jurors found in his favor, he was truly the prevailing party. But the trial court judge remarked on the jury’s findings, and “it was reasonable for the trial court to give priority to the result embodied by the judgment, rather than the jury’s special verdict findings” in determining who prevailed on a practical level, the appellate panel said, noting that the judge also “explicitly acknowledged” Harris in his explanation.

To read the opinion in Bustos v. Global P.E.T., Inc., click here

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New York City Leave Gets Personal

Why it matters

Workers in New York City will soon be able take leave for a “personal event,” with employers required to provide temporary schedule changes upon request. The bill—which became law after it was passed by the New York City Council and Mayor Bill de Blasio neither signed nor vetoed it—permits an employee to request a temporary change to his or her work schedule because of a “personal event” no more than twice in a calendar year, for up to one business day per request. The term “personal event” includes the need to provide care for a minor child or other care recipient, the need to attend certain legal proceedings, and any other circumstance that constitutes a permissible use of safe or sick time under city law. In addition, the new law protects employees from retaliation for schedule change requests. Certain exemptions apply, such as employees who have worked for the employer for fewer than 120 days or fewer than 80 hours in the city in a calendar year. The law takes effect on July 18.

Detailed discussion

In December 2017, the New York City Council passed Int. 1299-A, which requires an employer to grant an employee’s request for a temporary change of work schedule because of a “personal event.” When Mayor Bill de Blasio failed to sign or veto the bill, it became law on Jan. 19, 2018.

Pursuant to the new law, employees are entitled to two “personal event” requests in a calendar year for up to one business day per request, although employers may fulfill their obligation by permitting a worker to use two business days for one request.

The law defines a “personal event” to include “the need for a caregiver to provide care to a minor child or care recipient,” “an employee’s need to attend a legal proceeding or hearing for subsistence benefits to which the employee, a family member or the employee’s care recipient is a party,” or “any circumstance that would constitute a basis for permissible use of safe or sick time” pursuant to city law.

Employees must notify their direct supervisor or employer as soon as they become aware of the need for a temporary work schedule change, and must signal the change is due to a personal event. While the initial request does not need to be in writing, the employee must submit a written request as soon as practicable, but no later than the second business day after the employee returns to work after the temporary change.

If the employee fails to put the request in writing, then the employer’s required written response is waived. If the employee does provide a written request, the employer must provide a written response within 14 days detailing whether the employer agrees to the request (and if the change will be without pay, which does not constitute a denial); if the request is denied, a reason for the denial; and the number of requests and business days remaining for the employee’s calendar year.

Denial may be warranted if the employee has already exhausted his or her two requests or if one of the limited exemptions applies. The law excludes workers covered by a valid collective bargaining agreement that waives the provisions of the bill and addresses temporary changes to work schedules, employees who have been employed by the employer for fewer than 120 days, and employees who work fewer than 80 hours in the city in a calendar year.

Another exemption covers employers whose primary business for which the employee works is “the development, creation or distribution of theatrical motion pictures, televised motion pictures, television programs or live entertainment presentations” except for related office work and routine physical work.

Int. 1399-A prohibits retaliation for schedule change requests not just for personal events but for other schedule changes as well, requiring the same process of written requests and responses.

Employers who violate the law can be liable for an administrative penalty (payable to the employee) in the amount of $500. If an employer fails to provide the required written response, it can remedy the violation by giving the response to the employee within seven days of being notified of the failure.

The law takes effect July 18. If employees are covered by a valid collective bargaining agreement in effect on that date, the law will take effect on the date that agreement terminates.

To read Int. 1399-A, click here.

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ADA Accommodation Doesn’t Have to Continue, Court Rules

Why it matters

Where an employee was unable to perform the essential tasks of his new position—and had been accommodated in his old role for 15 months—his termination did not violate the Americans with Disabilities Act (ADA), a federal court judge in North Carolina has ruled. Bobby Moore suffered a stroke in 2014 and returned to his job after medical leave and extensive rehabilitation. He was unable to perform all his duties but was not reprimanded, as the employer believed his condition would continue to improve. But after he fell, Moore filed paperwork seeking an accommodation. Finding that Moore was unable to perform the essential tasks of his position, the employer denied the request and transferred him to a new position. When he caused too many errors in his new role, Moore was fired. He sued under the ADA, alleging he was discriminated against and denied a reasonable accommodation. But the court disagreed, granting the employer’s motion for summary judgment. Just because the employer had accommodated Moore in his original position for 15 months didn’t mean it had to continue to do so, the court said, particularly where Moore failed to establish he could perform the functions of the job with or without an accommodation.

Detailed discussion

As a parts clerk for Wal-Mart in Shelby, NC, Bobby Moore was sometimes required to lift and shelve products that could exceed 50 pounds in weight. In 2014, he suffered a stroke that primarily impacted the left side of his body. After medical leave and extensive physical and occupational therapy, Moore returned to his job when his healthcare provider released him to work without restrictions.

At the time of his return, Moore was still in rehab and expected to continue improving. While he could perform much of his job, supervisors observed him leaving tasks undone and not safely and properly performing certain duties. They declined to reprimand Moore in light of the full release to work and their belief he would continue to improve.

After a supervisor observed Moore fall while attempting to enter a forklift, he attended a meeting with a human resources manager and filed the necessary paperwork requesting an accommodation. Wal-Mart denied the request, saying that Moore was no longer able to perform the essential functions of his position. Instead, the employer offered him a job transfer to be a driver coordinator.

Moore accepted but experienced difficulties in adjusting to the new position and was fired in April 2016. He then filed suit against his former employer alleging violations of the Americans with Disabilities Act (ADA). Wal-Mart filed a motion to dismiss.

After deciding that the plaintiff was disabled within the meaning of the statute and that the defendant had notice of his disability, U.S. District Judge Max O. Cogburn Jr. considered whether Moore was denied a reasonable accommodation for his disability.

The plaintiff did not argue that he could still perform the essential functions of his original position with or without an accommodation or that he requested various reasonable accommodations and was denied them. Instead, he told the court that he performed the job for 15 months after recovering from his stroke before his supervisors expressed any displeasure. This demonstrated that Wal-Mart had accommodated him, Moore argued, and there was no reason the employer could not continue to do so.

But this argument missed the point, the court said, as Moore had not presented any evidence that would let a jury find a reasonable or plausible accommodation existed that would allow him to carry out the job’s essential functions. The record included a written job description listing various responsibilities, including lifting up to 50 pounds. Moore’s healthcare provider stated that he could no longer lift more than 20 pounds, while the plaintiff’s own deposition noted he relied on others’ assistance for lifting heavier objects after his stroke.

“Plaintiff is thus physically incapable of performing essential functions of his job, and the only accommodations plaintiff even alludes to are that other employees would help him carry them out (such as climbing ladders in his stead or helping him carry objects exceeding 20 pounds in weight),” the court wrote. “It is well-established that accommodations reallocating essential functions or requiring other employees to carry them out are not reasonable accommodations.”

The uncontested evidence demonstrated that the employer permitted the plaintiff to resume working while only performing certain functions of his job with the understanding he would return to full duty as his condition improved, the court noted. “However, defendant was not required to maintain that diminished level of exertion indefinitely, as the duty to provide an accommodation does not include creating a permanent light-duty position that does not otherwise exist,” Judge Cogburn wrote. “Further, there is no time limit for allowing plaintiff to work at a reduced level as he recovers.”

Further, the defendant also attempted to accommodate Moore with a new role that he could perform with the limitations imposed by his disability, a position that he accepted. “There is no dispute of material fact for a jury to resolve,” the court said.

As for the plaintiff’s argument that he was terminated for his disability, the court found the evidence again failed to support his position.

“Plaintiff does not contest defendant’s evidence of his repeated mistakes as Driver Coordinator, or that defendant showed leniency throughout the process by providing him with additional training and counseling, and by counting groups of mistakes together instead of individually in order to give plaintiff even more time to adjust to the position,” Judge Cogburn wrote. “Indeed, plaintiff admitted in his deposition to the errors and mistakes identified by defendant, and that his termination was the result of poor performance.”

Moore again directed the court’s attention to the fact that for the 15 months following his return to his old job after his stroke, his supervisors didn’t inform him of performance issues, which he said provided an inference of discrimination. But this argument was not “relevant to plaintiff’s performance as a Driver Coordinator and repeated discipline for errors resulting in his termination,” the court said. His reassignment was not based on discrimination either, the court found, as Moore could not perform the essential functions of the parts associate position.

“While sympathetic to plaintiff’s plight, his disability, and his clear desire to work, courts cannot punish defendant[s] for ‘bend[ing] over backwards’ to accommodate plaintiff by deeming defendant ‘to have conceded the reasonableness of so far-reaching an accommodation,’” the court explained. “If courts allowed such actions to proceed as plaintiff suggests, employers would be discouraged from doing precisely what was done here, which was to temporarily lessen the physical requirements of a job in hopes that the employee’s functional capacity would be restored. Such a result would clearly be antithetical to the ADA and the [Americans with Disabilities Act Amendments Act of 2008].”

To read the order in Moore v. Wal-Mart Stores East, click here.

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