Articles Posted in Labor & Employment Law

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Under the Civil Service Reform Act, the Merit Systems Protection Board (MSPB) has the power to review certain personnel actions against federal employees. If an employee asserts rights under the CSRA only, MSPB decisions are subject to judicial review exclusively in the Federal Circuit, 5 U.S.C. 7703(b)(1). If the employee invokes only federal antidiscrimination law, the proper forum is federal district court. An employee who complains of a serious adverse employment action and attributes the action, in whole or in part, to bias based on race, gender, age, or disability brings a “mixed case.” When the MSPB dismisses a mixed case on the merits or on procedural grounds, review authority lies in district court, not the Federal Circuit. Perry received notice that he would be terminated from his Census Bureau employment for spotty attendance. Perry agreed to early retirement. The settlement required Perry to dismiss discrimination claims he had filed separately with the EEOC. After retiring, Perry appealed to the MSPB, alleging discrimination based on race, age, and disability, and retaliation for his discrimination complaints. He claimed the settlement had been coerced. Presuming Perry’s retirement to be voluntary, an ALJ dismissed his case for lack of jurisdiction. The MSPB affirmed, stating that Perry could seek review in the Federal Circuit. Perry instead sought review in the D.C. Circuit, which transferred the case to the Federal Circuit. The Supreme Court reversed. The proper review forum when the MSPB dismisses a mixed case on jurisdictional grounds is district court. A nonfrivolous claim that an agency action appealable to the MSPB violates an antidiscrimination statute listed in section 7702(a)(1) suffices to establish district court jurisdiction. Had Congress wanted to bifurcate judicial review, sending merits and procedural decisions to district court and jurisdictional dismissals to the Federal Circuit, it could have said so. View "Perry v. Merit Systems Protection Board" on Justia Law

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Ochoa worked in a physically demanding job for McLane, which requires new employees in such positions and those returning from medical leave to take a physical evaluation. When Ochoa returned from three months of maternity leave, she failed the evaluation three times and was fired. She filed a sex discrimination charge under Title VII of the Civil Rights Act. The Equal Employment Opportunity (EEOC) began an investigation, but McLane declined its request for names, Social Security numbers, addresses, and telephone numbers of employees asked to take the evaluation. After the EEOC expanded the investigation’s scope, it issued subpoenas under 42 U.S.C. 2000e–9, requesting information relating to its new investigation. The district judge declined to enforce the subpoenas. The Ninth Circuit reversed, holding that the lower court erred in finding the information irrelevant. The Supreme Court vacated. A district court’s decision whether to enforce or quash an EEOC subpoena should be reviewed for abuse of discretion, not de novo. The Court noted “the longstanding practice of the courts of appeals," to review a district court’s decision to enforce or quash an administrative subpoena for abuse of discretion. In most cases, the enforcement decision will turn either on whether the evidence sought is relevant to the specific charge or whether the subpoena is unduly burdensome under the circumstances. Both tasks are well suited to a district judge’s expertise. Deferential review “streamline[s] the litigation process by freeing appellate courts from the duty of reweighing evidence and reconsidering facts already weighed and considered by the district court,” something particularly important in a proceeding designed only to facilitate the EEOC’s investigation. Not every decision touching on the Fourth Amendment is subject to searching review. View "McLane Co. v. Equal Employment Opportunity Commission" on Justia Law

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Jevic filed for Chapter 11 bankruptcy after its purchase in a leveraged buyout. Former Jevic drivers were awarded a judgment for violations of state and federal Worker Adjustment and Retraining Notification (WARN) Acts, part of which was a priority wage claim under 11 U.S.C. 507(a)(4), entitling them to payment ahead of general unsecured claims. In another suit, a court-authorized committee representing unsecured creditors sued Sun Capital and CIT for fraudulent conveyance in the buyout; the parties negotiated a structured dismissal of Jevic’s bankruptcy, under which the drivers would receive nothing on their WARN claims, but lower-priority general unsecured creditors would be paid. The Bankruptcy Court reasoned that the proposed payouts would occur under a structured dismissal rather than an approved plan, so failure to follow ordinary priority rules did not bar approval. The district court and Third Circuit affirmed. The Supreme Court reversed. The drivers have standing, having “suffered an injury in fact,” or “likely to be redressed by a favorable judicial decision.” A settlement that respects ordinary priorities remains a reasonable possibility and the fraudulent-conveyance claim could have litigation value. Bankruptcy courts may not approve structured dismissals that provide for distributions that do not follow ordinary priority rules without the consent of affected creditors. Section 349(b), which permits a bankruptcy judge, “for cause, [to] orde[r] otherwise,” gives courts flexibility to protect reliance interests, not to make general end-of-case distributions that would be impermissible in a Chapter 11 plan or Chapter 7 liquidation. Here, the priority-violating distribution is attached to a final disposition and does not preserve the debtor as a going concern, nor make the disfavored creditors better off, promote the possibility of a confirmable plan, help to restore the status quo ante, or protect reliance interests. There is no “rare case” exception, permitting courts to disregard priority in structured dismissals for “sufficient reasons.” View "Czyzewski v. Jevic Holding Corp. " on Justia Law

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The Fair Labor Standards Act (FLSA) requires employers to pay overtime compensation to covered employees who work more than 40 hours in a week; a 1966 exemption covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership, 29 U.S.C. 213(b)(10)(A). In 1970, the Department of Labor defined “salesman” to mean “an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles . . . which the establishment is primarily engaged in selling.” The regulation excluded service advisors, who sell repair and maintenance services but not vehicles, from the exemption. Several courts rejected that exclusion. In 1978, the Department changed its position, stating that service advisors could be exempt. In 1987, the Department confirmed its new interpretation, amending its Field Operations Handbook. In 2011, the Department issued a final rule that followed the original 1970 regulation and interpreted the statutory term “salesman” to mean only an employee who sells vehicles. The Ninth Circuit reversed dismissal of a suit by service advisors, alleging violation of the FLSA by failing to pay overtime compensation. The Supreme Court vacated. Section 213(b)(10)(A) must be construed without placing controlling weight on the 2011 regulation. Chevron deference is not warranted where the regulation is “procedurally defective.” An agency must give adequate reasons for its decisions. An “[u]nexplained inconsistency” in agency policy is “a reason for holding an interpretation to be an arbitrary and capricious change from agency practice,” not entitled to deference. The 2011 regulation was issued without the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests. View "Encino Motorcars, LLC v. Navarro" on Justia Law

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Green complained to his employer, the U.S. Postal Service, that he was denied a promotion because he was black. His supervisors then accused him of the crime of intentionally delaying the mail. In a 2009 agreement, USPS agreed not to pursue criminal charges. Green agreed either to retire or to accept another position in a remote location. Green chose to retire. In 2010, 41 days after resigning and 96 days after signing the agreement, Green reported an unlawful constructive discharge to the EEOC under Title VII of the Civil Rights Act., 42 U.S.C. 2000e Green eventually filed suit, which was dismissed as untimely because he had not contacted EEOC within 45 days of the “matter alleged to be discriminatory.” The Tenth Circuit affirmed. The Supreme Court vacated. Because part of the “matter alleged to be discriminatory” in a constructive-discharge claim is an employee’s resignation, the 45-day limitations period begins running after an employee resigns. Resignation is part of the “complete and present cause of action” in a constructive-discharge claim, which requires: discriminatory conduct such that a reasonable employee would have felt compelled to resign and actual resignation. Nothing in Title VII or the regulation suggests an exception to the rule. Starting the clock before a plaintiff can file suit would not further the limitations period’s goals and would negate Title VII’s remedial structure. View "Green v. Brennan" on Justia Law

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CRST trucking company requires its drivers to graduate from its training program before becoming certified drivers. In 2005, new driver Starke filed an EEOC charge, alleging that she was sexually harassed by male trainers during her training (42 U.S.C. 2000e–5(b)).The Commission ultimately informed CRST that it had found reasonable cause to believe that CRST subjected Starke and “a class of employees and prospective employees to sexual harassment.” In 2007, having determined that conciliation had failed, the Commission filed suit. During discovery, the Commission identified over 250 allegedly aggrieved women. The district court dismissed, held that CRST was a prevailing party, and awarded the company over $4 million in fees. The Eighth Circuit reversed the dismissal of two claims and vacated the award. On remand, the Commission settled Starke’s claim and withdrew the other. The district court again awarded more than $4 million, finding that CRST had prevailed on more than 150 claims because of the Commission’s failure to satisfy pre-suit requirements. The Eighth Circuit reversed, stating that dismissal was not a ruling on the merits. A unanimous Supreme Court vacated. A favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party. A plaintiff seeks a material alteration in the legal relationship between the parties; a defendant seeks to prevent that alteration, and that objective is fulfilled whenever the plaintiff ’s challenge is rebuffed, irrespective of the precise reason for the decision. Title VII’s fee-shifting statute allows prevailing defendants to recover whenever the plaintiff ’s “claim was frivolous, unreasonable, or groundless.” Congress must have intended that a defendant could recover fees expended in such litigation when the case is resolved in the defendant’s favor, whether on the merits or not. View "CRST Van Expedited, Inc. v. Equal Employment Opportunity Comm'n" on Justia Law

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The Paterson, New Jersey, chief of police and Officer Heffernan’s supervisor were appointed by Paterson’s incumbent mayor, who was running for re-election against Heffernan's friend, Spagnola. Heffernan was not involved in Spagnola’s campaign. As a favor to his bed-ridden mother, Heffernan delivered her Spagnola campaign yard sign. Other officers reported seeing Heffernan at a Spagnola distribution point while holding that sign. The next day, Heffernan’s supervisors demoted him from detective to patrol officer as punishment for “overt involvement” in Spagnola’s campaign. Heffernan filed suit under 42 U.S.C. 1983. Affirming the district court, the Third Circuit concluded that Heffernan’s claim was actionable under Section 1983 only if his employer’s action was prompted by Heffernan’s actual, rather than his perceived, exercise of free-speech rights. The Supreme Court reversed. When an employer demotes an employee out of a desire to prevent the employee from engaging in protected political activity, the employee is entitled to challenge that unlawful action under the First Amendment and Section 1983 even if the employer’s actions are based on a factual mistake. An employer’s motive, and the facts as the employer reasonably understood them, matter in determining violation of the First Amendment. The harm— discouraging employees from engaging in protected speech or association—is the same, regardless of factual mistake. The lower courts should decide whether the employer may have acted under a neutral policy prohibiting police officers from overt involvement in any political campaign and whether such a policy would comply with constitutional standards. View "Heffernan v. City of Paterson" on Justia Law

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Tyson employees working in the kill, cut, and retrim departments of an Iowa pork processing plant are required them to wear protective gear. The exact composition of the gear depends on the tasks a worker performs on a given day. Tyson compensated some, but not all, employees for donning and doffing, and did not record the time each employee spent on those activities. Employees sued under the Fair Labor Standards Act (FLSA) and an Iowa wage law. They sought certification of their state claims as a class action under FRCP 23 and of their FLSA claims as a “collective action,” 29 U.S.C. 216. The court concluded that common questions, such as whether donning and doffing were compensable, were susceptible to classwide resolution even if not all of the workers wore the same gear. To show that they each worked more than 40 hours a week, inclusive of time spent donning and doffing, the employees primarily relied on a study performed by an industrial relations expert, Dr. Mericle. He conducted videotaped observations analyzing how long various donning and doffing activities took, averaged the time, and produced an estimate of 18 minutes a day for the cut and retrim departments and 21.25 minutes for the kill department. These estimates were added to the timesheets of each employee. The jury awarded about $2.9 million. The Eighth Circuit and Supreme Court affirmed. The most significant question common to the class is whether donning and doffing is compensable under FLSA. Because a representative sample may be the only feasible way to establish liability, it cannot be deemed improper merely because the claim was brought on behalf of a class. Each class member could have relied on the Mericle sample to establish liability had each brought an individual action. View "Tyson Foods, Inc. v. Bouaphakeo" on Justia Law

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Abercrombie refused to hire Elauf, a practicing Muslim, because the headscarf that she wore pursuant to her religious obligations conflicted with Abercrombie’s employee dress policy. The Equal Employment Opportunity Commission (EEOC) filed suit, alleging violation of Title VII of the Civil Rights Act of 1964, which prohibits a prospective employer from refusing to hire an applicant because of the applicant’s religious practice when the practice could be accommodated without undue hardship. The EEOC prevailed in the district court. The Tenth Circuit reversed, holding that failure-to-accommodate liability attaches only when the applicant provides the employer with actual knowledge of his need for an accommodation. The Supreme Court reversed and remanded. Title VII’s disparate-treatment provision requires Elauf to show that Abercrombie “fail[ed] . . . to hire” her “because of ” “[her] religion” (including a religious practice), 42 U.S.C. 2000e–2(a)(1). Rather than imposing a knowledge standard, the statute prohibits certain motives, regardless of the state of the actor’s knowledge. An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions. Title VII allows failure-to-accommodate challenges to be brought as disparate-treatment claims and gives favored treatment to religious practices, rather than demanding that religious practices be treated no worse than other practices. View "Equal Emp't Opportunity Comm'n v. Abercrombie & Fitch Stores, Inc." on Justia Law

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Before suing for employment discrimination under Title VII of the Civil Rights Act of 1964, the Equal Employment Opportunity Commission (EEOC) must “endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion,” 42 U. S. C. 2000e–5(b). Nothing said or done during conciliation may be “used as evidence in a subsequent proceeding without written consent of the persons concerned.” After investigating a sex discrimination charge against Mach Mining, EEOC determined that reasonable cause existed to believe that the company had engaged in unlawful hiring practices and invited the parties to participate in informal conciliation. A year later, EEOC sent Mach another letter stating that conciliation efforts had been unsuccessful, then filed suit. Mach alleged that EEOC had not attempted to conciliate in good faith. The Seventh Circuit held that EEOC’s statutory conciliation obligation was unreviewable. The Supreme Court vacated, noting a “strong presumption” that Congress means to allow judicial review of administrative action. EEOC’s argument that review is limited to checking the facial validity of its two letters falls short of Title VII’s demands; the aim of judicial review is to verify that the EEOC actually tried to conciliate. The Court rejected Mach’s proposal for specific requirements or a code of conduct as conflicting with the wide latitude Congress gave EEOC and with Title VII’s confidentiality protections. A sworn affidavit from EEOC that it informed the employer about the specific discrimination allegation and tried to engage the employer in a discussion to give the employer a chance to remedy the allegedly discriminatory practice should suffice. Should the employer present concrete evidence that the EEOC did not provide the requisite information or attempt to engage in conciliation, a court must conduct the fact-finding necessary to resolve that limited dispute. View "Mach Mining, LLC v. Equal Emp't Opportunity Comm'n" on Justia Law