House Approves Bill Establishing Federal Collective Bargaining Standards For Police And Firefighters, June 22, 2007
by Eric Paltell
In a significant federal intrusion into state collective bargaining, the United States House of Representatives passed legislation that would create minimum collective bargaining standards for state and local firefighters, police officers, and emergency medical service employees. The Public Safety Employer-Employee Cooperation Act (HR980) passed the House Education and Labor Committee by a vote of 42 to 1 on June 20, 2007.
Under the legislation, minimum standards will be established requiring state and local governments to allow eligible public safety employees to form and join unions, bargain over working conditions, sign legally enforceable labor contracts, and use an impasse resolution procedure. The Federal Labor Relations Authority ("FLRA")will be required, within six months of enactment, to review state collective bargaining laws to see if they meet the minimum standards. States that do not meet the standards would have two years or until the end of the next legislative session, whichever is later, to enact new public safety collective bargaining laws. States that do not establish their own collective bargaining law would be subject to regulations that would be promulgated by the FLRA within one year of the legislation's enactment.
HR980 is an unusual piece of legislation in that it intrudes upon the traditionally local issue of collective bargaining rights for state and local employees. States and local jurisdictions are subject to widely varying fiscal constraints, legal standards, and other limitations that may make compliance with a federally imposed "off the rack" collective bargaining statute difficult or impossible. For this reason, state and local employers need to watch this legislation closely to see whether it will impact their rights and responsibilities under their labor relations laws.
Fourth Circuit Speaks On Title VII Damage Caps, June 21, 2007
by Clifton R. Gray
Under the provisions of 42 U.S.C. § 1981a(b), statutory caps exist that apply to awards for compensatory and punitive damages for a successful Title VII plaintiff. Under the statute, the cap on such damages is $50,000 for an employer "who has more than 14 and fewer than 101 employees in each of 20 or more calendar weeks in the current of preceding year," $100,000 for those employing more than 100 and fewer than 201 employees, $200,000 for those employing more than 200 and fewer than 501 employees, and $300,000 for those employing more than 500 employees. Obviously, the law assumes that the bigger the employer, the larger hit it can take if it ends up on the losing end of a Title VII claim.
The issue of what time period was meant by the phrase "the current or preceding year" was recently addressed by the United States Court of Appeals for the Fourth Circuit in Depaoli v. Vacation Sales Associates, LLC, Nos. 06-1282, 06-2268 (4th Cir. June 12, 2007). Vacation Sales Associates, who lost a Title VII claim alleging retaliation by a former employee, had judgment entered against it as to compensatory and punitive damages in the amount of $200,000. On appeal to the Fourth Circuit, Vacation Sales claimed that it should have only been subject to a $100,000 award for compensatory and punitive damages under the statute, because at the time of the damage award (2006) it employed more than 100 but less than 201 employees in 2005 and 2006. At the time of the actual discriminatory act (2003), however, Vacation Sales had more than 200 but less than 501 employees "in the current or preceding year," which covered 2002 and 2003.
Clearing up any doubt as to what the phrase "current or preceding year" means in regard to the statutory damage caps, the Fourth Circuit held that it refers not to the year when the damages are awarded in a Title VII lawsuit, but instead refers to "the year of the Title VII violation." Thus, the Court held that the $200,000 in compensatory and punitive damages awarded to the plaintiff were proper under the statutory cap, since during the year in which the Title VII violation occurred, Vacation Sales had between 201-500 employees.
Church Organist Can Pursue Discrimination Claim Against Church, June 15, 2007
Title VII prohibits employers from making employment decisions based on race, color, religion, sex or national origin. There are, however, exceptions that apply to employment relationships between religious organizations and employees who perform religious duties. For example, Title VII specifically permits religious organizations to discriminate based on religion. In addition, courts have interpreted the Free Exercise Clause of the First Amendment to prohibit, in general, the application of Title VII’s anti-discrimination provisions to religious organizations making “employment decisions concerning ministers, teachers, and others employee whose duties are integral to the spiritual and pastoral mission of the religious organization.” Montrose Christian School Corp. v. Walsh, 363 Md. 565, 590 (2001), quoting EEOC v. Roman Catholic Diocese of Raleigh, N.C., 213 F.3d 795, 797 (4th Cir. 2000).
The combined effect is that Title VII does not apply at all to certain employment decisions made by religious organizations. This situation is known as the “ministerial exception” to Title VII. It applies to any employee “whose primary duties consist of teaching, spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship.” Rayburn v. General Conf. of Seventh-Day Adventist, 772 F.2d 1164 (4th Cir. 1985).
Recently, in Archdiocese of Washington, et al. v. William T. Moersen, the Court of Appeals of Maryland had the opportunity to review whether the ministerial exception applied to an employee hired as an organist, “[t]o support the Gospel message through the music ministry of Saint Catherine Laboure Church and to encourage the congregation to assume an active part in their musical participation at all liturgical parish functions.” Moersen’s written job duties included building and sustaining congregational song at all liturgies and assisting with planning and selecting the music associated with the worship at liturgies.
The Court ignored the written job description, and relied on evidence of Moersen’s actual performance and characterization of himself as merely an organ player who showed up and played whatever was put in front of him. The Court wrote that if the ministerial exception applied to Moersen, it could just as easily apply to the organ manufacturer, the organ tuner, or the church custodian, all of whom contribute to the church’s ability to maximize participation in religious ritual. The Court found that Moersen did not have a supervisory role, he was not involved in church governance, and he was not directly involved in teaching or spreading the religious faith. Therefore, the ministerial exception did not apply, and Moersen could pursue a discrimination claim.
There was a dissent. The three dissenting judges believed the majority incorrectly ignored Moersen’s written job description and minimized the importance of music in religious services. In his dissent, Judge Harrell wrote that concluding Moersen’s position was ministerial is “compelled by the simple reality that playing the organ for religious services at a Catholic church is an important facilitation of the liturgies in which Moersen participated, [and is] obviously an activity important to the spiritual and pastoral mission of the church.”
NLRB Changes Position on Salts, June 6, 2007
In an unusually employer friendly decision, the NLRB has held that in salting cases it will no longer apply the rebuttable presumption that a worker who was not hired because of his or her union activity would have worked for the employer indefinitely. Oil Capitol Sheet Metal Inc., 349 NLRB No. 118, (May 31, 2007). "Salting" occurs when a union member - typically on the union payroll - goes to work for a nonunion employer precisely with the goal of organizing the company's employees. Past Board decisions held that, in salting cases, the employer had to prove that the salt would not have been hired or would not have remained employed in the normal course of business. Otherwise, the employer would be liable for backpay from the date of discrimination until a valid offer of employment was made.
In Oil Capitol, a 3-2 decision, the NLRB held that in the future the Board’s General Counsel will be required, "as part of his existing burden of proving a reasonable gross backpay amount due, to present affirmative evidence that the salt/discriminatee, if hired, would have worked for the employer for the backpay period claimed in the General Counsel's compliance specification." The dissent (Members Liebman and Walsh) accused the majority of adopting the change "without any party having raised the issue, without the benefit of briefing, and without a sound legal or empirical basis."
EEOC Regulation on Retiree Health Benefits Upheld, June 5, 2007
The Third Circuit has upheld the EEOC’s regulation that exempts employer coordination of Medicare benefits from coverage under the Age Discrimination in Employment Act. AARP v. EEOC, No. 05-4594 (3d Cir. June 4, 2007). The court held that the regulation proposed by EEOC in July 2003 is "reasonable" and "necessary and proper in the public interest," in affirming the district court’s decision to lift an injunction that AARP obtained in 2005 to block implementation of the proposed regulation.
The EEOC rule exempts from the prohibitions of the ADEA "the practice of altering, reducing or eliminating employer-sponsored retiree health benefits when retirees become eligible for Medicare or a State-sponsored retiree health benefits program." When the regulation was on the verge of becoming final in 2005, AARP filed a lawsuit to block its implementation. The District Court for the Eastern District of Pennsylvania to first granted the injunction and found the rule violated the ADEA, but then reconsidered and reversed that decision. The Third Circuit’s decision affirms the reversal and permits the EEOC to now publish the Regulation.
No Good Deed Goes Unpunished, June 4, 2007
According to the Fourth Circuit, never has the old cliché "rung so true" as in the case of Dorn Holland against his former employer, Washington Homes, Inc. Holland, a former sales manager, sued Washington Homes for race discrimination and retaliation after he was terminated for threatening his supervisor. Specifically, Holland told a company vice president that his supervisor was a "crazy bitch" and that he was "gonna show her." This was not the first time he had so angrily vented about his supervisor, and he was ultimately fired for cause on October 30, 2003.
Soon thereafter, Holland applied for unemployment insurance benefits from the Maryland Department of Labor, Licensing and Regulation ("DLLR"). In an effort to help Holland obtain unemployment benefits, Washington Homes stated to the DLLR that he was terminated because of a lack of work, not that he was fired for cause. In addition, the company had recorded his termination date as November 3, rather than the actual date, so that Holland would meet a five- year eligibility requirement to receive his full 401(k) benefits.
After losing on summary judgment in the trial court, Holland appealed to the Fourth Circuit, arguing that the company's stated reasons for his termination to the DLLR was evidence of pretext. The majority of the Fourth Circuit panel instead found that the company was merely trying to be charitable and that Holland had no evidence to "cast doubt" on its reasons for terminating him. The dissent questioned the propriety of crediting Washington Homes' position after it had admittedly lied to the DLLR. In affirming summary judgment, the majority strongly disagreed, stating "The [dissent's] message to employers is clear: Do no favors for those you terminate for cause, for the risk is a Title VII suit and a dissent in the Federal Reporters labeling you 'an admitted liar.'" Because Holland had "no evidence that any reason other than charity contributed to [the company's] report" to the DLLR, there was no dispute of material fact regarding the reasons for his termination that would overcome summary judgment. Holland v. Washington Homes, Inc., No. 06-1309 (4th Cir. May 25, 2007).
Faragher/Ellerth Affirmative Defense Works, June 1, 2007
The Supreme Court has held that an employer has an affirmative defense to a hostile work environment sexual harassment claim if the employer has an effective harassment policy and an employee unreasonably fails to complain to management about alleged harassment. Well, it works. In Tiller v. Fluker, No. 5:05cv00352 (E.D. Ark. May 17, 2007), a former machine operator at a soybean processing plant was barred from proceeding with sexual harassment claims because she complained to co-workers but failed to report the incidents to management. Granting summary judgment for the company, the court held that Tiller "unreasonably delayed" using the company's in-house complaint system for nearly four months.
Pay Discrimination Cases Limited By Supreme Court, June 1, 2007
You can’t possibly have missed the press generated by the Supreme Court’s decision earlier this week in Ledbetter v. Goodyear Tire & Rubber Co., No. 05-1074 (U.S. May 29, 2007). Employee advocacy groups make the ruling sound like the death knell for any pay equity case, suggesting that Congress should intervene as it did in 1991 and overturn the decision with amendments to Title VII. But the case is nowhere near that significant. First, the majority held only that a single pay decision later claimed to be discriminatory must be challenged to the EEOC within 180 days, or 300 days in a deferral state - which nearly all are. Second, the Court did not overturn it’s decision in Bazemore v. Friday, 478 U.S. 385 (1986), which held that a pay policy designed to intentionally discriminate still does create a new violation of law with each pay check issued. Third, and employers take note here, the Equal Pay Act is still in effect, which provides a two and three year (in cases of a willful violation) limitations period. The lesson here: the sky isn’t falling, but employers should be vigilant in making sure their pay practices are equitable because employees may now be more likely to challenge pay decisions early on.
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