Category Archives: Discrimination and Harassment

Why the Racial Discrimination Claim Against Paula Deen Was Dismissed

Celebrity chef Paula Deen recently received significant negative publicity after the transcript of her deposition in a race discrimination case became public, but the court dismissed the race discrimination claim against her anyway.

The fallout for Deen began when she was asked during a deposition if she had used racial epithets in the past and answered “yes, of course.”  After the deposition became public, Deen lost a number of valuable endorsement deals worth millions of dollars.  Despite Deen’s deposition testimony, the United States District Court for the Southern District of Georgia later dismissed the claims for racial discrimination against Deen.

In the lawsuit, a former employee of Deen asserted claims for both sexual harassment and racial discrimination that occurred in the workplace.  Although the plaintiff was white, she alleged that the workplace was a racially discriminatory environment because of bias against African-Americans.

In its order on Deen’s motion to dismiss, the court held that the plaintiff lacked standing to pursue her race discrimination claims against Deen under Title VII of the Civil Rights Act.  Citing the U.S. Supreme Court’s decision in Thompson v. North American Stainless, LP, 131 S.Ct. 863 (2011), the court held that a plaintiff has standing under Title VII if he or she “falls within the zone of interests sought to be protected by the statutory provision whose violation forms the legal basis for [the] complaint.”  If the plaintiff’s interests are only “marginally related to or inconsistent with the purposes implicit in the statute,” then the plaintiff does not have standing to pursue the claim.

The court held that the white plaintiff did not have standing to sue Deen under Title VII.  In support of its holding, the court explained that “[a]t best, Plaintiff is an accidental victim of the alleged racial discrimination.”  The court emphasized that the plaintiff did not allege that racially offensive comments were directed at her or made with the intent to harass her.  In response to the plaintiff’s argument that the discriminatory work environment harmed her ability to have “harmonious working relationships” with African-Americans, the court held that “workplace harmony is not an interest sought to be protected by Title VII.”  The court acknowledged that the plaintiff may have suffered workplace difficulties as a result of the alleged racial harassment, but nevertheless held that she was not within the “zone of interests” protected by Title VII.

The court did not dismiss the plaintiff’s sexual harassment claims, but the parties reached a confidential settlement of the matter last week.

Takeaway:  The Deen case presents the relatively unusual circumstance of a white plaintiff asserting a race discrimination claim based on alleged bias against African-Americans.  Although the claim was dismissed due to lack of standing, a more effective deterrent to liability is for employers to ensure that they have policies and procedures in place to prevent discrimination in the first place.

Iowa Supreme Court Reaffirms Holding that Employees Can Be Fired For Being Too Attractive

On July 12, 2013, the Iowa Supreme Court took the unusual step of issuing a second opinion in a case to reaffirm its holding that it’s legal for an employer to terminate an employee for being too attractive in Iowa.

In December of 2012, the Iowa Supreme Court issued its first opinion in Nelson v. James H. Knight DDS, P.C., and held that a male dentist did not violate the Iowa Civil Rights Act when he terminated a female employee because he viewed her as “an irresistible attraction” and a threat to his marriage.  The decision resulted in a fair amount of publicity and public criticism, much of which emphasized that the Iowa Supreme Court was all male.  The Iowa Supreme Court later granted the Plaintiff’s request for reconsideration, but the outcome did not change.

In its new decision on the case, the Iowa Supreme Court reaffirmed its previous holding and explained that:

Nelson’s arguments warrant serious consideration, but we ultimately think a distinction exists between (1) an isolated employment decision based on personal relations (assuming no coercion or quid pro quo), even if the relations would not have existed if the employee had been of the opposite gender, and (2) a decision based on gender itself. In the former case, the decision is driven entirely by individual feelings and emotions regarding a specific person.  Such a decision is not gender-based, nor is it based on factors that might be a proxy for gender.

. . .

Nelson’s viewpoint would allow any termination decision related to a consensual relationship to be challenged as a discriminatory action because the employee could argue the relationship would not have existed but for her or his gender. This logic would contradict federal caselaw to the effect that adverse employment action stemming from a consensual workplace relationship (absent sexual harassment) is not actionable under Title VII.

It’s important to note the limitations of the Iowa Supreme Court’s holding in this case.  The only question before the Court was whether the employee was terminated because of her gender.  The Plaintiff did not allege quid pro quo or hostile environment sexual harassment.  The Iowa Supreme Court held that even though the termination was motivated by “individual feelings and emotions” towards a specific individual, there was no evidence that the termination was motivated by the Plaintiff’s status as a woman.

Takeaway:  Although there is case law distinguishing legal terminations that are motivated by relationships, feelings, or jealousy from illegal terminations motivated by gender, these kinds of terminations remain risky.  Employers would be wise to seek legal counsel before terminating an employee for being too attractive – even in Iowa.

15-Day Rescission Period For Releases of Claims under the Minnesota Human Rights Act (MHRA)

When obtaining a release of claims from an employee, it’s important for employers to include a 15-day rescission period for the release to be effective under the Minnesota Human Rights Act (MHRA).

The MHRA provides that a waiver or release of claims under the MHRA “may be rescinded within 15 calendar days of its execution” and that the “waiving or releasing party shall be informed in writing of the right to rescind the waiver or release.”  Minn. Stat. § 363A.31, Subd. 2.  To be effective, the rescission must be in writing and delivered to the waived or released party by hand or mail within the 15-day period.

The requirement for a 15-day rescission period has one important exception, however.  The 15-day rescission period is not required for a claim that has been filed with the Minnesota Department of Human Rights, another administrative agency (like the EEOC), or a judicial body.  Therefore, if an employee or former employee has already filed a charge of discrimination or a lawsuit, the 15-day rescission period is not required.

Takeaways:  When requesting a release from an employee or former employee in Minnesota, employers need to make sure that they include the 15-day rescission period – unless the employee or former employee has already filed a charge of discrimination or a lawsuit.

What is the Causation Standard for Title VII Retaliation Claims?

The U.S. Supreme Court recently clarified that but-for causation is necessary for retaliation claims under Title VII of the Civil Rights Act of 1964 in University of Texas Southwestern Medical Center v. Nassar, No. 12-484 (U.S. June 24, 2013).

Title VII prohibits employers from discriminating against applicants or employees on the basis of race, sex, color, religion, or national origin.  See 42 U.S.C. § 2000e-2(a).  The anti-retaliation provision of Title VII prohibits employers from retaliating against an applicant or employee because “he has opposed any practice made an unlawful employment practice by [Title VII], or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under [Title VII].”  See 42 U.S.C. § 2000e-3(a).

In Nassar, the Court held that an employee must prove but-for causation to establish a retaliation claim under Title VII.  This means that the employee must prove that the employment action challenged as retaliatory would not have occurred “but for” the employee’s protected activity.  It is not sufficient to show that retaliatory motive was one of other lawful motives for the challenged employment action.

The requirement of but-for causation for retaliation claims under Title VII is different from the causation standard for discrimination claims under Title VII.  For a discrimination claim, a plaintiff need not prove but-for causation, but instead may prove discrimination based on “mixed motives.”  For a discrimination claim, it suffices for the plaintiff to show that the motive to discriminate was one of the employer’s motives, even if the employer also had other, lawful motives for the decision.  The but-for causation standard that the Nassar Court held applies to retaliation claims makes it more difficult for employees to prove Title VII retaliation than Title VII discrimination.

Takeaways:  The decision in Nassar is good for employers because it applies a higher standard of causation for Title VII retaliation claims than applies to Title VII discrimination claims.  Nonetheless, it remains a good idea for employers to structure their policies and practices to avoid retaliation claims if at all possible.

Can Religious Associations Discriminate On the Basis of Sexual Orientation?

Although the Minnesota Human Rights Act (MHRA) generally prohibits employers from discriminating on the basis of sexual orientation, it also allows certain religious associations and educational institutions to discriminate on the basis of sexual orientation in certain circumstances.

The MHRA includes an exemption for non-profit religious associations, religious corporations, or religious societies, or any institution organized for educational purposes that is operated, supervised, or controlled by a non-profit religious association, religious corporation, or religious society.  The exemption states that nothing in the MHRA prohibits such religious associations or educational institutions from “taking any action with respect to education, employment, housing and real property, or use of facilities . . . in matters relating to sexual orientation.”  Minn. Stat. § 363A.26.

The statute includes an important limitation on this exemption, however.  Specifically, the statute states that it “shall not apply to secular business activities engaged in by the religious association, religious corporation, or religious society, the conduct of which is unrelated to the religious and educational purposes for which it is organized.”

Takeaways:  Religious associations and educational institutions that are controlled by religious associations may discriminate on the basis of sexual orientation in certain circumstances, but must be careful not to discriminate on the basis of sexual orientation with respect to “secular business activities” that are “unrelated to the religious and educational purposes” of the institution.

Discrimination Against Independent Contractors

When a worker in Minnesota experiences sexual harassment or is let go because of their race or other protected class status, generally that person can allege a discrimination claim under the Minnesota Human Rights Act (MHRA).  But what if that worker is an independent contractor rather than an employee?  Does the worker still have a claim under Minnesota law?

The MHRA prohibits an employer from engaging in unfair discriminatory practices.  To bring a claim against an employer, a person must be an employee of the company.  Generally independent contractors are not considered employees.  The MHRA does, however, include independent contractors who are commissioned salespersons within its definition of employee.

Are other independent contractors left without a claim under Minnesota law?  Perhaps not.  The MHRA also prohibits “business discrimination.”  The MHRA provides that it is an unfair discriminatory practice for a business “to intentionally refuse to do business with, to refuse to contract with, or to discriminate in the basic terms, conditions, or performance of the contract because of a person’s race, national origin, color, sex, sexual orientation, or disability, unless the alleged refusal or discrimination is because of a legitimate business purpose.”  Minn. Stat. § 363A.17.

An independent contractor who has contracted with the discriminatory company through a legal entity, such as a limited liability company, will not be able to bring a claim of business discrimination in their personal capacity.  Instead, as determined by the Minnesota Supreme Court, the claim must be brought by the contracting entity.  See  Krueger v. Zeman Construction Co., 781 N.W.2d 858 (Minn. 2010).

Takeaway:  While independent contractors generally may not be able to bring a discrimination claim against an employer under the MHRA, the contractor may have a claim for business discrimination.  Note that certain protected classes, such as age and religion, do not find protection under this part of the MHRA.

Can a Hostile Environment Claim Arise From Conduct Between Employees Outside the Workplace?

Usually not – the recent Gillis v. Wal-Mart case out of Oregon provides a vivid example.

In Gillis, an employee went to see a co-worker’s private gun collection after hours during which the co-worker told her and her husband he could “easily pick them off with a sniper rifle.”  The co-worker was understandably shaken and complained to the employer who responded by transferring her.  The U.S. District Court found that, among other reasons, since the conduct occurred outside the workplace, was not work-related, and didn’t alter the employee’s work conditions, the hostile environment claim failed as a matter of law.

What are the practical implications of this “off-site” factor for employers dealing with hostile environment allegations?  For one thing, the investigation of a hostile environment complaint should carefully reconstruct what, when, and where if an alleged hostile environment claim arises.  Often employees will make claims in conclusory ways and build into their presentation their opinion about how an incident affects working conditions.  But especially when a run-in or exchange between employees occurs off-site, subjective impressions should take second place to the objective facts necessary to establish a valid hostile environment claim.  Factors that an employer should consider include, but are not limited to:

  • Where did the incidents occur?
  • Have they been replicated in the workplace?
  • Were they related to the job?
  • Was a supervisor involved?

Precise questions can make all the difference when an employee’s complaint involves fraternizing after-hours in conditions the employer does not create or control.  When addressing an “off-site” complaint, consider drawing a chronology of the complaint and carefully note what conduct, if any, was on-site and what conduct was off-site.

Of course, troubling allegations, even if they occur off-site and after-hours, will require careful analysis before final disposition and may merit consulting with legal counsel or taking corrective action.  For example, incidents that occur during overnight business travel may be sufficiently work-related to merit employer action.

Takeaways:  After-hour interactions and socializing between employees is commonplace and can certainly give occasion to negative incidents with the potential of a hostile environment complaint.  But as the recent Gillis case out of Oregon illustrates, with the right investigation, an employer may be able to properly determine that what happened at happy hour can stay at happy hour.

EEOC’s Strategic Enforcement Plan: Forewarned is Forearmed!

An employer is more likely to deal with a discrimination claim originating from the EEOC than ever encounter a private civil action alleging discrimination.  That is the basic idea behind the establishment of the EEOC:  to provide a government agency as the first step for judging the merits of employment discrimination claims and guiding employers in order to avoid enforcement problems.  The winnowing effect of EEOC enforcement decisions and the preventative impact of EEOC guidance benefit good employers.  But like any institution, the EEOC’s energies and objectives can wax, wane, and refocus.  Given the renewed federal enforcement initiative of the Obama administration’s second term, what is the EEOC’s focus during the next four years?

Because the EEOC is a public agency, employers get to see the playbook.  The EEOC approved its Strategic Enforcement Plan (“SEP”) for 2013-16 at the end of 2012 and it can be found here.  The EEOC’s SEP focuses on six key areas:

  1. Eliminating barriers in recruitment and hiring;
  2. Protecting immigrant, migrant, and other vulnerable workers;
  3. Addressing emerging and developing employment discrimination issues;
  4. Enforcing equal pay laws;
  5. Preserving access to the legal system; and
  6. Preventing harassment through systemic enforcement and targeted outreach.

The SEP directs the EEOC to take an integrated approach throughout the private, public (state and local), and federal sectors.  Moreover, each EEOC district office must develop a district complement plan for enforcing the SEP locally.  In short, the 2013-16 SEP is very real and will directly affect enforcement actions and employer interaction with the EEOC.

Takeaways:  What does this mean for the typical employer?  Immediate general advice is:  pay attention to hiring obligations, which can be sometimes regarded as very secondary to obligations to current employees; make sure to be responsive to immigrant and vulnerable workers protection; and double-check compensation equity compliance with the Equal Pay Act.  Another important response to this renewed enforcement initiative is to be thorough and prompt in charge responses and compliant with EEOC investigations.  Legal counsel should play a critical role in addressing the real world impact of the EEOC’s 2013-16 Strategic Enforcement Plan.

Is Sexual Harassment Permissible If It Is Directed At Both Male and Female Employees?

No – the Minnesota Supreme Court recently held that sexual harassment need not be directed at the victims because of their gender in order to constitute actionable sexual harassment under the Minnesota Human Rights Act (MHRA).  Equal opportunity offenders may be liable for sexual harassment, too.

In Rasmussen v. Two Harbors Fish Company, several female employees sued their former employer for sexual harassment under the MHRA.  No. A11-2178 (Minn., May 22, 2013).  Among other things, they alleged that their boss, a male, discussed his sex life with them, asked them questions about their sex lives, discussed the size of male genitalia in the workplace, propositioned them for sex, and showed them pornography.  The trial court initially held that this conduct was not sufficiently severe and pervasive to give rise to a sexual harassment claim, in part, because the manager directed his comments at both male and female employees.  The Minnesota Court of Appeals reversed, and the Minnesota Supreme Court affirmed.

In its opinion, the Minnesota Supreme Court explained that a claim for hostile work environment based on gender is a separate and distinct claim from a claim that sexual harassment created a hostile work environment.  This distinction is subtle.  One claim alleges that an employee suffered harassment because of his or her gender.  The other alleges that an employee was subjected to harassment of a sexual nature.  While the gender of the victim may be relevant in the context of determining whether someone was treated differently because of his or her gender, the Court held that it is not relevant in determining whether someone was subjected to sexual harassment.  The fact that the manager “directed inappropriate, sexual comments at both male and female employees, therefore, cannot support the district court’s determination that the conduct was not sufficiently severe or pervasive to constitute actionable sexual harassment.”

Takeaways:  The fact that a manager is sexually harassing both male and female employees in the workplace will not protect an employer from liability under the MHRA.  Instead, it will likely double the employer’s potential exposure.  If an employer wants to reduce potential liability for sexual harassment, it should make clear to all employees, both in policy and in practice, that sexual harassment is strictly prohibited and will not be tolerated.

EEOC Guidelines on Arrest and Conviction Records

As our recent post on “ban the box” legislation indicated, employer use of criminal history records continues to be scrutinized.  In seeking and using such records to screen applicants or take action regarding employees, an employer must be diligent on several levels.

First, an employer must carefully comply with the federal Fair Credit Reporting Act, and any similar state law that is applicable, if the employer uses a third party consumer reporting agency to obtain the criminal history record.  Second, upon properly obtaining the record, the employer must comply with certain procedural safeguards before taking adverse action against an applicant or employee only as a result of information contained in a consumer report.

Many states have laws that limit an employer’s use of criminal history records.  For example, Wisconsin permits an employer to take adverse action only if the conviction offense is substantially related to the employment position at issue.  See Wis. Stat. § 111.335.  Similarly, Minnesota restricts public sector employers from taking action unless the crime conviction directly relates to the employment position.  See Minn. Stat. § 364.03.  Minnesota does not at this time impose similar restrictions on private sector employers.

Nonetheless, Minnesota employers must be mindful of the 2012 EEOC Guidelines regarding use of arrest and conviction records.  These guidelines focus on possible race or national origin discrimination under federal law arising from use of criminal history records.  The EEOC notes that arrest and incarceration rates are markedly higher for persons of color.  In particular, the guidelines state that African American and Hispanic men are arrested at a rate 2 to 3 times the general population.  According to the EEOC, while 1 in 17 Caucasian men are expected to serve prison time in their life, 1 in 6 Hispanic men and 1 in 3 African American men can expect the same fate.

Because of these statistical racial disparities, the EEOC guidelines provide that employers should use caution in taking action based on criminal history records.  The federal agency notes that employers generally should take no action based on an arrest record alone.  When considering conviction records, the EEOC encourages reliance on the three factors set forth by the Eighth Circuit Court of Appeals in Green v. Missouri Pacific Railroad, 523 F.2d 1290, 1293 (8th Cir. 1975):

  • The nature and gravity of the offense or conduct,
  • The time that has passed since the offense or conduct and/or completion of the sentence, and
  • The nature of the job held or sought.

The EEOC guidelines also encourage employers to engage in “individualized assessment” prior to taking any action.  Such assessment consists of providing the applicant or employee notice of the potential adverse action based on their criminal history, allowing the individual an opportunity to respond with pertinent facts, and considering whether the individual’s additional information merits avoiding the adverse action.

Takeaway:  Employers should rarely, if ever, take adverse action based solely on an arrest record.  Further, employers should generally avoid blanket exclusions based on any criminal conviction history, but instead should consider the relevance of the conviction to the job at issue.  Finally, employers should make sure to be aware of, and comply with, any applicable state laws regarding criminal history records, such as the new “ban the box” legislation in Minnesota.

Conflicts of Interest and Marital-Status Discrimination

The Minnesota Court of Appeals published a decision on May 20, 2013 reversing a trial court’s dismissal of a marital-status discrimination claim on a motion for summary judgment.  Aase vs. Wapiti Meadows Community Technologies & Services, Inc., et al., No. A12-1671 (Minn. Ct. App., May 20, 2013).  The plaintiff was employed by a private mental-health and employment counseling firm.  The employer’s main competition in the area was a non-profit organization, whose board consisted of county commissioners.  Both the employer and the non-profit competed for federal funds through the federal Workforce Investment Act.  And, as the Court noted, the relationship between the two was “strained.”

When the plaintiff’s husband was asked to serve on the local workforce-investment board, the employer suspected a conflict-of-interest in violation of its employment policies.  The Court noted that the workforce-investment board was made up of the members of its competitor’s board of directors as well as members of the local community and representatives of local employers.  Not surprisingly, the employer began an investigation and, after the plaintiff refused to discuss certain information concerning her husband, the employer ultimately terminated the plaintiff because of the conflict-of-interest and insubordination.

The plaintiff sued claiming the employer discriminated against her based on her marital status. The Minnesota Human Rights Act prohibits an employer from taking an adverse employment action against an employee because his or her marital status.  Minn. Stat. § 363A.08.  Two years ago, the Minnesota Supreme Court addressed this prohibition and stated that: “it is not necessary that the termination be ‘directed at the institution of marriage’ because the law protects against discrimination ‘on the basis of the identity, situation, actions, or beliefs of a spouse or former spouse.’”  Taylor v. LSI Corp. of Am., 796 N.W.2d 153, 156 (Minn. 2011) (emphasis added).  Against this backdrop, the Court of Appeals in this case addressed whether the employer had a “legitimate, non-discriminatory reason” for terminating the plaintiff.  And, if so, whether the plaintiff introduced sufficient evidence that the employers reason was “pretext” for unlawful discrimination.

The Court of Appeals held that applying the conflict-of-interest policy to the plaintiff’s spouse would not constitute a “legitimate, non-discriminatory” reason for termination because the termination would be based upon the actions of the plaintiff’s spouse.  But, the Court of Appeals agreed that terminating the plaintiff for failing to cooperate in the employer’s investigation would constitute a “legitimate, non-discriminatory” reason for termination.

Although the Court of Appeals agreed that a legitimate reason existed for termination, it was required to examine whether the plaintiff could produce evidence that the employer’s stated reason was not its actual reason for termination.  In doing so, the Court of Appeals noted that the plaintiff had claimed that certain decision-makers favored termination based solely on the conflict-of-interest and that her termination letter stated the reason for termination as “a conflict of interest or potential conflict of interest because of [her] husband serving on the board of [the employers] primary competitor.”  Based upon these allegations, the Court of Appeals reversed the trial court’s decision, holding that the plaintiff presented a genuine issue for trial.

Takeaway: Even appropriate and well-intentioned conflict-of-interest policies can create problems for employers if not properly drafted and applied.  Under Minnesota law, an employer might be held liable for discrimination if it takes an action against an employee based upon the actions of the employee’s spouse, even if those actions possibly create a conflict-of-interest for the employee.  And although the Minnesota Court of Appeals did not find the conflict-of-interest policy to be discriminatory on its own, it called into question how such policies could be applied when it comes to conflicts created by spouses.  Consequently, it will be important for Minnesota employers to have well-drafted conflict-of-interest policies.  More importantly, Minnesota employers should consult counsel before taking action based on a conflict-of-interest policy when the conflict relates to the employee’s spouse.

OFCCP Issues New Directive on Compensation Analysis

On February 28, 2013, the Office of Federal Contract Compliance Programs (OFCCP) rescinded its existing enforcement guidance on compensation standards and issued a new Directive 307 regarding investigation of compensation pay practices.  A copy of the Directive can be found here.

In releasing Directive 307, the OFCCP emphasized that it intends to address compensation issues on a case-by-case basis rather than using a rigid analytical approach.  The OFCCP states that it will review pay discrimination issues based on Title VII principles without relying on inflexible formulas.

Directive 307 will apply to all OFCCP compliance evaluations scheduled on or after February 28, 2013.  Desk audits will begin by conducting preliminary analysis on the compensation data obtained by the OFCCP pursuant to Item 11 of the Scheduling Letter.  Depending on the results of the preliminary analysis, the OFCCP may request individual level employee data from the contractor.

The OFCCP apparently intends to begin a compensation analysis by first comparing large groups of similarly situated employees to determine whether systemic discrimination exists.  The agency may then proceed to analyze a smaller unit or group of employees and, eventually, individual employee situations.  Each audit will be case specific.

Takeaway:  Affirmative action contractors or covered subcontractors should be aware that the OFCCP is taking a new approach to analyzing compensation practices and should anticipate higher agency focus on compensation compliance.

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