EEOC ALLEGES THAT HISPANICS WERE FAVORED TO THE DISADVANTAGE OF BLACKS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The case is EEOC v. Paramount Staffing, Inc. (210 U.S. Lexis 49042) decided on May 17, 2010 by Judge John Phipps McCalla of the District Court of the Western District of Tennessee. The issue was Paramount’s challenge to admission by the EEOC of a statistical analysis conducted by Dr. David Sharp. The EEOC contends that Paramount, a temporary staffing company, engaged in a pattern or practice of discrimination by favoring Hispanics over Blacks in its referral of applicants for unskilled labor jobs at Technicolor’s Memphis Oaks facility between 2004 and 2006. Judge McCalla ruled that Dr. Sharp’s analysis is admissible.

Paramount used a 3-day application process in which application forms were completed on day 1. Applicants submitted two forms of ID and agreed to drug tests and a background check. Applicants attended an orientation on day 2, and were referred for temporary work on day 3. Paramount contends that the referral was on a first come basis unless the employer requested special skills. The EEOC contends that Paramount’s on-site managers intentionally excluded blacks.

Dr. Sharp’s estimated that 6,309 out of 15,667 placed applicants (40.3%) were Hispanic as compared to 13.4% in the relevant labor pool. Using an exact binomial test focusing on Hispanics alone, Dr. Sharp found the difference between actual and expected placements was 98.73 standard deviations. It was assumed that few Whites (or other groups) applied for these unskilled jobs. Therefore, over-representation of Hispanics was presumed to imply under-representation of blacks. There was a challenge as to how Dr. Sharp defined Hispanic representation (he commissioned a “surname analysis” from another expert), but Judge McCalla accepted the analysis based on a surname analysis conducted in a landmark Supreme Court ruling in Castaneda v. Partida (1977) [430 US 482] (a case in which 44% representation of Mexican-Americans in a grand jury pool was deemed discriminatory because the relevant adult Mexican-American population was over 90%).

Interestingly, both parties agreed that applicant flow data, which was lacking in this case, is the best way to compare expected versus actual employment levels. However, if such were available, the EEOC would have an easier road by claiming adverse impact. As it is, the pattern or practice charge permits the plaintiff to simply articulate its own explanation of the presumed statistical disparity (i.e., first come, first serve), forcing the defense to prove otherwise.

This case is not over. The only issue decided was to admit Dr. Sharp’s statistical analysis. We will keep you abreast of any further developments in this case.

WAL-MART SETTLES ANOTHER WAGE & HOUR CASE IN OREGON

by Art Gutman Ph.D., Professor, Florida Institute of Technology

Recently, we reported that Wal-Mart agreed to a settlement of up to $86 million dollars for up to 232,000 former employees related to allegations of nonpayment for vacation or personal leave in accordance with California state law after they were terminated. The California settlement occurred on May 11, 2010. On May 21, 2010, Wal-Mart agreed to another settlement, this time under Oregon state law. The Oregon agreement is up to 4.4 million dollars for as many as 28,000 former employees terminated between December 9, 2002 and March 26, 2010. This settlement is for the consolidated cases of Moore v. Wal-Mart (D. Or., 08-CV-48-MO) and Klink v. Wal-Mart (D. Or., 09-CV-3018-MO). The allegations in Oregon were similar to those in California, including non-payment for vacation time, overtime, and straight time, and failure to accurately record and report wages of terminated employees.

TWO RECENT EEOC SETTLEMENTS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

Since early May, the EEOC has announced a dozen or so settlements involving harassment and/or retaliation. These settlements may be viewed at the EEOC newsroom link. I found two of them to be especially interesting. The first one was for $110,000 against Creative Networks, LLC, a provider of services for the disabled. The second one was for $150,000 against Affordable Care, Inc., a national dental services provider. The awards themselves are not huge given EEOC standards, but other features of both settlements are interesting.

The case against Creative Networks is textbook “don’t do” retaliation. One employee (Rhonda Encinas-Castro) filed a claim with the EEOC for discrimination based on race and national origin and another employee (Kathryn Allen) agreed to serve as a witness. Encinas-Castro was terminated and Allen, who had never been disciplined for any violations against the company, was threatened with termination. The retaliation provisions in Section 704(a) in Title VII cite two causes: (1) opposition, which complaining to management or filing a formal charge with the EEOC and (2) participation, which means having “participated in any manner in an investigation, proceeding or hearing.” Thus, Encinas-Castro opposed and Kathryn Allen participated. For present purposes, the case for Kathryn Allen is the more interesting one because it follows directly from Crawford v. Metropolitan Government of Nashville (2009), in which Crawford was terminated for embezzlement after she testified in an internal investigation in a claim of sexual harassment by a fellow employee. The 6th Circuit supported Metropolitan on grounds that Crawford merely participated in an internal investigation, but did not oppose or participate in any claim of harassment or retaliation. The Supreme Court overturned the 6th Circuit in a unanimous ruling. The settlement for Kathryn Allen against Creative Networks has a similar ring.

The case against Affordable Care was based on the actions of a single dentist alleged to have racially harassed one female employee and to have sexually harassed another female employee. It’s rare that a harasser harasses one employee for one reason and another employee for another reason. This was one bad dude. However, that’s not the sole reason this case is interesting. There are two other reasons. First, Affordable Care, based in North Carolina, has 150 affiliated practices in 37 states. Thus, a national company was brought down by the actions of a single employee in an affiliated practice. Second, and perhaps more importantly, the company agreed to create and enforce an anti-harassment policy similar to recommendations in EEOC Policy Guidance 915.002. In particular, the settlement mandates that the company hire an EEO officer to monitor, receive complaints, and provide training.

EEOC STEPS UP WAGE & HOUR CLAIMS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

Recently, we reported two wage & hour cases in which Wal-Mart agreed to a settlement of up to $86 million dollars for up to 232,000 former employees related to allegations of nonpayment for vacation or personal leave in accordance with California state law after they were terminated and a similar claim under Oregon state law for up to 4.4 million dollars for as many as 28,000 former employees terminated between December 9, 2002 and March 26, 2010. Now we learn of two other settlements involving allegations similar to those in Braun v. Wal-Mart (2007) in which a jury awarded nearly $250 million dollars under Pennsylvania State law for violations for overtime violations and failure to honor break times.

In one of the settlements, Charter Communications LLC agreed to pay $18 million to settle a class action lawsuit for failure to pay for a variety of activities they were required to perform before and after their shifts (Goodell v. Charter Communications LLC, W.D. Wis., No. 3:08-CV-00512, preliminary approval 5/20/10). The class consists of 3,627 current and former field technicians who worked for Charter in nine states in 31 different positions. In the other settlement, Boston-area hospitals have agreed to pay $8.5 million to settle allegations that they required employees to work during breaks and before and after their shifts (Woolfson v. Caregroup Inc., D. Mass., No. 09-cv-11464-JLT, preliminary approval 6/1/10). It’s interesting how many of these types of settlements are beginning to emerge in the wake of the 9th Circuit en banc ruling in Dukes v. Wal-Mart (2010) [603 F.3d 571].

ATTRACTION NOT NECESSARY TO SHOW SEXUAL HARASSMENT

by Art Gutman Ph.D., Professor, Florida Institute of Technology

On June 2, 2010, the 1st Circuit overturned a district court ruling of summary judgment for the defense in a sexual harassment case (Rosario v. Department of Army (010 U.S. App. LEXIS 11149)). There were two interesting issues in this case. First, there was no question that Ivan Arroyo, a supervisor, harassed Ruth Rosario; Rosario documented a pattern of “long-standing harassment that interfered with her work on a daily basis and ultimately caused harm to her emotional stability and health.” However, the defense argued that there was no “sexual desire” because Arroyo was not sexually attracted to Rosario. Second, the defense argued there was no discrimination because Arroyo was equally as offensive to men as he was to women (i.e., “equal opportunity harassment”). The district court accepted both arguments and ruled for the Army.

On appeal, 1st Circuit Court Judge Lipez rejected both arguments. Interpreting Justice Scalia’s ruling in Oncale v. Sundowner (1998), a same-sex harassment case, Judge Lipez ruled that proof of sexual desire in not required to prove hostile sexual harassment. Accordingly:

Harassing conduct need not be motivated by sexual desire to support an inference of discrimination on the basis of sex ….. Although other cases may present more explicit evidence of sex-based motivation ….. the record here contains ample circumstantial evidence for a jury to conclude that Arroyo's behavior was triggered by Rosario's gender.

Judge Lipez also rejected the “equal opportunity harassment” argument. Accordingly:

The evidence does not show any male employee enduring Arroyo's criticism and offensive behaviors on virtually a daily basis for an extended period of time, as did Rosario. The record as a whole would thus permit a reasonable jury to conclude that Rosario was exposed to harassment that differed in both kind and degree from that imposed on male employees

The case now goes to trial unless, of course, the parties settle.

SINGLE “PRANK” INSUFFICIENT FOR SAME-SEX HARASSMENT

by Art Gutman Ph.D., Professor, Florida Institute of Technology

On May 20, 2010, Judge Christopher A. Nuechterlein of the Northern District of Indiana ruled that a single prank in which one firefighter rubbed his groin on a colleague’s arm did not constitute same-sex harassment. (Banacki v. South Bend Fire Dep't, N.D. Ind., 2010 U.S. Dist. LEXIS 50186). The judge ruled that a single incident was not sufficiently severe or pervasive to create a hostile work environment. The judge also ruled that because it was a prank, there was no evidence of a violation “because of sex.” The ruling leaves me wondering what would happen if Banacki would have experienced a steady diet of “pranks” sufficient to interfere with his ability to do his job. Such actions would be pervasive; would they also fail the “because of sex” standard? This is a major loophole in same-sex harassment cases. The interested reader should compare the ruling in Rene v. MGM Grand Hotel (2001) [(CA9 2001) 243 F.3d 1206], in which the 4th Circuit rejected a “horseplay” defense to same-sex harassment to McCown v. St. John’s Health System (2003) [(CA8 2003) 349 F.3d 540], in which the DC Circuit accepted this defense even though the actions in both cases were clearly severe and/or pervasive.

MINNESOTA DOC’S “AGE 55 CLIFF” VIOLATES THE ADEA

by Art Gutman Ph.D., Professor, Florida Institute of Technology

On June 4, 2010, Minnesota District Court Judge Paul A. Magnuson ordered the Minnesota DOC to pay $724,000 to 35 retirees, as well as insurance premiums for dental and medical coverage until the retirees reach age 65. The DOC had previously negotiated collective bargaining agreements (CBAs) with its unions in the 1980s that included a so-called “age 55 cliff.” Under the agreement, employees who retired within the pay period in which they turned 55 received continued state contributions to their medical and dental insurance policies, where as those retiring afterwards would not. The DOC argued that the CBAs were legal in light of the Supreme Court’s ruling in Kentucky Retirement System v. EEOC (2008) [128 S. Ct. 2361].

The Kentucky case featured a pension disability plan in which “hazardous position” workers (e.g., policemen) were eligible for normal retirement benefits after 20 years service or after working 5 years upon reaching age 55. However, years were added for disabled workers to total 20, or number of years needed to reach age 55. The plaintiff in this case (Charles Lickteig) was disabled at age 61, and therefore, no years were added to his pension. The Supreme Court ruling was controversial, as five justices supported the plan because years of service is merely “correlated with age”, whereas four justices dissented on grounds that the plan was facially discriminatory. Judge Magnuson ruled that the Minnesota DOC “age 55 cliff” was facially discriminatory, and therefore, illegal under the ADEA.

OFCCP SETTLES HIRING CASE WITH THE WACKENHUT CORP. FOR $290,000

OFCCP News Release: [06/09/2010]
Contact Name: Rich Kulczewski
Phone Number: (303) 844-1302
Release Number: 10-0736-DEN

US Department of Labor settles hiring discrimination case with The Wackenhut Corp. in Aurora, Colo.

Company agrees to pay $290,000 to 446 African-American job applicants

DENVER — The U.S. Department of Labor's Office of Federal Contract Compliance Programs has announced that The Wackenhut Corp., doing business as G4S Wackenhut, has entered into a consent decree to settle findings of hiring discrimination at its Aurora, Colo., facility. The consent decree settles OFCCP's allegations that Wackenhut engaged in hiring discrimination against 446 rejected African-American applicants for the position of traditional security officer for a two-year period. Wackenhut is headquartered in Palm Beach Gardens, Fla.

"The department is committed to ensuring that federal contractors and subcontractors hire, promote and compensate their employees fairly, without respect to their race, gender, ethnicity, disability, religion or veteran status," said Patricia A. Shiu, director of OFCCP, who is based in Washington, D.C. "This settlement of $290,000 in back pay on behalf of 446 African-Americans should put all federal contractors on notice that the Labor Department is serious about eliminating systemic discrimination."

OFCCP investigators found that the company engaged in hiring discrimination against African-Americans from Jan. 1, 2002, through Dec. 31, 2003. Under the terms of the consent decree and order, filed with the U.S. Department of Labor's Office of Administrative Law Judges, Wackenhut will pay a total of $290,000 in back pay and interest to the 446 rejected African-American applicants and will hire 41 of the applicants into traditional security officer positions. The company also agreed to undertake extensive self-monitoring measures to ensure that all hiring practices fully comply with the law and will immediately correct any discriminatory practice. In addition, Wackenhut will ensure compliance with Executive Order 11246 recordkeeping requirements.

"We strongly encourage other employers to take proactive steps to come into compliance with the law to prevent workplace discrimination," said Melissa Speer, OFCCP acting director of OFCCP's Southwest and Rocky Mountain Regions, who is located in Dallas.

OFCCP, an agency of the U.S. Department of Labor, enforces Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 that prohibit employment discrimination by federal contractors. The agency monitors federal contractors to ensure that they provide equal employment opportunities without regard to race, gender, color, religion, national origin, disability or veteran status.

http://www.dol.gov/opa/media/press/ofccp/ofccp20100736.htm