Thursday, August 17, 2017

Perry saves the “mixed case”

When Anthony Perry began working for the U.S. Census Bureau in Suitland, Maryland, in 1982, he never could have imagined that it would lead to a landmark victory for federal employees in the U.S. Supreme Court.

After thirty years of faithful service to the Bureau, Perry developed osteoarthritis. While his supervisor allowed him to take breaks during the day and make up the missed time after hours, Perry filed a series of Equal Employment Opportunity (EEO) complaints alleging discrimination based on race and age.

On June 7, 2011, Bureau managers gave Perry a Notice of Proposed Removal. The Notice alleged that Perry had been absent during regular working hours and paid for hours he had not worked. Perry contested the charges and pointed to the informal accommodation that his supervisor had provided and to his unblemished disciplinary record.

In August 2011, Perry and the Bureau entered into a settlement agreement that required him to serve a 30-day suspension, retire no later than September 4, 2012, and forfeit his discrimination claims against the agency.

After Perry served his 30-day suspension and his retirement took effect, he filed a pro se appeal with the Merit Systems Protection Board (MSPB). An administrative judge (AJ) ordered him to show cause why the challenge should not be dismissed for “lack of jurisdiction.” “Specifically, resignations and retirements are presumed to be voluntary, and voluntary actions are not appealable to the Board,” and “the Board cannot review the same claims over which you entered into a settlement agreement with the agency[.]” Perry responded that the settlement agreement had been coerced; therefore, the subsequent major adverse employment actions were involuntary and he could appeal them under the Civil Service Reform Act (CSRA).

Without holding a hearing, the AJ dismissed Perry’s appeal for “lack of jurisdiction.” In particular, the AJ decided that both the 30-day suspension and retirement were voluntary because they resulted from a voluntary settlement agreement. Perry petitioned the full MSPB for review.

The Board granted Perry’s petition and remanded the case back to the AJ. The Board concluded that Perry had “made a nonfrivolous allegation of involuntariness sufficient to warrant a jurisdictional hearing.”

On remand, the AJ held the required hearing and concluded that Perry “failed to prove that he was coerced or detrimentally relied on misinformation when he agreed to settle his appeals.” Accordingly, the AJ once again dismissed the appeal for “lack of jurisdiction.” This time the Board affirmed the dismissal.

The Board’s decision included a notice that stated in part: “You have the right to request review of this final decision by the United States Court of Appeals for the Federal Circuit.” Perry, still without legal representation, filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit. That court promptly issued an order directing Perry to “show cause why this petition should not be dismissed for lack of jurisdiction or transferred to the United States Court of Appeals for the Federal Circuit.” The court also appointed a law firm to submit a brief as amicus curiae.

After receiving briefs, the D.C. Circuit decided in 2015 that since the MSPB found it lacked jurisdiction, and it never reached the merits of the discrimination claims, it would transfer the case to the Federal Circuit. Perry, now represented by an attorney, appealed to the Supreme Court.

In 2012, the Supreme Court held in Kloeckner v. Solis that when the MSPB dismissed a mixed case on procedural grounds, the employee could bring her case to the federal district court for both the discrimination and the civil service issues. In 2016, the Supreme Court agreed to hear Perry’s case to decide if the same rule should apply to “jurisdictional” dismissals by the MSPB.

The oral argument at the Supreme Court was notable in part because it was the first case heard by Justice Neil Gorsuch. He questioned Perry’s attorney about how unfair it was that employees could get “de novo” review of the civil service claims in district court, but not in the Federal Circuit. He asked Perry’s attorney to put “aside Kloeckner” suggesting that, following precedent would “just … continue to make it up.” He asked if Perry’s claims could be bifurcated so that the Federal Circuit could hear at least the civil service claim. Even the government’s attorney had to agree that the mixed case statute is “not elegantly drafted.”

Justice Alito provoked laughter by asking, “who wrote this statute? Somebody who … takes pleasure out of pulling the wings off flies?”

In June 2017, the Supreme Court issued its decision. Writing for the majority of seven justices, Justice Ginsberg explained that, “we are mindful that review rights should be read not to protract proceedings, increase costs, and stymie employees, but to secure expeditious resolution of the claims employees present.” She noted how most federal employees make their appeals to the MSPB without representation by a lawyer.

“An appeal to the MSPB, however, may also complain of adverse action taken, in whole or in part, because of discrimination prohibited by another federal statute[.]” The Court cited the mixed case statute, but missed citing 5 USC § 7701(c)(2)(C) which says, “the agency’s decision may not be sustained ... if the employee … — (C) shows that the decision was not in accordance with law.” If an employee is fired (or suffers another adverse action directly appealable to the MSPB), that employee can prevail by showing that the action violates any law at all.

The Court recalled, as it did in the Kloeckner case, that, “the CSRA provides diverse procedural routes for an employee’s pursuit of a mixed case.” The employee “may first file a discrimination complaint with the agency itself,” in the agency’s equal employment opportunity (EEO) office. Indeed, this is one of the oft misunderstood aspects of the mixed case. If an employee chooses to raise a discrimination claim in a mixed case using any administrative route, that employee preserves all the available civil service and discrimination claims for de novo consideration by a district court.

In the end, the majority held that Congress made no distinction between MSPB dismissals on procedural grounds and those on the merits. The actual legal authorization to decide a case arises from the employee’s allegations, not from the MSPB’s finding of “jurisdiction.” Thus, the Supreme Court directed the D.C. Circuit to transfer Perry’s case to district court so that all of his claims could be considered together.

Justices Gorsuch and Thomas dissented. Writing his first Supreme Court dissent, Justice Gorsuch said that Perry must appeal his civil service claims to the Federal Circuit, and pursue his discrimination claims through the normal agency process and to district court if Perry so chooses. In essence, Perry’s claims would no longer be “mixed.” If the statute needs fixing, Justice Gorsuch says, only Congress can do that.

The majority opinion correctly responded that the statute does not provide for such claim splitting. To the contrary, Congress specifically directed that mixed cases can go to the district court. The district court’s jurisdiction arises from the allegations made to the MSPB, and the statute places no conditions on the employee’s ability to bring discrimination claims to district court.

The Supreme Court’s decision in Perry helpfully clarifies the law and simplifies the procedure for federal employees. It makes clear that the MSPB’s jurisdiction arises from the employee’s allegations and not from any findings by the AJ. The MSPB will need to re-write its boilerplate language for jurisdictional orders to reflect this law of the land.

However, the Perry decision does not resolve all the outstanding issues about mixed cases. Does a discrimination claim create a “mixed case” – appealable directly to district court – when the Civil Service Reform Act claim arises under the Whistleblower Protection Act (which is part of the CSRA)? The Tenth Circuit said yes in Wells v. Shalala. The Ninth Circuit thereafter said no in Kerr v. Jewell. Kerr appealed to the Supreme Court which earlier this year declined to hear her appeal.


By Richard Renner



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Friday, August 11, 2017

If the Clearance Level of My Job Changes, Do I Have Any Rights?

You’re in a job that doesn’t require a clearance and, all of a sudden, you’re notified that your job has been reclassified and now you must either apply for a clearance or move to a non-sensitive position. You’re given a few weeks to finish the application. Do you have any rights?

Two years ago, the federal Office of Personnel Management issued new regulations to systematize the sensitivity designation of all positions in the federal government. These regulations fulfill presidential directions issued through Executive Order 10450.

Every new position in the federal government must have a sensitivity designation established by the “position designation” protocol set forth in these regulations and implemented by the Office of the Director of National Intelligence (ODNI) and the Office of Personnel Management (OPM). Significantly, the 2015 regulations also required that agencies reassess all current positions by July 6, 2017. Because a position’s sensitivity designation affects what sort of clearance the person holding the position must have, this reassessment has forced some federal employees to qualify for clearances or be removed from positions they have held for years.

Each federal agency decides whether a clearance is required for every position, whether the position is newly-created or has been on the books for decades. They do this by assigning a “sensitivity designation” to a position, using standards set forth in 5 C.F.R. § 1400 and implemented by OPM through a Position Designation Automated Tool.

Under E.O. 10450, Security Requirements for Government Employment, a national security position is defined as, “any position in a department or agency, the occupant of which could bring about, by virtue of the nature of the position, a material adverse effect on the national security.” The mandated “position sensitivity designation” must reflect “the responsibilities and assignments of the position as they relate to the impact on the national security, including but not limited to eligibility for access to classified information.” 5 C.F.R. § 1400.101(b).

National security positions must be designated, based on the degree of potential damage to the national security, as either Noncritical Sensitive, Critical Sensitive, or Special Sensitive. 5 C.F.R. § 1400.201. The 2015 regulations set a consistent standard to be applied across the government for the way national security positions are designated.

To hold a Noncritical Sensitive position a person must be eligible for access to Secret, Confidential or “L” classified information or, alternatively, the position must simply have “the potential to cause significant or serious damage to the national security.” 5 C.F.R. § 1400.201(a)(1).

A Critical Sensitive position, most often requiring a Top Secret or “Q” clearance, is one that has “the potential to cause exceptionally grave damage to the national security.” 5 C.F.R. § 1400.201(a)(2) The regulations detail twenty types of positions that might qualify as Critical Sensitive, including those “involving development of war plans . . . military operations, or critical . . . items of war” (§ 1400.201(a)(2)(iii)), those “in which the occupants have unlimited access to or control of access to designated restricted areas” (xix), and those who investigate other Critical Sensitive positions (xxi).

Special Sensitive positions are positions that require eligibility for access to Sensitive Compartmented Information (SCI), or other intelligence-related Special Sensitive information, as in Top Secret Special Access Programs (SAP). 5 C.F.R. § 1400.201(a)(3).

Whether a position is designated as Noncritical Sensitive, Critical Sensitive, or Special Sensitive determines the clearance level required for a person to hold that position. If an existing national security position is now determined to require a higher level clearance, the agency is given only 14 days to initiate the new investigation of the incumbent to determine whether he or she may be granted the higher level access newly required for the position. The regulations make clear that the agency may require the incumbent to submit to the new investigation, providing updated information and releases. It is up to the agency to decide whether the incumbent may continue to hold the sensitive position pending the new investigation. An incumbent who is denied the higher-level access that is newly determined to be necessary is entitled to all of the procedural rights available to anyone denied a clearance, including notice of the specific reasons for the decision and an opportunity to respond. 5 C.F.R. § 1400.301(c)(1).

Nothing in these regulations, however, provides for the incumbent to challenge the re-designation of a national security position as requiring a higher (or lower) clearance. Indeed, the Federal Circuit in Kaplan v. Conyers, relying on the Supreme Court’s decision in Navy v. Egan, held that, “absent congressional action, judicial review of national security matters is generally prohibited.” In Kaplan, the court concluded that this prohibition extended to a challenge to the security designation of a position.

Nevertheless, an affected employee who believes that the security designation of a position has been changed in order to discriminate or retaliate for prior EEO activity may challenge the change through the Agency’s own internal EEO process. Alternatively, if the affected employee claims that a security designation is a reprisal for the employee’s protected disclosure, that employee could use the whistleblower protections established by the Intelligence Authorization Act. The time limit to initiate the federal-sector EEO complaint is 45 days. The Intelligence Authorization Act allows 90 days for a whistleblower complaint.



By Mary Kuntz


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, July 12, 2017

Per Se Violations Do Not Require Any Showing Of Causation

On June 13, 2017, the DC Bar’s Labor and Employment Section presented a panel discussion on Causation Standards in Employment Law. As one of the panelists, I prepared a paper and presented recent developments in per se violations, whistleblower laws, and state statutes and tort claims.

Causation standards matter. These standards determine how easy or difficult it will be for a party to prove its case. In the typical employment discrimination case, the person claiming discrimination has to prove that their protected characteristic (race, color, gender, national origin, religion or disability, for example), was what caused, or motivated, their adverse treatment.

Some claims, however, require no proof of causation whatsoever. These are called “per se” violations because the conduct itself is unlawful – regardless of the true motivation. In federal sector discrimination cases, the EEOC has held that any statements or conduct that discourage employees from reporting discrimination per se violate the law.

For example, in Williams v. Department of the Army, a supervisor told his subordinate “that it would not be in Complainant's best interest to file an EEO complaint.” Even if the supervisor was saying this to provide a helpful warning to the employee, it is still unlawful because it could discourage participation in the EEO complaint process. EEOC has called such comments, “a flagrant attempt to dissuade Complainant from engaging in the EEO process by suggesting or threatening that he [or she] could suffer unpleasant consequences if he [or she] pursued his EEO claims.” The Commission has found that even if a complainant successfully initiates the EEO process in spite of such threats or suggestions, the complainant is still aggrieved.

The National Labor Relations Act (NLRA), 29 U.S.C. § 157, guarantees an employee’s right to share information with co-workers. It does this by saying, “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . ..” These are called the “Section 7” rights and employees who exercise these rights are engaging in Section 7 activity.

The NLRA’s prohibited practices are in 29 U.S.C. § 158(a):
It shall be an unfair labor practice for an employer

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title; [...]

(3) by discrimination . . . to encourage or discourage membership in any labor organization[.]
The National Labor Relations Board (NLRB) investigates and adjudicates claims of violations of this law. On March 18, 2015, the NLRB General Counsel issued a memo explaining how the Board may find that employment policies, typically those found in employee handbooks, can be per se violations of the law.

The most obvious way such a policy would violate Section 8(a)(1) is by explicitly restricting protected concerted activity; by banning union activity, for example. Even if a policy does not explicitly prohibit Section 7 activity, however, it will still be found unlawful if:
  1. employees would reasonably construe the employer’s rule to prohibit Section 7 activity;
  2. the rule was promulgated in response to union or other Section 7 activity; or
  3. the rule was actually applied to restrict the exercise of Section 7 rights.
Employees have a “Section 7” right to discuss wages, hours, and other terms and conditions of employment with fellow employees, as well as with nonemployees, such as union representatives. Thus, an employer's confidentiality policy that either specifically prohibits employee discussions of the terms and conditions of employment—such as wages, hours, or workplace complaints—or that employees would reasonably understand to prohibit such discussions, violates the Act. Similarly, a confidentiality rule that broadly encompasses "employee" or "personnel" information, without further clarification, could reasonably be construed by employees to restrict Section 7-protected communications. Examples of unlawful policies include:
  • Do not discuss “customer or employee information” outside of work, including “phone numbers [and] addresses.”
  • “You must not disclose proprietary or confidential information about [the Employer, or] other associates (if the proprietary or confidential information relating to [the Employer's] associates was obtained in violation of law or lawful Company policy).”
  • “Never publish or disclose [the Employer's] or another's confidential or other proprietary information.”
  • “Never publish or report on conversations that are meant to be private or internal to [the Employer].”
  • Prohibiting employees from “[d]isclosing ... details about the [Employer].”
  • “Sharing of [overheard conversations at the work site] with your coworkers, the public, or anyone outside is strictly prohibited.”
  • “[I]f something is not public information, you must not share it.”
Similarly, if a whistleblower law protects employees who copy documents they are permitted to access, who disclose them to law enforcement authorities, or who otherwise raise concerns about compliance with the law or public safety, then employer policies cannot restrict or discourage these activities. The Department of Labor has held that copying and disclosing employer documents about illegal activities are protected even if these actions violate an employer’s confidentiality policy. Courts have protected employees' collection and submission of documents for use in evidence, as well as employees' investigations of suspicions of illegality, even “before they have put all the pieces of the puzzle together.

The Securities and Exchange Commission (SEC) has started imposing fines on companies that use confidentiality policies or agreements to deter employees or former employees from making disclosures to the SEC, or even from making whistleblower award claims.
  • SEC v. KBR, April 1, 2015 (KBR paid $130,000 for its violation of Rule 21F-17, which was enacted under the Dodd-Frank Act. KBR had “required witnesses in certain internal investigations interviews to sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.”)
  • SEC v. HealthNet, August 2016 (HealthNet paid $340,000 for including in a settlement agreement a provision that the employee waived any SEC whistleblower award).
On August 23, 2016, OSHA issued a policy against approving settlements that restrain protected activities or discourage employees from collecting lawful awards.

Employers must be mindful of these legal boundaries when they prepare their policy manuals or draft settlement or severance agreements. Employees can exercise their rights more freely when they realize what is protected “per se.”




By Richard Renner.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Friday, July 7, 2017

New Guidelines for Security Clearance Decisions

On June 8, 2017, Security Executive Agent Directive 4 (SEAD 4), National Security Adjudicative Guidelines, went into effect. These are the standards used across the federal government to decide whether a person – federal employee, member of the military, or government contractor – may be granted or retain his or her security clearance. These same Guidelines are extended here to serve as standards to determine eligibility for a person to hold a sensitive position, whether or not the occupant of the position has access to classified information. (On its second page, SEAD 4 defines a sensitive position as, “[a]ny position within or in support of an agency in which the occupant could bring about, by virtue of the nature of the position, a material adverse effect on the national security regardless of whether the occupant has access to classified information, and regardless of whether the occupant is an employee, military service member, or contractor.”)

SEAD 4, which updates Adjudicative Guidelines from October 2006, has four parts: the Directive itself and three appendices. The Directive, little more than three pages in length, contains sparse language defining terms, explaining the three appendices, and outlining responsibility for making and recording security clearance decisions. The substance of the document lies in its appendices. Appendix A contains the 13 actual Guidelines, which cover:
  • A: Allegiance to the United States
  • B: Foreign Influence
  • C: Foreign Preference
  • D: Sexual Behavior
  • E: Personal Conduct
  • F: Financial Considerations
  • G: Alcohol Consumption
  • H: Drug Involvement and Substance Misuse
  • I: Psychological Conditions
  • J: Criminal Conduct
  • K: Handling Protected Information
  • L: Outside Activities
  • M: Use of Information Technology
They are the “common criteria” used by all executive agencies to make a security eligibility determination for any covered individual. Changes are evident in most of the thirteen guidelines, but for the most part the changes are minor.

For example, under Guideline D, “sexual behavior” now includes “conduct occurring in person or via audio, visual, electronic, or written transmission,” in recognition of the possibilities afforded by social media and other electronic capabilities. Significant changes include, under Guideline C, a willingness to allow holders of dual citizenship to maintain a clearance given the right predicates. Under Guideline F, concerns raised by a failure to pay taxes may now be mitigated if “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.” Guideline I has added a specific list of behaviors that might cast doubt on a person’s judgment, stability, reliability, or trustworthiness and added two other sections as well. The first makes “voluntary or involuntary inpatient hospitalization” a condition that could raise a security concern. The second addition lists “pathological gambling or associated behaviors” as raising concerns. Guideline J appears to be much altered, but the changes are largely the result of removing Bond Amendment guidance to Appendix B, which is discussed below. However, the new Guideline J now goes beyond the Bond Amendment to make not just “discharge under dishonorable conditions” concerning, but any discharge other than “Honorable.” Guideline M now allows in mitigation evidence that the violation “was inadvertent, promptly reported, there is no evidence of compromise, and it does not suggest a pattern.”

Appendix B contains the Bond Amendment Guidance, gathered here in one place and gaining clarity thereby. The Bond Amendment came into effect in 2008 and prohibits all Federal Government Agencies from granting or renewing a security clearance for any covered person who is an unlawful user of a controlled substance or is an addict. For special access programs specifically, SAP’s, Restricted Data, and SCI, the Bond Amendment makes disqualifying (1) conviction of a felony; (2) dishonorable discharge from the military; (3) determination of mental incompetence. These three disqualifying factors may, however, be waived, in a meritorious case.

Finally, for the first time, authorized exceptions to the Guidelines are outlined in Appendix C. Four categories are provided that allow a security clearance to be granted despite concerning information under the Adjudicative Guidelines or discrepancies in the investigation. The addition of appendices B (Bond Amendment Guidance) and C (exceptions) adds significant clarity to the processing of security clearances. Changes within the Appendices will be discussed in future blogs.


Written by Mary Kuntz.



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Tuesday, June 27, 2017

MSPB Recognizes Authority to Reimburse Tax Consequences of Back Pay Award

It is no secret that EEOC complaints filed by federal employees can take years before they reach a final decision. In such cases, it is not unusual for an award of back pay to encompass five, six, or even more years. In a recent blog, we observed that the EEOC has required agencies to reimburse an employee the difference between the taxes paid in the year the back pay award was received and the total taxes that would have been paid had the pay been received in the earlier years. This difference is called the tax consequence. The EEOC holds that to require the employee to pay the excess taxes detracts from “make whole relief,” and it has recently held that to avoid leaving the employee responsible for taxes on the tax consequence, agencies must “gross up” the payment of the tax consequence to account for future taxes.

The Merit Systems Protection Board, however, has not adopted the EEOC’s approach to these situations. Rather, starting in Wilson v. U. S. Postal Service, the Board has consistently held that it lacks authority to order a remedy for the tax consequences of a back pay award. Until now.

On June 13, 2017, MSPB Administrative Judge Pamela Jackson issued a decision granting the request for the reimbursement of the tax consequences resulting from a back pay award. In Smith v. Dep’t of Transportation, the Appellant, who was represented by KCNF Partner Elaine Fitch, had been suspended for 30 days in 2005 (and was denied a promotion the next year because of the suspension) and he filed a mixed case appeal. (A mixed case appeal includes an allegation of discrimination and/or reprisal.) The Board’s decision adopting the EEOC’s finding of reprisal was in 2012, and the parties finally agreed that the back pay (plus interest) amounted to $93,115, which was paid in 2016. Smith retained an accountant, who concluded that the lump sum resulted in an additional tax liability to Smith of $10,941. Smith requested that amount, plus the $3,700 fee charged by the accountant. The Agency opposed the request, arguing that the Administrative Judge lacked the authority to overrule the Board’s decision in Wilson.

Judge Jackson, however, held that the award of tax consequences was appropriate. First, Judge Jackson noted that the Board’s Wilson decision was issued three years before Congress authorized compensatory damages in Title VII discrimination cases. Thus, in 1988, there was no authority to award tax consequences. Second, the EEOC held in 2001 that an award of tax consequences was consistent with the purpose of compensatory damages, i.e., to compensate the prevailing employee for the injuries caused by the discrimination. And finally, because the Board defers to the EEOC’s interpretation of the discrimination laws, the Board would defer to the EEOC’s decisions requiring reimbursement of tax consequences given the opportunity to do so.

The decision in Smith opens the door to eliminating the anomalous situation in which an employee prevails on a mixed case but part of an ensuing back pay award is erased by the tax consequence of a lump sum payment. If the full Board adopts Judge Jackson’s reasoning, the gap between the relief available from the Board and the EEOC will be closed.


By George Chuzi.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, June 21, 2017

“Follow the Rules Act” Becomes Law

On June 15, 2017, President Trump signed the “Follow the Rules Act,” H.R. 657 ("the Act"), after it passed both the House and Senate unanimously. The Act amends the Whistleblower Protect Act ("WPA"), 5 U.S.C. § 2302(b)(9)(D), to protect federal employees when they are, “refusing to obey an order that would require the individual to violate a law, rule, or regulation[.]” The Act added the last three words: “rule or regulation.”

Through this law, Congress makes clear that it has always intended that federal employees would be protected from retaliation when they refuse to violate a rule or regulation. The House Committee Report No. 115-67 stated, “the provision was an explicit rejection of the general policy for federal employees to ‘obey first, grieve later.’”

The new Act was necessary because the Federal Circuit in Rainey v. Merit Sys. Protection Bd. focused on the word “law” and held that § 2302(b)(9)(D) only protects federal employees when they are refusing to violate a law passed by Congress.

To justify this limited view of the WPA’s protections, the Federal Circuit relied on the Supreme Court’s 2015 decision in Department of Homeland Security v. MacLean, 135 S. Ct. 913 (2015). There, the Supreme Court was considering the provision in § 2302(b)(8)(A), which protects a disclosure about a violation of a law, rule or regulation, fraud, waste, abuse, or a danger to public health and safety:
if such disclosure is not specifically prohibited by law and if such information is not specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs[.]
Federal Air Marshal Robert “Bob” MacLean had disclosed a 2003 plan by TSA to shut down travel by the air marshals to save money. MacLean leaked the plan to MSNBC, and TSA found the money to restore air marshal travel within 24 hours. Two years later, TSA figured out that MacLean had been the whistleblower and fired him for it. MacLean argued that because he only violated a TSA regulation prohibiting disclosures, and not any law passed by Congress, his disclosure was protected.

Notably, Sections 2302(b)(8)(B) and (b)(9)(C) of the WPA protect disclosures to the Office of Special Counsel and any Inspector General, regardless of whether the information disclosed is classified or not.

The Supreme Court agreed with MacLean, and explained its reasoning in part as follows:
a broad interpretation of the word “law” could defeat the purpose of the whistleblower statute. If “law” included agency rules and regulations, then an agency could insulate itself from the scope of Section 2302(b)(8)(A) merely by promulgating a regulation that “specifically prohibited” whistleblowing. But Congress passed the whistleblower statute precisely because it did not trust agencies to regulate whistleblowers within their ranks. Thus, it is unlikely that Congress meant to include rules and regulations within the word “law.”
If the Federal Circuit in Rainey had focused on this text of the Supreme Court’s decision in MacLean, then it would quickly see that the term “law” in Section 2302(b)(9)(D) has a broader meaning than it does in Section 2302(b)(8)(A) because the two uses of the word serve different purposes. In Section 2302(b)(9)(D), Congress used the word “law” to protect federal employees when they take a stand against an illegal order. As it is improper for agency officials to order staff to violate regulations, those regulations should be considered “law” for purposes of protecting the employees under Section 2302(b)(9)(D).

Instead, the Federal Circuit focused on the distinction between “law” and “law, rule or regulation” as those terms are used in Section (b)(8)(A) to decide on the meaning of “law” in Section (b)(9)(D). Because they are different words, the court reasoned, they must have different meanings. The outcome today shows that courts should be more focused on the remedial purpose of the law, rather than the particular words used.

Dr. Timothy Rainey was a Supervisory Foreign Affairs Officer in the State Department’s Bureau of African Affairs. In 2013, he was serving as a contracting officer representative (“COR”) for the Africa Contingency Operations Training and Assistance program. He had refused to follow his supervisor’s order to tell a contractor to rehire a terminated subcontractor. Dr. Rainey argued that carrying out the order would have required him to violate Federal Acquisition Regulation (“FAR”) section 1.602-2(d), 48 C.F.R. § 1.602-2(d), by improperly interfering with personnel decisions of a prime contractor and requiring the prime contractor to operate in conflict with the terms of the contract. On October 13, 2013, Dr. Rainey’s supervisor relieved him of his duties as the COR.

Dr. Rainey originally convinced the MSPB’s Administrative Judge ("AJ") that he had a valid claim under the WPA. However, after the AJ conducted a hearing in the case, the Supreme Court issued its decision in MacLean. The AJ relied on MacLean and dismissed the case. The MSPB and Federal Circuit affirmed. Last December, the Supreme Court denied Dr. Rainey’s request to hear the case.

Significantly, because Congress intended today’s new law to be a clarification of what it always meant in 5 U.S.C. § 2302(b)(9)(D), the MSPB is likely to hold that it has retroactive effect, and should be applied to all pending cases. The House Committee Report helpfully declares the purpose of H.R. 657 as follows:
H.R. 657, the Follow the Rules Act, clarifies that the prohibition against certain personnel actions includes personnel actions taken against any employee or applicant for employment for refusing to obey an order that would violate a rule or regulation.
The MSPB previously held in Day v. Department of Homeland Security that the 2012 Whistleblower Protection Enhancement Act amendments to the scope of protection were clarifying, and therefore have retroactive effect. I co-wrote an amicus brief in Day.

The bottom line is that the Federal Circuit’s holding in Rainey is now legislatively overruled. Indeed, Congress has made clear that § 2302(b)(9)(D) has always protected refusals to violate rules or regulations. Whistleblowers who have cases pending now on this issue need to inform their judges about this new law, and the application of the MSPB’s holding on retroactivity in Day. Together, these points should make clear that such whistleblowers have always had protection under the WPA. 

By Richard R. Renner.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.


Monday, June 12, 2017

Senate Passes Bill Limiting Civil Service Protections at VA

On June 6, 2017, the U.S. Senate passed a bill by voice vote (which means there was no roll call taken and no record of who supported the legislation). While the bill purports to protect war veterans, instead it actually limits the rights of dedicated federal civil servants without ensuring better treatment for the vets. On its face, the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 looks like a progressive piece of legislation. For example, it creates a central office, the Office of Accountability and Whistleblower Protection, to which whistleblowers within the Department of Veterans Affairs (“VA”) may make protected disclosures about waste and mismanagement without fear of retribution. But, upon a closer look, this bill actually shaves away civil service protections that are an integral part of federal employment.

Currently, under 5 U.S.C. § 7513, the VA (together with most other federal agencies) has to provide most of its employees with 30-days’ notice and a chance to respond if it proposes to remove, demote, or suspend them for more than 14 days. The new bill cuts in half the time in which the employee may consult with an attorney and prepare a well-reasoned response from 15 to 7 days. If an employee is removed under current laws, he or she usually has 30 days to file an appeal with Merit Systems Protection Board (“MSPB”). This bill limits the appeal deadline to 10 days for most VA employees. Further, the MSPB Administrative Judge (“AJ”) assigned to the appeal is required to issue a decision within 180 days – regardless of any stalling tactics used by the agency’s attorneys. If the AJ fails to do so, the MSPB must submit a report on the matter to Congressional committees.

Within this expedited review period, the agency’s burden of proof drops from the current preponderance of the evidence standard to the substantial evidence standard, which is much easier for an agency to prove. (In brief, the difference is between “the employee probably did it” – preponderance – and “the employee may have done it” – substantial evidence.) Under current law, if the AJ determines that the agency has met this standard, but he or she believes that the discipline was too harsh given the facts of the case, he or she may mitigate the penalty by imposing a less severe form of discipline (i.e., demotion instead of removal); under the new bill, the AJ would not have that discretion – if he or she finds that the agency has met its burden, he or she may not mitigate the penalty. Additionally, if the VA wishes to remove an employee for performance issues, as opposed to misconduct, under this bill the agency would no longer be required to first put that employee on a Performance Improvement Plan in order to give him a chance to better his job performance.

Reports indicate that the House is likely to pass this legislation and the President is eager to sign it. Some commentators have argued that mismanagement and waste within the VA puts the country’s veterans at risk and radical changes are needed to set the agency right. However, others are concerned that this legislation is not about protecting the veterans but rather a way for small-government politicians to eventually push through wide-sweeping civil service reforms and drastically reduce the size of the federal government.

If you are an employee of the VA or any other federal agency and are facing proposed discipline, you may contact our firm to set up a consultation to discuss your legal rights.


Written by Sarah Martin.

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Monday, June 5, 2017

Burakiewicz, Holland, and DePriest Join KCNF

Kalijarvi, Chuzi, Newman & Fitch, P.C., is pleased to announce that attorney Heidi R. Burakiewicz has joined the firm as a Partner, Stephanie Bryant Holland has joined the firm as Of Counsel, and Robert DePriest has joined the firm as an Associate.

Burakiewicz, Holland, and DePriest have an established practice representing federal employees and their unions in overtime pay, wage and hour violations, free speech and association rights, discrimination, harassment, retaliation, and Privacy Act claims.

Burakiewicz is lead counsel in Martin et al. v. U.S., a collective action on behalf of over 25,000 federal employees in the U.S. Court of Federal Claims. In a July 2014 ruling, the Court determined that the government violated the Fair Labor Standards Act (“FLSA”) by failing to pay the essential employees whom it required to work during the October 2013 shutdown on their regularly scheduled pay dates. In a February 2017 ruling, the court ruled that the government is liable for liquidated damages to the essential employees because it did not act in good faith.

Burakiewicz is also lead counsel in White et al. v. Sessions, a class action on behalf of over 500 female employees of the Federal Bureau of Prisons in Coleman, Florida, alleging that the government failed to take steps to prevent inmates from egregiously sexually harassing them. The case settled in December 2016 for $20 million dollars and a long list of negotiated changes designed to eradicate the sexual harassment. The judge described the outcome as “impressive by any standard” in the January 17, 2017 decision preliminarily approving the settlement.

Biographies of Burakiewicz, Holland, and DePriest are available here.

“We are so pleased to have Heidi R. Burakiewicz, Stephanie Bryant Holland, and Robert DePriest join us,” said Elaine Fitch, Managing Partner of KCNF. “Their practice is a national leader in ground-breaking federal sector compliance with wage and hour and other employment protections.”

Written by Richard Renner.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Friday, May 19, 2017

Ninth Circuit Holds that Dodd-Frank Offers Broad Protection for Whistleblowers

On March 8, 2017, a three-judge panel of the Court of Appeals for the Ninth Circuit ruled in favor of Paul Somers, a former Vice President of Digital Realty Trust. Mr. Somers was fired after disclosing what he viewed to be several serious securities law violations. What distinguished Mr. Somers from many of his fellow Dodd-Frank whistleblowers—and indeed, what could make this an issue for the Supremes—was that Digital Realty Trust fired him before he had the opportunity to transmit this information to the Securities and Exchange Commission (SEC), which is tasked under Dodd-Frank to investigate and prosecute such violations. This, Digital Realty Trust attempted to argue, precluded Mr. Somers from the whistleblower retaliation provisions under Section 21F of the Exchange Act, entitled “Securities Whistleblower Incentives and Protection.”

The Ninth Circuit disagreed. It ruled that Dodd-Frank’s anti-retaliation provision “unambiguously” protected employees who made only internal disclosures. The two-judge majority referred to the legislative history of the Sarbanes-Oxley Act, a law Congress enacted in the aftermath of the 2002 Enron collapse to safeguard investors and to restore public confidence in financial markets. Sarbanes-Oxley, or SOX, plays a key role in Section 21F of the Exchange Act, which states:
No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower—

(i) in providing information to the Commission in accordance with this section;

(ii) in initiating, testifying in, or assisting in any investigation or judicial or

administrative action of the Commission based upon or related to such information; or

(iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), this chapter, including section 78j-1(m) of this title, section 1513(e) of Title 18, and any other law, rule, or regulation subject to the jurisdiction of the Commission.

While Subsections (i) and (ii) clearly only protect disclosures that are made to officials, Subsection (iii) potentially allows for far broader protections. Indeed, the SEC itself interprets Subsection (iii) as providing anti-retaliation protection to internal disclosures:

Finally, our interpretation best comports with our overall goals in implementing the whistleblower program. Specifically, by providing employment retaliation protections for individuals who report internally first to a supervisor, compliance official, or other person working for the company that has authority to investigate, discover, or terminate misconduct, our interpretive rule avoids a two-tiered structure of employment retaliation protection that might discourage some individuals from first reporting internally in appropriate circumstances and, thus, jeopardize the investor-protection and law-enforcement benefits that can result from internal reporting.

The Ninth Circuit’s interpretation deepens the pre-existing circuit split between the Second Circuit and the Fifth Circuit. Where the Second Circuit similarly favored broad protections for employee whistleblowers in Berman v. Neo@Ogilvy LLC, the Fifth Circuit took a much narrower view. In Asadi v. G.E. Energy, LLC, the Fifth Circuit ruled that Khaled Asadi, who served as G.E. Energy’s Iraq Country Executive, could not be considered a “whistleblower” when he reported up his chain of command about practices that he believed violated the Foreign Corrupt Practices Act. The Fifth Circuit hinged its analysis on 15 U.S.C. § 78u–6, which defines “whistleblower” as “any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.” According to the Fifth Circuit, this definition of a whistleblower was “clear,” “unambiguous,” and simply did not protect internal disclosures.

All three courts overlooked a line of cases that have held that reports to company officials are a normal way for workers to commence disclosures that later lead to the government. As such, they deserve the same legal protections as direct disclosures to the government. In Phillips v. Interior Board of Mine Operations Appeals, the D.C. Circuit held that coal miners are protected for making safety complaints to their supervisors. In Kasten v. Saint Gobain Performance Plastics Corp., the Supreme Court held that an oral report to a supervisor about a wage violation is protected under the phrase “filed any complaint.”

Somers v. Digital Realty Trust is still an important victory for whistleblower rights. A narrow interpretation of Dodd-Frank gives employers a perverse incentive to quickly terminate employees after internal disclosures are made, but before they have an opportunity to make a disclosure to the SEC (even though the whistleblowers would still have 180 days to file a SOX retaliation complaint to OSHA). Not only does a narrow interpretation result in serious gaps in legal protection for whistleblowers, but it also completely vitiates the very purpose of federal statutes designed to root out waste, fraud, and abuse.



Written by Nina Ren.



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, May 10, 2017

The Polygraph Confessional

Although the Federal Employee Polygraph Protection Act of 1988, administered by the Department of Labor protects most employees from being required to take a polygraph, federal employees or contractors engaged in national security-related activities may well find themselves required to take and pass a polygraph exam as a condition of being granted access to secure facilities or information.

The idea that simultaneously measuring pulse, blood pressure, respiration, and other largely involuntary physiological functions provides an objective indication of the subject’s state of mind including, especially, whether he or she is telling the truth, has been around for more than a century.  And, although courts have been reluctant to embrace the technology of the polygraph, the federal government relies on the technology to screen employees and contractors before they are allowed to access sensitive or classified information.

Within the federal government, polygraphs are part of the toolbox of Credibility Assessment (CA), which is described as “the multi-disciplinary field of techniques and procedures that assesses truthfulness and relies on physiological reactions and behavioral measures to test the agreement between an individual’s memories and his or her statements.” This sentiment is also reflected in the Polygraph And Credibility Assessment (PCA) Procedures and the Counterintelligence Polygraph Program. Within the Intelligence Community, the Director of National Intelligence (DNI) is charged with administering the CA program; within DOD, the Under Secretary for Defense (Intelligence) (USD(I)) has primary responsibility for the program, but it is the Director of the Defense Intelligence Agency (DIA) who actually manages the Credibility Assessment program. The National Center for Credibility Assessment (NCCA), located at Fort Jackson, South Carolina, provides training for Credibility Assessment for all federal agencies, as well as research into the effectiveness of various techniques and tools.

Polygraph exams may be administered “for personnel security screenings, issue-specific examinations, the adjudication for access to specific types of classified information, and the resolution of other examinee issues.”  Most employees encounter the requirement as part of a new job or security clearance application. You fill out the SF-86 and, if it is required for your agency or job, you find yourself scheduled for a polygraph examination.

If you, as a federal government employee (whether military or civilian) or contractor, are required to undergo polygraph exam, you should receive notice of the exam and its specific purpose. You will be asked to give consent in writing to being polygraphed. You should be told that you may consult a lawyer before either giving consent or being polygraphed. (But your lawyer cannot attend the polygraph session.) At the polygraph, as with providing information on the SF-86 and throughout the clearance application process, you should be wholly truthful and forthcoming in answering questions. At the same time, you should be careful not to agree to statements that are suggested to you by the polygrapher but are not, to your knowledge, true. Hold firm to what you know. Other than technical questions (such as those used to calibrate the polygraph), you should be asked only questions relevant to the particular focus of the polygraph exam. For personnel security screenings, the questions asked in a polygraph exam must arise out of the Adjudicative Guidelines, ICPG 704.2.

You should know that if, during a polygraph exam, you report a possible violation of federal or state criminal laws, the agency is bound to report that information to the Attorney General, the Department of Justice, and to federal investigative agencies (or, in the case of state or local laws, to the relevant law enforcement agency). This holds true for violations of the Uniform Code of Military Justice (which would be reported to the Secretary of Defense and the relevant military criminal investigative unit). Facts that seem to indicate a crime in the planning stages will also be reported.

If you refuse to undergo a polygraph exam, or fail to cooperate during a polygraph examination, you are likely to find that your clearance may be denied or revoked. What the IC calls “purposeful non-cooperation” may also result in a negative determination. Under ICPG 704.6(E)(3)(c), “purposeful non-cooperation” includes confirmed use of polygraph countermeasures. This would include the use of drugs, biofeedback training, or behavioral countermeasures to overcome the physical responses measured by a polygraph. Indeed, instances of an employee simply researching such countermeasures on the web in the days before the exam, if admitted, has been used to justify denying a security clearance.

Federal employees take – and pass – polygraph exams pretty commonly as part of vetting for security clearances. Before undergoing a polygraph, it is good be familiar with the regulations, what they require of you, and how they protect you, although (as noted above) making yourself too familiar may be disqualifying. If you would like to discuss an upcoming polygraph exam, we would be happy to help.

This blog was written by Mary Kuntz.

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Monday, May 1, 2017

Wrongful termination and the internal investigation in Virginia


This blog continues to assess the relationship between wrongful termination and an internal or external investigation. We previously discussed Maryland and District of Columbia law.  We are now focusing on the law in the Commonwealth of Virginia.

Virginia courts strongly adhere to the common law employment-at-will doctrine. As in Maryland and the District of Columbia, Virginia employers can terminate at-will employees for any legal reason or for no reason at all, unless it violates a law or there is a “public policy” exception.

However, the public policy exception is limited. The Supreme Court of Virginia identified a narrow exception to this rule in Bowman v. State Bank of Keysville. Under Bowman, wrongful discharge under its “public policy” exception must fit into one of two categories. The first involves laws containing explicit statements of public policy (e.g., “It is the public policy of the Commonwealth of Virginia [that]...”). The second category involves laws that do not explicitly state a public policy, but instead are designed to protect the “property rights, personal freedoms, health, safety, or welfare of the people in general,” where such laws must be in furtherance of “an [underlying] established public policy” that the discharge from employment violates.

Subsequent Virginia Supreme Court decisions have held that viable Bowman claims for wrongful discharge are limited to three factual circumstances. In Rowan v. Tractor Supply Co., the Court explained: (1) the employer violates a public policy enabling the exercise of an employee's statutorily-created right; (2) the public policy violated by the employer is explicitly expressed in a statute and the employee is clearly a member of the class of persons directly entitled to the protection enunciated by the applicable public policy; or (3) the discharge is based upon the employee's refusal to engage in a criminal act.  Importantly, and as a threshold matter, caselaw indicates that the plaintiff must identify a Virginia statute establishing a public policy that has been violated by the employer.

In contrast with the decision by the Maryland Court of Appeals in Wholey v. Sears Roebuck, there is no internal whistleblowing defense offered to employers in Virginia. Though there is not much case law directly on point, in Seay v. Grace Jefferson Home, et al., the circuit court overruled a demurrer when plaintiff “brought to her employer’s attention certain violations of state law, and cooperated with a state inspector who was investigating those alleged violations. In permitting the wrongful discharge claim to continue, the Court emphasized that the plaintiff “complained to her employer” and also “complained to a representative of the governmental agency charged with investigating wrongdoing of the type complained of.”

Notably, in Bowman, the Supreme Court stated that it was relying in part on the decision in Harless v. First National Bank in Fairmont (also cited in Seay). In Harless, the Supreme Court of West Virginia held that a bank employee, discharged as a result of attempts to require his employer to comply with both state and federal consumer credit protection laws, had stated a cause of action for wrongful termination. In Harless, the interactions were internal. Specifically, the plaintiff brought allegedly illegal actions to the attention of his superiors who were vice presidents of the bank. Subsequently, plaintiff appeared before a bank committee which was investigating the matter. Later, plaintiff was interviewed by one of the defendants and the bank’s auditor. Thereafter, his employment was terminated.

Thus, the analysis in Virginia focuses on the public policy allegedly violated, and not to whom a complaint of wrongdoing is made.

As to internal whistleblowing, there are reports documenting how the large majority of employee disclosures are made internally. Most employees want to see their issues resolved within the chain of command, or within other processes of their employer. This makes protecting the internal whistleblower all the more important to encourage employees to disclose violations and to allow employers to detect them. Please contact our Firm if you are interested in further information on this issue.

Written by Marc Pasekoff.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, April 26, 2017

Working in Cuba

[Photo by Laura Yeomans]
I had the privilege of traveling to Cuba last month as part of the U.S. delegation to the IX Conference of Labor Lawyers and Trade Unionists. Our delegation of 17 lawyers, legal workers, and trade unionists visited a variety of workplaces in Cuba, met with jurists, trade union leaders, and environmentalists, and ate in a variety of fine and very reasonably priced restaurants.

What we learned is that Cuban workers are cash poor, health-care rich, well-educated, egalitarian, participatory, and eager to exchange ideas. Cuba remains a Third-World developing country with a thriving Latin American culture of music and dance.

Long exploited for sugar, coffee and tobacco production, Cuban workers rose from slavery to poverty in the 19th and 20th centuries. Our delegation saw the remains of a 19th century tobacco plantation that relied on slave labor. Urban labor often came from slaves who “bought” their freedom. In 1875, Spain outlawed slavery, but the process took until 1886 to free Cuba’s last slaves. A series of revolutionary movements challenged both the Spanish and, after its 1898 victory over Spain, American domination of Cuba. These culminated in the 1959 revolution, followed by a U.S. trade embargo that remains in force to this day.

About 27% of Cubans belong to unions affiliated with the CTC (Central de Trabajadores de Cuba). That compares with 4.5% of Americans who belong to unions. In Cuba, a job is guaranteed. Workers do not always like the work available to them, and they have the option to start their own business, or form a coop.

During our conference, we heard a presentation written by Muriel Castro, Fidel Castro’s daughter, about how transgender Cubans could use a new non-agricultural coop law to form businesses that would give them an alternative to the discrimination they face in more traditional workplaces.

Since employment is guaranteed, and salaries have very little variation, employment lawyers in Cuba are rarely asked to handle wrongful termination cases. Most labor law disputes involve discipline. Lawyers in private practice belong to collective firms, called “bufetes,” although clients would be represented by the individual lawyer and not by the firm. The fee for hiring a lawyer for a typical labor dispute would be in the range of $1 to $5. The bufete can approve a higher fee in difficult cases.

Cuba passed a labor law in 2014 that protects lesbians, gays, bisexuals and transgender workers from discrimination on the job. The law was considered at local and provincial levels, with feedback to the national legislature before its final adoption. In the U.S., Congress still has not passed a law explicitly protecting members of the LGBT community from employment discrimination, although some courts have determined that Title VII’s prohibition of sex discrimination applies. Cuba is now considering a new family law that would legalize same-sex marriages, but it is not yet adopted. We met a lesbian anthropologist who could not get on the waiting list for IVF services because her marriage to her wife is not yet recognized in Cuba. In this respect, the U.S. Supreme Court accomplished an advancement in legal equality that the national legislatures have not yet done in either the U.S. or in Cuba.

For those who do qualify for IFV or other health care procedures, it would be entirely free to Cubans. There is no need for health insurance, claim forms, co-pays or deductibles. Similarly, college education is also free for all Cubans accepted to be students at the universities.

During our conference, we heard that Cuba is debating a modification to the labor law that would allow managers to award bonuses of up to 2.5% of annual wages for superior performance. Progress in advancing the law is stalled by the details of assuring that performance would be determined objectively rather than subjectively. Meanwhile, in the U.S., the top 1% earns 23% of all earnings. That represents an income inequality in the U.S. of 2,300% compared to the 2.5% that Cuba is considering. Cuban labor lawyers expressed how some increase in wage flexibility might encourage additional foreign investment.

Speaking of investment, it is not coming from the U.S. due to the trade embargo. European, Canadian and Asian interests dominate the investments in hotels, industry and transportation.

Delegates from other Latin American countries had mostly depressing news about governmental plans to scale back on labor protections. One bright spot was Ontario, Canada, which has decided to improve its labor law to encourage unionization. Under the new law, workers can establish a union just by getting a majority of the workers to sign an authorization card. It also expands the opportunities for unionization for domestic workers and the employees of franchises.

I presented a paper called The Uneven Web of Whistleblower Protection. After explaining how being fired can be a serious blow for an American worker, and how the fear of getting fired can deter workers from challenging management, I described the array of whistleblower laws that protect some speech for some American workers. I called attention to the number of areas where Congress has and has not passed any whistleblower protection. We protect food safety whistleblowers, but not pharmaceutical safety whistleblowers. The Affordable Care Act protects health insurance coverage whistleblowers, but not patient protection whistleblowers. We have no federal whistleblower protections specifically for tax compliance whistleblowers or for employees misclassified as independent contractors. My main point was that we can learn about which sectors of our economy have influence over legislation by looking at the holes in our protections for worker free speech.

We saw many other Americans staying at the hotels with us. The U.S. embargo permits U.S. citizens to travel for professional or research purposes. Signing the required declaration about this purpose was easy for us given the conference and other educational activities we attended. Individuals can plan their own trip, get their own visa and schedule air travel to Cuba on American or Jet Blue airlines.

Both American and Cuban workers can learn from their dialogue with each other. Lifting the U.S. trade embargo will go a long way toward increasing that dialogue.

By Richard Renner.

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Thursday, April 6, 2017

Competing Holdings on Sexual Orientation Discrimination in 7th and 11th Circuits

In the past month, two different Courts of Appeals issued decisions about Title VII and sexual orientation discrimination in the workplace and they came to opposite conclusions. The disagreement between the Seventh and Eleventh Circuits virtually guarantees that the Supreme Court (and its newest Justice, Neil Gorsuch, should he survive the confirmation process) will decide the outcome eventually. However, the appeal will not be coming from the defendant in the Seventh Circuit decision, will not be coming from the defendant in the Seventh Circuit decision accepts the holding that Title VII covers sexual orientation discrimination, but still asserts that it did not discriminate against the plaintiff.

In early March, the Court of Appeals for the Eleventh Circuit held that, while a claim of discrimination based on gender non-conformity is actionable under Title VII of the Civil Rights Act of 1974, sexual orientation discrimination is not.

In Evans v. Georgia Regional Hospital, Jameka Evans began working for the hospital as a security guard in August 2012. She wore her hair short and dressed in a male guard’s uniform. Although she is a lesbian, she did not “broadcast” her sexual orientation in the workplace. The head of Evan’s department continually harassed her because Evans did not carry herself in a “traditional woman[ly] manner.” After being passed over for a promotion for which she was more qualified, Evans went to the hospital’s Human Resource’s office and lodged a complaint. The harassment continued until Evans voluntarily left her job in October 2013 due to the hostile working environment.

Evans filed first at the EEOC and then in federal court. However, she asked the court to allow her to proceed in forma pauperis and appoint her counsel, as she did not have the assets to pay the filing fee. The case was assigned to a magistrate judge who reviewed Evans’ petition and determined that, per 28 U.S.C. § 1915(e)(2)(B)(ii), Evans had “fail[ed] to state a claim on which relief may be granted.” Specifically, the magistrate found that Title VII “was not intended to cover discrimination against homosexuals” and that claims of discrimination based on gender non-conformity were “just another way to claim discrimination based on sexual orientation.” The magistrate judge recommended that the case be entirely dismissed. The district court adopted the magistrate’s Report & Recommendation and appointed counsel from the Lambda Legal Defense and Education Fund to represent Evans on appeal.

Evans appealed to the Court of Appeals for the Eleventh Circuit and argued that the district court was wrong to dismiss her sexual orientation discrimination claim. On this point, the Court of Appeals agreed with the lower court and held that there is no sexual orientation action under Title VII. To support its holding, the court relied on a Fifth Circuit case from 1979, Blum v. Gulf Oil Corp.: “Discharge for homosexuality is not prohibited by Title VII”. The court was dismissive of Evans’ reliance on two Supreme Court cases to support her claim: “Price Waterhouse [v. Hopkins] and Oncale [v. Sundower Offshore Services, Inc.] are neither clearly on point nor contrary to Blum. These Supreme Court decisions do not squarely address whether sexual orientation discrimination is prohibited by Title VII.” The court, additionally, found holdings from nine other circuit courts of appeals extremely persuasive that sexual orientation discrimination is not actionable under Title VII.

Curiously, Evans also argued that the district court was wrong to dismiss her gender non-conformity discrimination claim, and on this the Court of Appeals partially agreed. The court pointed to its earlier cases which held that discrimination based on a failure to conform to a gender stereotype is sex-based discrimination and constitutes an avenue for relief under Title VII. However, the court concluded that Evans had not “provided enough factual matter to plausibly suggest that her decision to present herself in a masculine manner led to the adverse employment actions.” Even so, the court held that the district court should have given Evans a chance to amend her complaint and plead more facts to support her claim.

Thus, while the Fifth Circuit ordered the district court to give her an opportunity to amend her complaint in order to include more facts about her gender non-conformity discrimination, it barred her from pursuing her claims of sexual orientation discrimination in this litigation.

Despite the Eleventh Circuit’s decision in Evans, the Court of Appeals for the Seventh Circuit came to a contrary holding less than one month later.

In Hively v. Ivy Tech Community College of Indiana, Hively, a lesbian, taught as an adjunct professor from 2000 until 2014, when her contract was not renewed. During her tenure at the College, she had unsuccessfully applied for at least six full-time teaching positions. Like Evans in the Eleventh Circuit, Hively first filed pro se at the EEOC and then in federal court. The College moved to dismiss Hively’s complaint, and the district court agreed, based on Seventh Circuit precedent that held that sexual orientation is not a protected class under Title VII.

Again, as in Evans, the Lambda Legal Defense and Education Fund represented Hively on appeal to the Seventh Circuit. The three judge panel assigned to the case affirmed the district court’s dismissal of the matter. Hively then requested en banc review (i.e., by the entire court). In an eight to three decision, the Court of Appeals overruled its prior decisions and held that discrimination on the basis of sexual orientation is a form of sex discrimination and, therefore, prohibited under Title VII.

Here, the Court of Appeals approached the issue from two directions. First, the court explained that “[a]ny discomfort, disapproval, or job decision based on the fact that the complainant – woman or man – dresses differently, speaks differently, or dates or marries a same-sex partner, is a reaction purely and simply based on sex” and, therefore, any adverse actions taken against complainant based on that discomfort is illegal under Title VII. Second, the court explored the associational discrimination theory propounded by Hively. Hively argued that Loving v. Virginia struck down miscegenation laws and, therefore, paved the way for a line of employment cases holding that an employee can make a claim of associational race discrimination if his employer treats him adversely on the basis that he is married to a spouse of a different race. The court accepted that argument: “No matter which [protected] category [under Title VII] is involved, the essence of the claim is that the plaintiff would not be suffering the adverse action had his or her sex, race, color, national origin, or religion been different.” The Court of Appeals remanded Hively to the district court to continue litigation.

Moreover, while the Eleventh Circuit totally rejected Evans’ reliance on the Supreme Court’s Oncale decision as “not on point”, the Seventh Circuit embraced the decision as support for its holding. While Oncale did not specifically involve sexual orientation, the decision (which did involve harassment of a man by a group of men) said this:

Title VII prohibits “discriminat[ion] . . . because of . . . sex” in the “terms” or “conditions” of employment. Our holding that this includes sexual harassment must extend to sexual harassment of any kind that meets the statutory requirements.

The Seventh Circuit interpreted that language as holding that “the fact that the enacting Congress may not have anticipated a particular application of the law cannot stand in the way of the provisions of the law that are on the books.” That holding is totally opposite the Eleventh Circuit’s holding in Evans.

Based on decisions like these, it is becoming increasingly apparent that we will not have a nationwide understanding of what protections Title VII offers LGBTQ workers until the Supreme Court decides the issue. However, Ivy Tech Community College has already announced that it will not seek Supreme Court review of the decision. In the meantime, local laws protect LGBTQ people from employment discrimination in approximately 20 states and the District of Columbia.


Written by Sarah Martin


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