Tuesday, July 18, 2017

Third Circuit on Hostile Work Environment (Is one "n-word" enough?)

Last week, the Third Circuit issued a precedential opinion in Castleberry v. STI Group. It's an interesting opinion, on appeal from a dismissal at the pleadings stage, on the legal standard for hostile work environment claims.

One issue is very clear: the correct standard is that the harassment must be severe or pervasive - meaning that either one very severe event or a slew of not-so-serious events may suffice to state a claim (or, presumably, some combination).
Not official use.

At one point, the Court frames the issue as:
Under the correct “severe or pervasive” standard, the parties dispute whether the supervisor’s single use of the “n-word” is adequately “severe” and if one isolated incident is sufficient to state a claim under that standard.
The Court appears to conclude that, yes indeed, one n-word can be enough. Although, the Court notes that "the resolution of that question is context-specific." Also, strangely, that does not appear to be the actual issue presented by the facts.
Here Plaintiffs alleged that their supervisor used a racially charged slur in front of them and their non-African- American coworkers. Within the same breath, the use of this word was accompanied by threats of termination (which ultimately occurred). This constitutes severe conduct that could create a hostile work environment. Moreover, the allegations could satisfy the “pervasive” alternative established by the standard. Plaintiffs alleged that not only did their supervisor make the derogatory comment, but “on several occasions” their sign-in sheets bore racially discriminatory comments and that they were required to do menial tasks while their white colleagues (who were less experienced) were instructed to perform more complex work. Whether these allegations are true and whether they amount to “pervasiveness” are questions to be answered after discovery (for example, after determining how many times racial remarks were scribbled on the sign-in sheets). Plaintiffs have pled a plausible claim of a hostile work environment under either theory—that the harassment was “severe” or “pervasive.”
What if the slur were not accompanied by threats of termination that came to fruition? What if we were at summary judgment instead of the pleadings stage? The Court stops short of holding that one racial slur is always enough - but it came pretty close.

Sidenote: This was a Section 1981 race discrimination in contracts claim - but presumably the same analysis would apply to the more common Title VII discrimination an hostile work environment claims.

Friday, July 7, 2017

PA Supreme Court: Terminated employees do not have the right to view personnel file

Under Pennsylvania's Personnel Files Act:
An employer shall, at reasonable times, upon request of an employee, permit that employee or an agent designated by the employee to inspect his or her own personnel files used to determine his or her own qualifications for employment, promotion, additional compensation, termination or disciplinary action . . . .
43 P.S. § 1322. However, the Act defines "employee" as:
Any person currently employed, laid off with reemployment rights or on leave of absence. The term 'employee' shall not include applicants for employment or any other person.
43 P.S. § 1321 (emphasis added). The text seems to pretty clearly limit the right to view the personnel file to only current employees. Terminated and want to see your file? Tough luck. And, yet, it wasn't that simple.

In 1996, in Beitman v. Penn. Dept. of Labor & Industry, the Commonwealth Court of Pennsylvania held that:
[T]his Court does not interpret the phrase "currently employed" in Section 1 of the Act so stringently as to prohibit an individual from obtaining his or her personnel file when such request is made contemporaneously with termination or within a reasonable time immediately following termination.
Now, maybe it's just me, but I don't consider interpreting "currently employed" to mean somebody who is employed currently as overly stringent . . . that's just reading what the statute actually says. Nevertheless, I advised employers over the years that they probably had to let fired employees see their personnel files. "Ya see, there's this Commonwealth Court case . . . ." I'd say.

Recently, the Supreme Court of Pennsylvania ("SCOPA" - help me make it catch on like "SCOTUS") held in Thomas Jefferson Univ. Hosp. v. Penn. Dept. or Labor & Industry:
Reading the Personnel Files Act according to its plain terms, we conclude that former employees, who were not laid off with re-employment rights and who are not on a leave of absence, have no right to access their personnel files pursuant to the Act, regardless of how quickly following termination they request to do so.
That sounds right to me. A word of caution from the Court though:

[F]ormer employees who believe they have been wrongfully terminated may gain access to their files by filing a lawsuit and seeking the files in discovery.
Furthermore, employers may want to provide fired employees with their personnel files as sort of a "see, there's nothing incriminating in there" to head off litigation.


Thursday, July 6, 2017

DOL finally states its position in overtime regulation litigation

Welp, we finally have the long-awaited reply brief from the Department of Labor in the overtime regulation litigation (HT: Wage & Hour Litigation Blog). What's their position?
The Department has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be. Accordingly, the Department requests that this Court address only the threshold legal question of the Department’s statutory authority to set a salary level, without addressing the specific salary level set by the 2016 final rule . . . . [T]the Department soon will publish a request for information seeking public input on several questions that will aid in the development of a proposal.
That's a tough position for the Court to accept in my opinion. I mean, it's almost like DOL is asking for an advisory opinion . . . don't actually decide the case that's in front of you, just tell us the lower court got the law wrong but don't tell us whether the actual rule that exists right now can go forward.

If the Court accepts the legal reasoning of DOL, then it could very well just lift the injunction. Then what? We have a rule in place that DOL does not support that will only be in place until they can go through the rulemaking process and set a new level? That sounds messy.

Wednesday, June 28, 2017

Not lookin' good for DOL overtime regulation

Sure, I could just wait two days to see what position the Department of Labor (DOL) actually takes. Instead, I'll read minds and predict the future. First, let's make sure everybody's caught up.

Not official use.
Last year, a new DOL overtime regulation (explained here) would have drastically increased the minimum salary threshold for exempt employees (employees who are exempt from the FLSA requirement that employers pay them time-and-a-half for hours worked over 40 in a workweek - "overtime"). At the last minute, a federal district court granted a nationwide injunction putting the rule on hold. That decision is on appeal to the Fifth Circuit Court of Appeals.

While the appeal was pending, we got a new president, Donald Trump. DOL obtained an extension to file their reply brief in the Fifth Circuit case to give them time to figure out what they want to do. The extended deadline is Friday. They could spike the appeal and the rule would be effectively dead. Why do I think that's what they're going to do?

Yesterday, DOL sent a request for information on the overtime rule to the Office of Management and Budget. Why would they be seeking information (and public comment) if they planned on defending the existing rule? It certainly sounds like they're going to let the existing rule die, and come up with something new.

Monday, June 26, 2017

SCOTUS on appeal of MSPB "mixed cases"

Okay, the subtle nuances of the procedural minefield of federal employee discrimination cases is not exactly the kind of SCOTUS blockbuster we usually anticipate at the end of the Court's term . . . but it's what we got.

When federal employees have employment discrimination claims, they may take them to the Equal Employment Opportunity Commission (EEOC). When federal employees suffer certain serious adverse employment actions (like termination) they may take them to the Merit System Protection Board (MSPB). When a federal employee complains that the serious adverse employment action was based on discrimination, (s)he may bring a "mixed case" to the MSPB.

Let's say you have a mixed case, and the MSPB dismisses the case based on jurisdictional grounds. Does the employee appeal to the Federal Circuit or to the federal district court? Or must the employee split the case, and appeal the MSPB jurisdictional ruling to the Federal Circuit and the discrimination claim to the district court?

Is anyone still awake? In Perry v. MSPB, the Supreme Court (per opinion by Justice Ginsburg) held:
[I]n mixed cases . . . in which the employee (or former employee) complains of serious adverse action prompted, in whole or in part, by the employing agency’s violation of federal antidiscrimination laws, the district court is the proper forum for judicial review.
Justice Gorsuch weighed in with his first dissent (joined by Justice Thomas). It was a - to the surprise of no one - a strict, literal, and narrow interpretation of the text of the statutory framework.

Monday, June 19, 2017

Retaliation, "but for" causation, and the prima facie elements

Back in 2013, in UTSMC v. Nassar, the Supreme Court held in no uncertain terms that "Title VII retaliation claims must be proved according to traditional principles of but-for causation." That seems simple enough - but wait, earlier this year the Third Circuit clarified/complicated things a bit.

In Carvalho-Grevious v. Del. St. Univ., the Third Circuit held:
Not official use.
At the prima facie stage, a plaintiff need only proffer evidence sufficient to raise the inference that her engagement in a protected activity was the likely reason for the adverse employment action, not the but-for reason.
Wait, doesn't that conflict with the Supreme Court's decision? Not exactly . . .

As the Third Circuit explained, the "but for" causation standard is the plaintiff's ultimate burden of persuasion. In other words, that's the thing the employee will ultimately have to prove to win the case. Whereas, the prima facie elements ((1) protected activity; (2) adverse action; and (3) causal connection) are just the initial burden of production in a broader burden-shifting framework. So, the bar for establishing the causal connection - and shifting the burden of production, but not persuasion, over to the employer to proffer a legitimate non-retaliatory reason - is the lower "likely reason" standard.

While the Nassar "but for" standard is a blessing for employers at trial, it does not appear to be carrying much weight in the summary judgment context (at least here in the Third Circuit).

Friday, June 9, 2017

Easy come, easy go - DOL pulls independent contractor and joint employer guidance

On Wednesday, the U.S. Department of Labor released the following press release:
Not official use.
U.S. Secretary of Labor Alexander Acosta today announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.
Technically, this does not change the law; however, courts will give some deference even to "informal guidance." As compared to the now-pulled guidance, the Trump administration will most likely:

  • View classification in a way that makes workers more likely to be independent contractors; and
  • Makes putative-employers less likely to be "joint employers."
So far, no specific replacement guidance has been proposed. Also, unlike informal guidance, actual agency decisions have a little more staying power. For example, on NLRA issues, employers are still stuck with the "refined" joint employer standard from Browning-Ferris.