KCNBLAWG

EEOC Awards for Pain and Suffering Reach All-Time High

2011-12-09T11:20:00.001-05:00

According to a November 29, 2011 article in the National Law Journal, EEOC commissioners have reported that awards for pain and suffering have reached an all-time high. Ten years ago, the average award was $67,484, whereas in 2011, the average award was $106,000.

Awards for pain and suffering, typically called “compensatory damages,” can be granted to the complaining party who proves that he or she was the victim of unlawful discrimination. The complainant must then demonstrate, through witnesses and documents, the degree of pain and suffering. For example, the individual may have suffered from depression, insomnia, stomach troubles, and other stress-related conditions. Typically, treating doctors, spouses and friends can testify as to how the individual changed in behavior as a result of the discriminatory treatment. The award is based on the amount of pain and suffering that is proven, not on the gravity of the discriminatory conduct at issue in the underlying case.

Many persons embarking on an EEO case imagine that millions of dollars may be awaiting at the end of a hard fought victorious case. This is not true, however. When Congress acted, in 1991, to authorize prevailing plaintiffs to be eligible for compensatory damages in cases brought under the Civil Rights Act of 1964, they set limits on the amount of compensatory damages a plaintiff may be awarded. The maximum amount is $300,000, which can be awarded if the losing employer has 500 or more employees. For employers of more than 200 employees, the maximum award is $300,000. For employers of more than 100 employees, the maximum amount is $100,000. For employers of more than 50 employees, the maximum amount is $50,000.

These caps come as a surprise to some prevailing parties, such as the plaintiff in a case handled by this firm several years ago, Johnson v. West. The jury awarded the plaintiff $3 million, but by law the judge had no choice but to reduce it to the maximum available, $300,00. Fortunately, other relief in the case, including back pay, front pay, and attorney fees brought the total award close to the amount awarded by the jury.

Notwithstanding the compensatory damages cap, other monies may be awarded to victims of discrimination, including back pay, front pay, attorney fees, and the monetary value of lost benefits. Punitive damages are available to employees of private sector employers only, and are limited to cases where the “employer has engaged in intentional discrimination and has done so with malice or reckless indifference to the federally protected rights of an aggrieved individual.” Kolstad v. American Dental Association, 119 S.Ct. 2118 (1999). These damages are capped according to the size of the employer and are the same as those listed above.

2011-11-02T10:57:00.003-04:00

This BLAWG post is by partner Elizabeth L. Newman. You can reach her at enewman@kcnlaw.com.

NUMBER OF SECURITY CLEARANCES SOARS

"Security News," an online publication of the Federation of American Scientist's Project on Government Secrecy, reports that the number of persons who held security clearances for access to classified information last year exceeded 4.2 million:

The large number of security clearances today can be attributed to several factors related to the consequences of the terrorist attacks on 9-11: the surge in military and intelligence spending over the past decade, increased government reliance on cleared contractors, and intensive classification activity that continues today. In addition, many more federal positions require clearances, such as the entire Department of Homeland Security. That department combined a multitude of agencies and positions that had previously been part of other agencies, such as the Departments of Justice, Commerce, State and Interior, including many positions which had not previously required clearances.

Go to http://www.fas.org/sgp/othergov/intel/clearance.pdf for the full Annual Intelligence Authorization Act Report on Security Clearance Determinations for FY 2010.

Think, for example, of positions at the Department of Agriculture and Department of Transportation that deal with regulation of crop-dusters, typically small aircraft used to spraying fields to eradicate insects. Notably, right after 9-11, citing national security, the U.S. Federal Aviation Administration extended a short term ban on crop-dusters, a move prompted by FBI concerns of a possible biological or chemical terrorist attack. In addition, no aircraft capable or equipped for agricultural operations was allowed to operate. The ban came amid concerns by the FBI that terrorists might have been plotting to use the seemingly innocuous aircraft for another attack. Although the ban was eventually lifted, positions at both USDA and DOT are concerned with the security implications of crop-dusters, and those positions now require security clearances.

Many people assume, incorrectly, that if a position does not require access to classified information, then no background investigation or clearance is required. This assumption fails to realize that the government uses the security clearance process to vet candidates for a large range of positions that require the person to be trustworthy, such as financial and information technology positions. For example, individuals who have access to data - even “mock” data used to check how an IT system is running - will occupy positions of “public trust” and have to go through the security clearance process.

The fact that occupants of “public trust” positions must be evaluated using the same set of guidelines that are used for those who need access to classified information leads to an interesting anomaly. That is, one area of concern is whether a candidate for a security clearance has relatives in a country whose interests may be inimical to the United States. It is posited, in a tactic that has been called the “hostage scenario,” that malefactors in certain countries (China, Russia, Syria, and North Korea are the top candidates, but by no means the only ones), might target its citizens who have relatives in the U.S. with security clearances, blackmailing the American by threatening the death of the relative if the American does not turn over classified information. Yet this same scenario is applied in deciding whether to grant a security clearance to a recipient of a “public trust” position who has no access to classified information.

By the way, complaints that such tactics discriminate on the basis of national origin fall on deaf ears, because the security clearance process is largely immune from challenges under the civil rights laws.

It is not expected that the number of positions requiring security clearances will be reduced as time passes.

New Blogger Intro

2011-05-11T14:02:00.002-04:00

Hey,

I'm George Chuzi, and I'll be blogging 0n this site from time to time on topics that are interesting to me and, hopefully, to you as well.

First one will be coming shortly, so stay tuned.

George

In the "Long Overdue" Department: Scrutiny for Alaskan Native Corporations

2010-10-28T11:41:00.005-04:00

Last month, the Washington Post ran a series of articles about Alaskan Native Corporations. ANCs are the progeny of the Alaska Native Claims Settlement Act of 1971, which Congress passed to settle any and all future lawsuits by indigenous Alaskan tribespeople against the United States. Under the ANCSA, Alaska was divided into regions represented by native-owned corporations which were given preferences for federal contracting. All Alaskan natives were entitled to shares in their regional corporations as a birthright. Ownership of these shares entitles Alaskan natives to payments based on the earnings of the regional corporations. These payments are intended to help raise the standard of living in the undeveloped Alaskan wilderness, where many native people continue to live close to the land and sea but also in shocking poverty. On its face, this would all seem to be a good thing.

Unfortunately, as the Post articles point out, problems have developed. To summarize, many ANCs have developed into little more than fronts for regular, non-native federal contractors who actually perform the work which the government is trying to give to ANCs. Certain ANCs or their shell-game subsidiaries are awarded no-bid contracts by the Pentagon and other federal agencies in a hurry, but the work then gets sub-contracted to non-native companies to perform, and the ANCs simply take a cut of the proceeds. Many of the executives running ANCs are not Alaskan natives, and relatively little of the profits from the ANCs’ huge federal contracts is actually being sent back to Alaska in the form of dividend payments. Needless to say, no-bid contracts tend to cost the taxpayer a lot more than competitive ones. Thus, the beneficial purposes of the ANCs have been subverted, and unnecessary extra billions of federal tax dollars have been going to contractors who are not Alaskan Natives or working for their benefit.

The Post focused on the lack of regulatory or financial scrutiny for ANCs, as well as the continuing poverty of many Alaskan natives. However, there is another odious aspect of ANCs which doesn't get much coverage: they are exempt from Title VII, the federal law which prohibits employment discrimination based on race, color, gender, religion, and national origin. Apparently Congress thought the best way to allow ANCs to have a hiring preference for Alaska natives was to give them a get-out-of-jail-free card for any Title VII lawsuits. Why didn’t Congress simply write a native hiring preference into the ANCSA, instead of writing ANCs out of Title VII? It must have made sense at the time. Of course, in light of the contracting shenanigans the Post reported, the exemption means that companies which have done little or nothing to help native Alaskans are nevertheless getting the benefit of the Title VII exemption and are therefore free to discriminate against their employees based on sex, religion, color, and national origin - while raking in billions of taxpayer dollars pursuant to no-bid federal contracts.

This deplorable state of affairs came to our attention a few years ago when a client of ours filed a private-sector charge with the EEOC alleging that she had been terminated based on her pregnancy. She was working under a contract with the Army. Her employer of record was an ANC. The EEOC determined it did not have jurisdiction over her complaint against the ANC, and indeed, there appeared at first glance to be no way she could sue, though pregnancy discrimination has rightly been illegal for decades. She would have been left with no remedy except that, fortunately, the EEOC eventually also agreed with our arguments that the Army had exercised sufficient control over her daily work that it could also be regarded as her employer, along with the ANC, under “joint-employer” theory. Our client was therefore eligible to have her complaint of pregnancy discrimination proceed using the federal sector EEO process, with the Army being named as an employer for purposes of Title VII.

It seems the federal courts are starting to catch on, too: a District Court in Delaware recently concluded that, while ANCs are indeed exempt from Title VII, they are not exempt from the Family and Medical Leave Act or from Title I of the Americans With Disabilities Act. The Court explained:

Turning to the ADA, its broad language and legislative history emphasize its sweeping authority and national scope. Title I of the ADA lacks an ANC exemption; moreover, case law circumscribes its tribal exemption to tribal organizations functioning in a governmental role. While the boundary of the ADA's tribal exemption is imprecise, it is clear that for-profit tribal corporations operating in the ordinary course of interstate commerce fall outside that boundary. . .

The Court rejects Defendants' contention that the Title VII exemption for ANCs also bars employer liability under the FMLA. As the Court stated earlier, supra, the language and legislative history of ANCSA support a narrow construction of the ANC exemption, limiting it to Title VII claims. Further, compared to Title VII and the ADA, the FMLA defines "employer" in broader terms and provides no exemption for ANCs, or even Native American tribes. Additionally, unlike Title VII and the ADA, Title VII and the FMLA do not share statutory language, procedures, or remedies that would support an exemption by inference. Moreover, there is almost no overlap in coverage between the FMLA and Title VII. In the end, there is no substantial evidence suggesting a ANC exemption from Title VII claims as provided for in the ANCSA is somehow expanded to include the FMLA. Therefore, because of the narrow purpose for the ANC exemption—to protect tribal self-governance and to permit an Alaskan Native employment preference—and the FMLA expansive scope, and their divergent purposes, the Court concludes that Alaskan Native Corporations are subject to employer obligations under the Family Medical Leave Act.

Pearson v. Chugach Government Services, Inc., 669 F. Supp.2d 467, 476-77 (D.Del.2009). The Court in Pearson cited a 2007 decision by the U.S. Fourth Circuit which concluded that an ANC employee was not barred from suing his employer under 42 U.S.C. § 1981 (part of the Civil Rights Act of 1866) even though that claim was based on the same facts underlying a Title VII claim, which was barred. See Aleman v. Chugach Support Services, Inc., 485 F.3d 206 (4th Cir.2007).

Since ANCs are not tribal governments - and, per the Post, many barely involve Alaskan natives at this point - the courts act well within reason and the long-standing American public policy against employment discrimination when they construe the Title VII exemption narrowly when deciding whether ANC employees alleging discrimination are even allowed through the courthouse doors.

Supreme Court Preview: Kasten v. Saint-Gobain Performance Plastics

2010-10-12T14:58:00.006-04:00

By now, Supreme Court watchers who pay attention to employment retaliation cases should be very familiar with Professor Eric Schnapper of the University of Washington School of Law. Professor Schnapper has served as co-counsel in a number of recent decisions favorable to employees. In particular, employees represented by teams which have included Professor Schnapper have won some important victories for employees who suffer reprisal for exercising their rights under federal statutes intended to protect workers.

The best known is probably Burlington Northern & Santa Fe Railway Co. v. White, a 2006 decision in which the Supreme Court held that the definition of retaliation includes employer actions which would chill or deter a reasonable employee from engaging in protected activity. Thus, an employer may be found to have retaliated even if it has not terminated, demoted or otherwise taken a "tangible employment action" against an employee. Also, even if an employee is eventually made whole for an adverse employer action intended to punish him or her for engaging in protected activity, the employee is still aggrieved by the fact that s/he was subjected to the treatment at all, and may seeks damages therefor. Thus, a female track worker employed by Burlington Northern was able to show that reprisal occurred when she was

(1) reassigned to a dirtier and more difficult set of duties after she complained of sexual harassment, and

(2) suspended for 37 days without pay after she filed an EEO charge about the reassignment.

The employer had argued that because the employee's change in duties did not result in any lowering of pay, it could not be regarded as the kind of “adverse action” barred by the statute. The employer also argued that because Ms. White eventually received back-pay for the 37-day suspension, she could not claim to have been harmed by the suspension. Wrong, and wrong.

In Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, decided in 2008, the Supreme Court found that Title VII’s prohibition on retaliation against employees who report race or gender discrimination applies to employees who speak out about discrimination only after being asked about it during an investigation. Ms. Crawford was terminated after she was asked about a manager’s harassing activity in an investigation triggered by another employee’s complaint. The employer argued that because Ms. Crawford did not herself file a complaint, but instead only reported the harassing manager’s repulsive conduct after being asked about it, she wasn’t covered by Title VII. Wrong, thank goodness.

Also in 2008, in CBOCS West v. Humphries, where Professor Schnapper was part of the team representing the respondent, the Supreme Court found that 42 U.S.C. §1981, enacted shortly after the Civil War to help codify the end of slavery, permits retaliation complaints. Section 1981 states that all persons within the jurisdiction of the United States “shall have the same right in every State and territory to make and enforce contracts . . . as is enjoyed by white citizens.” Mr. Humphries was terminated from his assistant manager position at a Cracker Barrel after complaining to managers that another assistant manager had been terminated based on race. The lower court concluded that Mr. Humphries had the right to sue under §1981 because he alleged that his termination was motivated by his complaints about the other employee’s rights being violated. CBOCS WEST, which owned the Cracker Barrel in question, argued that §1981 does not permit retaliation claims because retaliation is not expressly mentioned in the text of the statute. Wrong! The Supreme Court relied on an earlier decision which found that 42 U.S.C. §1982, which bans housing discrimination and was enacted at the same time as §1981, also barred retaliation against those who advocate the rights of groups protected by that prohibition. The Court further found that §1981 and §1982 should be interpreted similarly. Finally, the Court noted that the Civil Rights Act of §1991 overruled a 1989 case where the Court had concluded that §1981 does not include retaliation claims. For all these reasons, the Court concluded that Mr. Humphries did have the right to sue under §1981, and sent the case back for trial.

Well, Professor Schnapper is back, this time with a case involving retaliation under the Fair Labor Standards Act. That’s the federal statute which, among other things, requires employers to pay their employees at least a minimum wage, to pay wages on time, to pay overtime for non-exempt workers when they work past their regular hours, and other major aspects of a civilized workplace. The FLSA also permits employees who suffer retaliation after they engage in protected activity under the Act to file suit. In Kasten v. Saint-Gobain Performance Plastics, the question presented is whether the law applies to an employee who was fired after verbally complaining that his employer was violating the FLSA by requiring employees to don special protective clothing without paying them for the time that took. (The FLSA requires employer to compensate employees for the time it takes to “don and doff” mandatory uniforms or safety equipment.) Do the employee’s verbal-only complaints render him “protected” within the meaning of the Act? The employer argues that because Mr. Kasten did not file a written complaint before his termination, he cannot be considered to have “filed” an FLSA complaint at all and thus has no right to claim retaliation under that statute. Both the EEOC and the Department of Labor, which enforces the FLSA, support Mr. Kasten’s argument that the FLSA’s language about “filing” a complaint includes verbal complaints like the ones Mr. Kasten made. In his brief, Mr. Kasten points to numerous other statutes where the Court has treated retaliation as applying both to written and verbal complaints, even where it is not expressly stated in the laws.

Given the Court’s recent track record of interpreting the law on retaliation broadly, Mr. Kasten has reason to be optimistic. Let’s hope Professor Schnapper’s winning streak continues.

Avoiding the Matrix: NASA v. Nelson

2010-10-04T10:52:00.002-04:00

On October 5, 2010, the U.S. Supreme Court will hear oral arguments in a very interesting case concerning the right - or, more likely, the lack thereof - of federal contractors to informational privacy. The U.S. Court of Appeals for the Ninth Circuit, based in San Francisco, granted a preliminary injunction against a new NASA requirement, starting in 2007, that employees at California Institute of Technology’s Jet Propulsion Laboratory, complete questionnaires for a NACI review of their suitability to have long-term access to federal facilities. NASA has a contract with Caltech and owns the JPL, but the people who work there are employees of Caltech, not NASA. The NACI questionnaire is part of a process whereby the government reviews employee-submitted information and solicits information about the employee from former landlords, employers, neighbors and other references. JPL employees were told that their continued access to the JPL facility required them to complete the NACI questionnaire, and that a failure to complete it would constitute a resignation. The employees, many of whom are scientists who have worked at JPL for decades, asked how exactly NASA would use the information gathered in the NACI process to assess their “suitability.” NASA management responded by posting on its website a “suitability matrix” which listed various factors which would be used to determine suitability. The factors which NASA said it would treat as suitability criteria included:

carnal knowledge, sodomy, indecent exposure, voyeurism, obscene telephone calls, indecent proposals, incest, bestiality, homosexuality, cohabitation, adultery, illegitimate children, and mental, emotional, psychological, or psychiatric issues.

Yikes! Should being gay really affect your access to the building where your job is located? How about having children out of wedlock? Or shacking up before you get married? Or seeking mental health care for depression or other common psychiatric conditions?

A group of 28 JPL employees sued, arguing that requiring them to complete the NACI questionnaire violated their right to informational privacy - the right not to have to disclose certain private information (about medical treatment or sexual relationships) to the government. The district court denied their request for an injunction to protect them from having to complete the questionnaires until the case was resolved, but on appeal the Ninth Circuit reversed and granted an injunction. Thus, so far JPL employees have been able to avoid submitting NACI questionnaires while their case proceeds to trial.

Injunctions are not granted lightly. In this case the Court did so after finding that the employees “had raised serious questions as to the merits of their informational privacy claim and the balance of hardships tips sharply in their favor” - after all, if the suitability reviews were not stayed, JPL employees would face the unpalatable choice of either filling out the mandatory questionnaires and thereby probably having their constitutional rights violated, or losing their jobs. Oh, and unlike federal employees, the JPL employees who are determined to be “unsuitable” would not have any due process rights to be told why they were found unsuitable or an opportunity to respond to unfavorable determinations.

The question presented to the Supreme Court is whether two parts of the NACI process:

(1) a requirement to disclose any recent treatment or counseling for illegal drug use, and

(2) a questionnaire which is sent to pretty much everyone you’ve ever known which asks them to provide any adverse information which should be considered as part of the suitability review process,

violate the right to avoid disclosing certain private information to the government.

Based on the briefs, the Solicitor General will be arguing that the government, like any other employer, has the right to conduct background checks. The government will also argue that it is not eliciting private sexual information and is only seeking standard background check information, i.e., verifying residences, educational claims, and former employment. However, the JPL employees point out that they already passed standard-issue background checks when they were hired by Caltech, and that the NACI process goes far beyond verifying their identities and work histories: it collects information for a review of their “suitability.” Complicating the government’s claim that it is not concerned with private sexual information, there is that rather disturbing “matrix” which NASA itself provided when asked how the NACI information would be used. The matrix suggests that the agency is very interested in the JPL employees’ sexual practices, sexual orientations, and intimate relationships, and that it intends to make employment decisions based on that information.

Information about psychotherapy and consensual sexual relationships is about as “private” as it gets. Is there a legitimate government interest in delving into these areas when deciding whether long-time JPL employees will continue to be given access to their own offices in a federal facility? Should the fact that some JPL employees are working on super-cool space and robotics projects make a difference? Only time and the Supremes will tell.

Gonzales and Gonzalez versus DHS

2010-09-30T17:46:00.002-04:00

When a federal agency decides to take action against an employee for misconduct, it is usually required to give the employee 30 days' notice, a written statement of the charges, access to any documents the agency relied upon in formulating the charges, and an opportunity to respond to the charges. An agency can suspend or take another adverse action only if the charges of misconduct are sustained after these due process requirements have been satisfied. Any suspension must be for a specific duration, with very rare exceptions. One of these rarities is the “crime exception,” which allows an agency to place an employee on indefinite suspension with only seven days' notice when the agency reasonably believes that the employee has committed a crime for which a sentence of imprisonment could be imposed. For an agency to have “reasonable cause” for an indefinite suspension, there needs to have been:

(1) an indictment; (2) an employee arrested and held for further legal action by a magistrate; (3) an arrest or investigation accompanied by such circumstances showing reasonable cause; (4) a criminal information; and (5) certain egregious acts such as murder or national security offenses, which are detrimental to the agency’s mission, brought to the agency’s attention by the news media.

Gonzales v. Department of the Treasury, 37 M.S.P.R. 589, *5 (Aug. 17, 1988). In other words, if an agency finds out that an employee has been charged with a crime for which imprisonment is a possible penalty, the agency can suspend that employee without pay with one week’s notice, until the employee is convicted, acquitted, or charges are dropped. After the criminal case is resolved, an agency can always decide to propose the removal of the employee based on the alleged criminal conduct, but the unpaid suspension must end when the criminal prosecution is resolved. The employee will get closure, one way or another. Every suspension must have an “ascertainable end,” even if the precise end date is dependent on what happens in court.

We now learn that, during 2008 and 2009, the Department of Homeland Security suspended at least two employees for indefinite periods, not because they had been charged with a crime, but because the agency was investigating whether the employee has done anything to warrant an adverse action. DHS basically made up a new standard saying that indefinite suspensions were permissible whenever an agency “believes that the employee’s retention on active duty could result in damage to federal property, be detrimental to government interest, or be injurious to the employee, his fellow workers, or the public.” Rather than arrests or charges, these suspensions were based on mere allegations of misconduct which were supposedly being investigated by the agency. The agency never actually charged either employee with any misconduct. Meanwhile, the unfortunate employees were trapped in limbo - suspended without pay - while the agency took its time deciding whether to charge them with anything. After the two employees filed appeals with the Merit Systems Protection Board, the Board found that DHS’s new standard violated the employees’ right to due process. In Gonzalez v. DHS, the Board said:

The agency has not identified, and we are unaware of any legal authority establishing that the mere existence of an agency investigation or inquiry into allegations of misconduct constitutes a circumstance justifying, or cause for imposing, a suspension under 5 U.S.C. § 7513.

Gonzalez was issued in July 2010. In Hodge v. DHS, decided in September 2010, the Board reviewed its recent decision in Gonzalez, and then concluded:

The agency in this case imposed an indefinite suspension against the appellant under circumstances virtually identical to those in Gonzalez. As noted above, it based its actions solely on the fact that it was investigating allegations of misconduct by the appellant and it made no determination that the appellant actually engaged in any misconduct. Like the action in Gonzalez, therefore, the appellant’s suspension cannot be sustained.

In each case, the agency was ordered to rescind the suspensions and pay Gonzalez and Hodge for the entire period they had been suspended.

The moral of this story is that, to suspend federal employees for misconduct, an agency must first charge the employee with the misconduct and sustain those charges, OR suspend the employee while criminal charges are pending against him or her. In the absence of sustained agency charges or pending criminal charges, there's simply no legal basis for a suspension of any duration.

1614 Has Teeth

2010-09-17T16:06:00.004-04:00

As employment lawyers in D.C., our practice includes plenty of federal sector EEO complaints. Over the years, we’ve seen a lot of bad agency behavior when it comes to the processing of EEO complaints. For example: missing deadlines. This is a big no-no in the practice of law. If you miss a filing deadline without a solid-gold excuse (as in, “I’m very sorry, Judge, but our office, with all our client files inside, burned down last night, so I may need an extra week to get that brief filed”), your client is Out. Of. Luck. The courts and agencies like the EEOC have little patience with complainants who don’t follow the rules. Miss a deadline and your complaint will be dismissed without mercy. Yet federal employers, who are supposed to be playing by the same rules as complainants, all too often miss deadlines - whether set by the regs at 29 C.F.R. Part 1614, or by Orders from the Office of Federal Operations or Administrative Judges [AJs] in EEOC’s hearing units - and seem to suffer no consequences. I know of certain agency officials who regard the deadlines in OFO orders as merely “advisory.”

Well.

In two recent federal sector EEO cases, KCN obtained default judgments against agencies after they failed to comply with orders, from AJs or OFO or both, to produce complaint files and complete investigations within certain time frames. A default judgment for the complainant means that the complainant wins their case regardless of the merits simply because the other side has shown such disrespect for the EEOC and the EEO process that they have to be sanctioned, and sanctioned hard, to deter further such conduct.

In one case, after losing an OFO appeal to our client, the agency failed to comply with an Order to complete an investigation within 180 days and produce a complaint file to the local hearings unit. The agency compounded its problems by failing to respond to three separate orders from the hearing unit to produce the complaint file. After KCN moved for default judgment, the agency failed to respond to the motion. Only after the AJ granted default judgment did the agency respond, requesting reconsideration - but still without providing any explanation for its failure to obey the four Orders. Needless to say, reconsideration was denied.

In the second case, the agency failed to respond in any way to our motion for sanctions or motion for partial summary judgment, or to an Order to Show Cause issued by the AJ. Unsurprisingly, the AJ granted our client a default judgment.

Fair is fair. We hope the EEOC will continue to hold agency feet to the fire when it comes to completing investigations, and sending hearing files to the EEOC, on time. Justice delayed can easily become justice denied when someone’s job is on the line.

Undoing Some Recent Supreme Court Damage

2009-10-26T14:28:00.002-04:00

People’s motivations for their conduct can be complicated. It is rare that someone has just one reason for doing something. For example, I might decide to take a vacation to Florida in the winter because it is sunny, and also because I want to visit my relatives there. In other words, I have mixed motives.

The plaintiff in a case recently decided by the Supreme Court also had to deal with the problem of mixed motives. Jack Gross had been working for a company called FBL for more than thirty years, starting when he was in his 20's. In 2003, when he was 54 years old, FBL reassigned him to a position called “claims project coordinator,” and transferred many of the duties he had previously performed to his subordinate, a woman in her 40's.

Gross filed suit, alleging that he was demoted due to his age. FBL responded that it reassigned Gross as part of a corporate restructuring and that Gross’ new position was better suited to his skills. So what is a court to do if both reasons - illegal age discrimination AND a valid restructuring - played a part in FBL’s decision? The trial judge instructed the jury that if the forbidden reason had played any part in FBL's action, they must rule for Gross. The jury found in Gross’s favor and awarded him $ 46,945 in lost compensation.

Since 1967, with the passage of the Age Discrimination in Employment Act (“ADEA”), it has been illegal for employers to discriminate against their older employees (age 40 and above) on the basis of their age. Although the ADEA has many similarities with Title VII of the Civil Rights Act, it is not identical. Over the years, the differences have been the subject of much debate and many law suits.

One of those differences involves how to deal with mixed motives. Under Title VII, if a plaintiff proves that his race, for example, was a “motivating factor” in an adverse action taken by his employer, he has established a claim. At that point, the burden of persuasion shifts to the employer to show that it would have taken the same action anyway. Thus, the Gross trial court's mixed motive instruction to the jury.

But when FBL appealed Gross’s verdict, the Court of Appeals held that the ADEA was different from Title VII. They held that under the ADEA, in order to win, Gross needed to prove not just that that age was “a motivating factor,” but that it was FBL’s “determining factor” in reassigning Gross and replacing him with his younger subordinate.

The Supreme Court agreed. In a 5-4 split, the Supreme Court held that a plaintiff bringing an ADEA claim must prove, by a preponderance of the evidence, that age was the "but-for" cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision. See Gross v. FTL Financial Services.

Earlier this month, both houses of Congress introduced legislation intended to remedy the Supreme Court’s evisceration of the ADEA. See the House and Senate versions here.

As they did when the Supreme Court’s 5-4 conservative majority ruled against Lilly Ledbetter, Congress has now introduced legislation to overrule this decision. Introducing the House version, Rep. George Miller (D) of California’s 7th District noted:

The same conservative Supreme Court justices responsible for the backward ruling against Lilly Ledbetter have now thrown another legal barrier in front of hard-working older Americans. Workplace discrimination based on age is just as wrong as discrimination based on any other irrelevant factor -- and it should be treated as such in the court of law.

Interestingly, the House version has a retroactivity provision that would return things to the way they were before the Gross decision. A similar provision was included in the Ledbetter Act which was signed into law in January 2009.

Some commentators have noted that the acronym for the “Protecting Older Workers Against Discrimination Act” is POWADA. I like it.

-Elizabeth Newman

Ledbetter's Second Act: Impacts on "Failure to Accommodate" Theory

2009-03-13T15:22:00.012-04:00

It has never yet been resolved whether disability plaintiffs who file complaints regarding an employer’s failure to accommodate can seek relief only for failures which occur within the limitations period, or whether a failure to accommodate claim can include related failures outside the limitations period. Plaintiffs have argued that employers should be liable for failures to accommodate which go back years and have had ongoing harmful effects, or for repeated denials of a repeatedly requested accommodation.

By contrast, the timeliness of hostile work environment [HWE] claims has been pretty definitively established since 2002. In National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002), the U.S. Supreme Court held that a HWE is “composed of a series of separate acts that collectively constitute one ‘unlawful employment practice.’” Rather than occurring on a single date, HWEs involve repeated harassing actions which may not be independently actionable, and which cumulatively are sufficiently severe or pervasive to negatively alter the terms and conditions of employment. For this reason, the Court found that the “continuing violation” doctrine is applicable to HWE claims. Under this doctrine, as long as one harassing act which is part of the alleged hostile work environment occurs within the limitations period, the claim is timely and harassing acts outside of the limitations period may also be considered for purposes of determining liability.

Since Morgan, plaintiffs have tried unsuccessfully to analogize failures to accommodate with HWEs, for timeliness purposes. And for quite a while, the EEOC was the only authority willing to “go there.” In 2005, the Commission issued an amendment to Section 2 of its Compliance Manual which incorporated Morgan’s findings on HWE timeliness, and included this tidbit on failures to accommodate:

Repeated occurrences of the same discriminatory employment action, such as discriminatory paychecks, can be challenged as long as one discriminatory act occurred within the charge filing period. [ ] Similarly, because an employer has an ongoing obligation to provide a reasonable accommodation, failure to provide such accommodation constitutes a violation each time the employee needs it. FN 184.

See EEOC Compliance Manual, Chapter 2: Threshold Issues, No. 915.003 issued in July 2005, available at http://eeoc.gov/policy/docs (emphasis added). To the Commission’s credit, it noted a contrary case at footnote 184, signaling “but see Elmenayer v. ABF Freight Sys, Inc, 318 F.3d 130 (2d Cir.2003)(employer’s denial of a proposed religious accommodation that would allow a worker to attend Friday prayer service was a discrete act even though the worker experienced a recurring weekly conflict between his religious duty and his employment requirements).”

In January 2009, the First Circuit issued its own very interesting take on failure to accommodate timeliness, based on Morgan and Ledbetter v. The Goodyear Tire & Rubber Co., 550 U.S. 618, 127 S. Ct. 2162 (2007). In Ledbetter, of course, the Supreme Court did not adopt the EEOC’s above-cited approach to timeliness for paycheck discrimination claims. Instead, it held that

a new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from . . . past discrimination [. . . However,] if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.

127 S.Ct. at 2169 (emphasis added). On this basis, in Tobin v. Liberty Mutual, the First Circuit determined that when an employee repeatedly requests a reasonable accommodation and is repeatedly denied, each denial is a discrete act which restarts the clock for limitations purposes. 553 F.3d 121, 132-33 (1st Cir.2009). The Circuit Court stated:

[Tobin] alleges that Liberty Mutual consistently denied his repeated requests for accommodation and asserts that each denial constituted a discrete act that was the basis for a separate claim of discrimination and carried with it a new statute of limitations. The correctness of his view is the inevitable teaching of the Supreme Court’s cases in this area . . . indeed, in the context of disability discrimination, any other approach would fail to take into account the possibility of changes in either the employee’s condition or the workplace environment that could warrant a different response from the employer to renewed requests for accommodation.

Id. at 133 (internal cites omitted). The First Circuit distinguished Tobin from cases where failure to accommodate claims were found untimely because the discrete denials of accommodations had occurred outside the limitations period and only the continuing impact of the untimely denials were alleged to make the claims timely. See id. at 131-32 (distinguishing Elmenayer, supra; Cherosky v. Henderson, 330 F.3d 1243 (9th Cir.2003); De Leon Otero v. Rubero, 820 F.2d 18, 19 (1st Cir.1987)). The Court noted that in both Cherosky and Elmenayer, “the employers committed one allegedly discriminatory act that had continuous impact on individuals who did not make renewed proposals for accommodation during the applicable limitations periods.” Id. at 132. Similarly, in De Leon Otero, the timeliness of the claim depended on the employee’s efforts within the limitations period to win reversal of a discriminatory discharge, rather than the discharge itself, which took place outside of the limitations period. Id. On this basis, the First Circuit held that “the question we must answer is whether any of Tobin’s requests for accommodation occurred during the applicable statutory periods.” Id. at 133 (emphasis added). It further noted that “the timing of Tobin’s requests for accommodation is an issue of fact the jury should logically have been asked to decide.” Id.

Now, one might wonder whether this decision, based on the Ledbetter decision, has survived the Ledbetter Fair Pay Act, which was enacted specifically to overrule the Supreme Court's findings regarding the timeliness of pay discrimination claims. The Act was signed into law on January 28, 2009 - five days after the Tobin decision was issued. However, the First Circuit’s decision in Tobin should stand, because it stems from the Supreme Court’s conclusions regarding the clock-restarting effects of repeated discrete acts of intentional discrimination (like failures to accommodate). By contrast, the Ledbetter Act overruled the Supreme Court’s findings with respect to the distinguishable situation faced by Mrs. Ledbetter - several years’ worth of unfairly low paychecks resulting from an intentional discriminatory pay decision well outside the limitations period. Thus, enactment of the Ledbetter Fair Pay Act should not affect the specific Supreme Court holding in Ledbetter upon which Tobin is based.

And High Time, Too: A Transgender Rights Landmark

2008-09-26T17:51:00.004-04:00

A federal judge on the D.C. District Court recently issued what may become a landmark decision regarding whether people who are transitioning between genders are protected from gender-based discrimination by Title VII. In Schroer v. Library of Congress, (No. 05-CV-1090(JR)), an opinion both thoughtful and thorough, the Court found that the Library of Congress (LOC) violated Title VII when it withdrew a job offer after the otherwise-highly-qualified plaintiff disclosed that she was in the midst of a gender-transition protocol and would soon begin to dress and otherwise identify as a woman in public. The official to whom Schroer made the disclosure had literally started to write the memo recommending that she be hired when the disclosure was made but, upon learning of Schroer’s plan to change genders, decided not to recommend Schroer and instead offered the job to a significantly less-qualified male candidate who was not going through a sex-change protocol.

The rescinded job offer was for the position of Specialist in Terrorism and International Crime with the Congressional Research Service (CRS) of the LOC. The Specialist’s duties would include providing expert policy analysis to congressional committees, members and staff. Schroer had a very impressive resume, including degrees from the National War College and the Army Command and General Staff Colleges and masters degrees in history and international relations. Schroer had retired as a colonel assigned to U.S. Special Forces Command, and had 25 years of military service, including command and staff positions in the Armored Cavalry, Airborne, Special Forces, and Special Operations units, and combat operations experience in Haiti and Rwanda.

Unfortunately for Schroer, she felt the need to tell LOC about her transition plans before the job offer was formalized. She explained that dressing and presenting as a woman on a daily basis would be the next stage in the transition protocol, and showed the recommending official a photo of herself dressed as a woman. The recommending official was put off by the picture, seeing only, in her words, “a man dressed in women’s clothing,” and expressed bafflement that someone with Schroer’s extensive military background would “want” to become female. Schroer explained that her gender identity was not really a choice. The recommending official immediately contacted LOC’s security officer to ask how transgendering might affect Schroer’s chances of getting the required security clearance. Within twenty-four hours the LOC had revoked Schroer’s job offer.

As its non-discriminatory explanation for failing to hire Schroer, the agency focused on concerns about whether Schroer would be able to get a security clearance given her diagnosed gender-identity disorder (and thus her male-to-female transition). Weirdly, though David Schroer had a clearance, LOC was concerned that Diane Schroer, under her new name, somehow might not. The agency also noted that because CRS Specialists usually provide a brief bio when testifying before Congress, Schroer would lack credibility because no woman could possibly have a resume which included Schroer's particular kinds of military experience. Alternately, Schroer’s bio would tip off everyone who heard it that Schroer was a transsexual, because that was the only way a woman could possibly have such a resume.

Each of these explanations was discredited at trial. As the court noted, the agency overlooked, or made no effort to learn, the salient facts that (1) Schroer already had a security clearance at her old job, (2) clearances are usually honored by new employers as long as the investigative file is complete (Schroer’s was), and (3) Schroer’s military contacts that had so impressed the LOC when it made the job offer were well aware of the impending transition and had no intention of cutting her off because she was becoming female. Also, ironically, the person who got the job instead of Schroer had no clearance for the first several months after he was hired. Thus, none of the LOC's proffered reasons would have posed a real obstacle to hiring Schroer had the LOC made the slightest effort to learn whether they had any merit.

The Court found that the LOC had violated Title VII in two different ways: by sex-stereotyping and by discriminating “because of . . . sex.”

Sex-Stereotyping
The Court invoked a line of cases descended from Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (female employee not promoted because she was regarded as insufficiently feminine in dress and manner). In Hopkins the Supreme Court held that “an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.” A hiring decision based on an employer’s negative reaction to an employee’s non-compliance with sexual stereotypes violates the statute. The Court called recommending official’s negative reaction to seeing the photos of Schroer in female clothing, and her concern that an overtly female or transgendered Schroer would not be taken seriously by Congress, “direct evidence, and compelling evidence, that the Library’s hiring decision was infected by sex stereotypes.”

Discrimination Because of Sex
The Court found that the LOC’s actions violated the plain language of Title VII, which prohibits discrimination “because . . . of sex.” As Judge Roberts noted, “The evidence establishes that the Library was enthusiastic about hiring David Schroer - until she disclosed her transsexuality. The Library revoked the offer when it learned that a man named David intended to become, legally, culturally, and physically, a woman named Diane. This was discrimination ‘because of . . . sex.’” Further, “[i]magine that an employee is fired because she converts from Christianity to Judaism. Imagine too that her employer testifies that he harbors no bias toward either Christians or Jews but only ‘converts.’ That would be a clear case of discrimination ‘because of religion.’ No court would take seriously the notion that ‘converts’ are not covered by the statute. Discrimination ‘because of religion’ easily encompasses discrimination because of a change of religion.” Refusing to hire a person because he or she is changing sexes - rather than religions - is similarly, and blatantly, discriminatory on the basis of sex.

To date, most courts have held that transgendered folks are not covered by Title VII. The Decision in Schroer expressly repudiates prior caselaw in which courts have refused to find that Title VII covers transsexuals by "focusing too narrowly on the statute’s goal of ensuring that men and women are treated equally." This decision is a major step forward by an extremely influential district court. Let’s hope that other judges within the D.C. Circuit, and the appellate court on review, will build on the enlightened approach articulated in Schroer as appropriate fact patterns present themselves in future.

State Ends Extremely Regrettable Ban on HIV-Positive Foreign Service Hires

2008-08-20T15:46:00.002-04:00

The State Department’s medical classification system was changed in earlier this year as a result of another D.C. federal court case, Taylor v. Rice, filed in 9/2003. The plaintiff, Lorenzo Taylor, speaks three languages and graduated from Georgetown’s SFS; he “easily” passed the FS exams (per the Washington Blade) and seemed well on his way to becoming a U.S. diplomat. However, after the State Department found out Mr. Taylor was HIV positive, it revoked his job offer because of his HIV status.

Incredibly, until a few months ago this was State’s ironclad no-exceptions-so-don’t-even-ask policy, even for individual applicants whose HIV was asymptomatic and who thus had no specific health needs related to their positive status. State’s rationale for this blanket policy, as in the breast cancer case discussed below, was that HIV patients might have heightened medical care requirements which could not adequately be met in some posts; therefore, it refused to hire any HIV positive foreign service officers - even those who, like Mr. Taylor, did not have any heightened medical needs or special vulnerabilities - for assignments to any posts.

Mr. Taylor sued, with good reason. The legal term of art for a case like this is “a slam-dunk.” It should be needless to say that State’s former policy, which ignored the actual health status of the individual job applicant, was in blatant violation of the Rehabilitation Act. The Act expressly prohibits discriminating against someone because of their disability or perceived disability. (The courts have held for years that HIV can be a disabling condition because of the obvious substantial limitations it places on major life activities like sex and reproduction. State obviously perceived HIV-positive status to be disabling even if it was not in individual cases.)

Given the slam dunk nature of this case, once the case was set for trial, State wisely settled. Lambda Legal represented plaintiff Taylor, with support from attorneys at Arnold & Porter. Unfortunately, the settlement terms required Mr. Taylor to agree not to seek to join the foreign service. This is actually a loss to the Foreign Service, as the tri-lingual Mr. Taylor was a graduate of Georgetown’s SFS and would have been a shoo-in if not for his HIV status.

Under the new policy, new foreign service officers still must be available for world-wide deployment - but FSO candidates are now entitled to a case-by-case analysis of their actual health condition and capabilities, rather than automatic rejection due to a given diagnosis.

Here’s hoping that these recent developments help to ensure in future that the Foreign Service includes the best and brightest that this country has to offer, even if the best and brightest are unlucky enough to have to deal with HIV or cancer. At least in the future we will not be needlessly deprived of the services of talented foreign service officers solely because of their HIV-positive and cancer-survivor status.

See Lou Chibarro, Jr., “State Department Ends HIV Ban for Foreign Service,” Washington Blade Online, available at http://www.washblade.com/2008/2-29/news/national/12125.cfm.

No Cancer Survivors Need Apply. . .

2008-08-20T15:40:00.001-04:00

In July the D.C. Circuit reversed summary judgment in Adams v. Rice, No. 05-CV-00941, a disability case filed by a candidate for the Foreign Service against the State Department. Ms. Adams took the Foreign Service exam and passed, scoring 7th out of a class of 200. She received her final security clearance and was notified on October 2, 2003 that she could expect to receive an appointment in the Foreign Service in January 2004. The next day, Ms. Adams notified State that she had recently undergone a mastectomy and removal of her ovaries and fallopian tubes as part of successful treatment of early-stage breast cancer. Shortly thereafter, State asked Ms. Adams to provide medical documentation regarding her current condition and future treatment plans and needs. Ms. Adams’ doctor certified that she was cancer-free and that there were no limits on her ability to serve anywhere in the world. Going forward, Ms. Adams needed only an annual mammogram, one daily anti-cancer pill, and a “clinical breast exam” every six months.

Despite the fact that Ms. Adams was cancer-free, State refused to issue her a Class-1 clearance, which would allow her to serve anywhere worldwide - a requirement for new FS officers. Instead, she was given a Class-5 clearance (for those who have “a medical condition which is incapacitating or for which necessary specialized medical care is best obtained in the [U.S.]”) on grounds that only about half of overseas posts had surgeons or oncologists available to perform the semi-annual breast exams she needed. Consistent with State’s policy, Ms. Adams was automatically denied entry into the Foreign Service because she was not “worldwide available.” State later denied Ms. Adams’ request for a waiver even after her doctor explained that any competent physician or nurse-practitioner could perform the semi-annual breast exams.

Ms. Adams sued, arguing, among other things, that she is “disabled” within the meaning of the Rehabilitation Act (and the ADA) because she has a record of a disabling condition - her recent successful bout with breast cancer. She alleged that the State Department discriminated against her on the basis of her disability by refusing to offer her the Foreign Service appointment to which she was otherwise entitled because of her breast cancer. The district court, though calling State’s refusal to accept the medical certifications that Ms. Adams was healthy or to find a way to meet her few medical needs “callous and unreasonable,” granted summary judgment because it found that she was not covered by the Act. The D.C. Circuit reversed, finding that Ms. Adams is “disabled” because she has a record or history of a medical condition (breast cancer) which has substantially limited at least one major life activity - sexual reproduction. Ms. Adams testified that her cancer treatment has had residual psychological effects - a severe fear of rejection based on her changed physical appearance and a loss of libido - which have left her “limited in the major life activity of sexual contact and romantic intimacy.” The government did not challenge Ms. Adams’ assertions regarding her post-cancer psychological state, and the Circuit Court held that engaging in sexual relations qualifies as a major life activity. It further held that she had alleged a substantial impairment in that activity. Therefore, she is “disabled” within one meaning of the disability statutes, and her case was remanded for trial.

Message to State: after a federal judge has called you “callous and unreasonable,” you would do well to keep the facts in question away from a jury. Break out the checkbook and do the right thing.

The GAO Strikes Back!!

2008-05-20T18:42:00.002-04:00

On May 14, the House Agriculture Committee conducted a hearing into USDA’s "progress" in improving its treatment of minority farmers and employees. At the hearing, the GAO reported that USDA’s claims about its progress in reducing a backlog of employment or program complaints of discrimination cannot be verified, due to poor record-keeping. The Washington Post quoted Lisa Shames of the GAO, who testified that “at a basic level, the credibility of USDA’s efforts has been and continues to be undermined . . . by faulty reporting of data on discrimination complaints and disparities in . . . data.” She added. “Even such basic information as the number of complaint is subject to wide variation in . . . reports to the public and the Congress.”

According to the Post, the EEOC and GAO have repeatedly criticized USDA for taking an average of two years longer than standard to process employment complaints. This has lead to serious, though apparently unquantifiable, complaint backlogs. Even worse, according to Rep. Edolphus Towns (D -NY), USDA civil rights employees are subject to retaliation when they report discrimination. Meanwhile, John Boyd of the National Black Farmers Association said, “We think civil rights is going backwards at the department . . .They can’t tell us what’s going on with the cases. There’s no commitment whatsoever to rights. The GAO testimony supports what we’ve been saying for the past couple of years.”

USDA Civil Rights was in the news earlier this year when Civil Rights employees were ordered by managers not to speak to GAO auditors and the auditors themselves were ejected from the building. See “USDA Shuts Down Congressional Audit,” Associated Press, 2/28/2008. The thwarted auditors were seeking - wait for it - information for an ongoing audit on USDA Civil Rights and its handling of discrimination complaints. USDA OCR actually instructed employees, in writing, “not to meet with any member of the [GAO] today, or until this matter is resolved.” In writing!

USDA CR's open attempt to keep its employees from talking to GAO was simply amazing given that a hearing was already in the works. Senator Grassley announced back in January that he would hold a hearing on USDA's "progress" in shaking off its disgraceful history as the last of the "old-line" agencies. (For the uninitiated, "old-line" is code for "openly hostile to minority employees and farmers.") Not sure how the House got there first, but the question remains: what could USDA have been thinking?

The moral of this story: unless you’re Dick Cheney, don’t fight the GAO. They know the big guns on the Hill and the scuffle will end with you sitting in a hearing room having your head handed to you while the Post and the AP take notes.

A Tale of Two Branches

2008-05-20T18:29:00.002-04:00

It’s interesting the different approaches of the Executive and Legislative branches to the whole whistleblower thing. The 110th Congress has been working for quite some time towards increasing the protections available to federal employees who make protected disclosures and out their federal employers as having violated some law. The Whistleblower Protection Enhancement Act (H.R. 985) is intended to strengthen protections which are supposed to be in the Whistleblower Protection Act but have been significantly eroded by Federal Circuit case law over the years. The House version is excellent, including protections for:

(1) national security whistleblowers at the FBI and intelligence agencies;

(2) government contractors; and

(3) federal baggage screeners;

(4) jury trials for a fair day in court; and

(5) reinforced protections for federally-funded scientists.

The House passed H.R. 985 in March 2007 and the Senate passed a somewhat less impressive version of the same legislation (S.274) unanimously in December 2007. Yay, Congress! The bill, which has been hatching for the last eight years, is now in conference committee. Presumably, at some point, it will emerge and will go to President Bush. Who will then veto it.

Why? Good question. This administration’s hostility to whistleblower rights is both totally irrational and quite startling. Congress earlier cleverly packaged some defense contractor whistleblower protections in H.R. 4986 - the National Defense Authorization Act for Fiscal Year 2008 - which the president could hardly veto. Section 846 of the NDAA08 would protect employees of defense contractors when they report fraud to Congress, an inspector general, the GAO, or a DOD employee charged with overseeing contracts. Who could possibly disagree with that?

The Decider, that’s who. Unfortunately, the President had recourse to one of his infamous and almost certainly unconstitutional signing statements. The signing statement for H.R. 4986 reads, in pertinent part:

Provisions of the Act, including sections 841, 846, 1079 and 1222, purport to impose
requirements that could inhibit the President’s ability to carry out his constitutional
obligation to take care that the laws be faithfully executed, to protect national security, to
supervise the executive branch and to execute his authority as Commander in Chief. The
executive branch shall construe such provisions in a manner consistent with the
constitutional authority of the President.

Got that? No matter the plain language of the statute that was enacted by Congress consistent with all constitutional requirements. The Executive Branch will not enforce it.

Umm, how can they do that? Again, good question.

(Thanks to the Whistleblower Protection Blog for reporting this issue.)

Unsurprisingly, elsewhere in the Executive Branch, whistleblowers are having a hard time of it under the current state of the law. On March 25, a group called Public Employees for Environmental Responsibility (PEER) released its analysis all of the decision by Labor Secretary Elaine Chao’s Administrative Review Board (ARB) from 1996 through 2006 under the Whistleblower Provisions of the Clean Air Act, Safe Drinking Water Act, Superfund, Clean Water Act, Toxic Substances Control Act, Solid Waste Disposal Act and the Energy Reorganization Act. The ARB reviews all recommended decisions by non-partisan administrative law judges following evidentiary hearings into each whistleblower’s claim.

Our readers will no doubt be shocked to learn that reversals of pro environment whistleblower decisions rose 250% during the Bush years. PEER reports that the Bush ARB reversed 7 out of 10 pro-whistleblower decisions, in stark contrast to the Clinton ARB, which affirmed 7 out of 10. Incredible.

Retirement Becomes Slightly More Realistic ...

2008-02-25T15:41:00.005-05:00

As employment lawyers, we inevitably deal with retirement and other employee benefit issues, but at this firm we aren't employment benefits specialists. (They would be the geeks who aced all the tax courses in law school.) However, no tax expertise is required to recognize the importance of the Supreme Court’s recent ruling that individual employees who participate in a 401(k) have a right to sue for equitable relief when the value of their individual retirement assets has been depleted due to a fiduciary breach by plan administrators. In LaRue v. DeWolff, Boberg & Associates, Inc., et al., Slip op. 06-856, decided on February 20, 2008, the Court held that §502(a)(2) of the Employment Retirement Income Security Act of 1974 (ERISA) “does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual account.” Interestingly, there were no dissents, but every justice signed on either to the majority opinion (by Justice Stevens) or to the concurrences by Chief Justice Roberts (wondering whether §502(a)(1)(B) is not a better fit) and Justice Thomas (construing “losses to the plan due to fiduciary breach” to include losses within LaRue’s individual plan account).

The majority opinion is short and to the point. Primarily, it distinguished LaRue’s 401(k) problems from those at issue in an earlier case, Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134 (1985), which the lower courts had referenced in dismissing LaRue. Mr. LaRue argued that a failure to reallocate his plan assets as he had instructed had lowered their value by approximately $150,000. He was seeking to recover those losses. The Court noted that ERISA’s definition of fiduciary obligations is primarily concerned with payment of benefits to beneficiaries, the financial integrity of the plan and plan asset management and stated, “The misconduct alleged by [LaRue] falls squarely within that category.” By contrast, the employee in Russell suffered secondary losses due to an improper temporary termination of benefits but did eventually receive all of the benefits to which she was entitled under the plan. In Russell the Court held that ERISA §502(a)(2) does not permit individual beneficiaries to recover compensatory or punitive damages for delayed payment of benefits.

From the employee’s perspective, LaRue is a very positive development. ERISA was enacted in 1974 and, as I seem to recall from that extremely interesting class way back in law school, has not been updated in particularly helpful ways since then. Back in 1974, many employers offered honest-to-goodness pension plans ("defined benefit plans") wherein, if you gave the company twenty or thirty years, the company would take care of you in old age. (Health care costs were much more reasonable back then, too.) Many of ERISA’s retirement-security provisions are concerned with old-style pension plans, which are increasingly irrelevant today. Today, pensions are almost solely available to public sector employees; most private-sector employees do not expect to receive anything other than social security benefits and the proceeds of whatever they themselves have invested through 401(k)’s and other "defined contribution" investment vehicles. If you are lucky, your employer matches your 401(k) contribution. Thus it is crucial that individuals have the right to seek redress if a plan fiduciary violates its duty of care in ways that could seriously diminish the value of individual retirement savings.

ERISA is based on the law of trusts. The decision in LaRue is consistent with the idea that a person who willingly accepts responsibility for managing a retirement plan has a heightened duty of competence and loyalty to plan participants - like a trustee or the executor of an estate. If a plan administrator pockets retirement funds, invests retirement funds for his or her own benefit, or, as in LaRue, fails to comply with employee requests to reallocate funds within a reasonable amount of time, s/he shouldn’t be in charge of a retirement plan with millions of dollars in assets. And the employee now has a way to recover the lost value.

Importantly, in LaRue the court did not address whether a fiduciary breach had actually occurred in the case, whether the depletion in value was as great as the employee claimed, or whether the depletion in value was attributable to the alleged breach. Now that the Supreme Court has decided that Mr. LaRue has the right to sue, he must prove all of these key points in the trial court.

The Court also expressly stated that it was not ruling on whether Mr. LaRue was required to exhaust the complaint process specified in his plan’s handbook and other documents before bringing his case in court. This is a very dangerous issue: it may well turn out that, though he has scored a great victory for employees who have 401(k)s, he forfeited his own right to obtain relief by failing to complain timely about the plan’s failure to reallocate his assets in a timely manner or to exhaust the entire dispute resolution process specified in the plan before going to court. It is an (all too common) recipe for disaster. The moral of nearly every story that involves ERISA is this: you must be familiar with the plan documents because they establish the rules of the game. If the plan documents say that you have to complain about or grieve a problem within a set amount of time, make sure you do it. For his sake, we hope Mr. LaRue did.

Opening Argument

2008-01-17T13:51:00.000-05:00

Hello! Welcome to KCNBLAWG, the blog of law firm Kalijarvi, Chuzi & Newman, P.C. Located in downtown Washington, D.C., this firm was founded thirty years ago by June Kalijarvi, one of the first women to graduate from Georgetown University Law Center. When she graduated, June found that literally no employer was willing to hire her because she was a woman, her Georgetown law degrees notwithstanding. Thus, she had no choice but to start her own firm, and she decided to specialize in the then-brand new field of employment discrimination. Thirty years later, we’re still going strong, and still practicing in the ever-evolving and absolutely crucial area of employment law - the one practice area which impacts nearly every person in this country every day.

Due to our location, we specialize in federal employment cases but we also represent private sector clients as well. We represent employees, agencies, private-sector employers and non-profits. Our practice is nationwide: we travel to all fifty states and abroad for federal cases and have worked with local counsel in jurisdictions where our attorneys are not licensed to practice. Just FYI, the attorneys of this firm are licensed to practice in Maryland, Virginia, Pennsylvania, New Jersey, New York, California, and, of course, the District of Columbia.

The “vision” for this blawg is to be a weekly-updated employment law blog which will point out interesting developments (okay, “interesting” to people who care deeply about employment law) either by posting our own content or by providing links to other websites or articles of interest. We will of course also provide you with our take on the issues, because (we are constantly told) we are extremely argumentative. (Hello, we’re litigators!) We won’t be discussing our own cases unless and until there is a final disposition that is a matter of public record and/or a settlement that is not subject to a confidentiality clause.

Caveats: Please note that this blawg will emphatically NOT be providing legal advice. Employment law, like most practice areas, is extremely fact-specific. Title VII, the ADA and the ADEA are complicated, to put it mildly. Even the most basic considerations - like the deadlines for filing complaints - can vary depending on what seems like negligible details to the average person. If we happen to discuss a certain case (or statute or reg) herein and it sounds like the case might have some applicability to problems you are experiencing at work, please do not think that you can rely on the blog entry as legal advice. Just to be clear: you can’t rely on the advice of anyone who isn’t your attorney. And you aren’t our client unless you have (1) called us to make an appointment, (2) come in for a consult, (3) received an offer by us to represent you, and (4) signed a retainer agreement. So, if you think you may have an employment claim or lawsuit, even if you don’t call us, please contact an attorney and be prepared to pony up the money to get professional advice about your individual case. Even if you find out that you don’t have a case, it could be the wisest money you’ve ever spent because you won’t spend the next two years trying to convince a judge that your case should not be dismissed even though you missed a filing deadline or forgot to mention something crucial until a year into the case (e.g., that in addition to being a racist/sexist/ageist jerk, your boss also demoted you two years ago after you refused to go out with him (or her)).

Also, please don’t assume that we will be posting everything that you need to know about current developments in employment law. Frankly, there will be weeks when we’ll simply be too busy to fiddle with the blog, for which we apologize in advance.

Last of all, the editor for KCNBLAWG is me, Heather White. I’m an associate attorney at KCN and have practiced both labor and employment law for the last four years, in New York and then D.C., since graduating from Tulane Law School. Your emails, should you choose to send us any, will come to me. And most of the time, our blog entries will be posted by me, thus the “HGW” signature.

Any questions? Let us know! And thanks for stopping by. Check with us on Mondays for the latest, and bookmark us if you like what you read - or if you at least find it interesting. You don’t have to like us. You just have to read us.