As the first quarter of 1998 comes to a close, we offer a look back at significant decisions in the area of labor and employment law issued by the United States Supreme Court. We will also discuss two important cases handed down in early 1998 and take a look at some significant cases pending presently before the Supreme Court.
I. The Recent Past
II. The Present
III. The Future: Harassment in the Workplace and Arbitration Clauses in Collective Bargaining Agreements
I. The Recent Past
From an employer's perspective, 1997 was an uneventful year for the Supreme Court. The decision of most interest, however, Robinson v. Shell Oil Company, 117 S. Ct. 843 (1997), leaves employers vulnerable to potential EEO claims by former employees for retaliation.
In Robinson, Shell fired an employee, who promptly filed a discrimination claim with the Equal Employment Opportunity Commission. While that charge was still pending, the fired employee applied for another job, and that employer called Shell for a reference. The former employee then filed a second discrimination charge, claiming Shell gave a negative reference in retaliation for the first discrimination claim that the former employee filed. The Fourth Circuit dismissed the claim, deciding that Title VII did not allow former employees to bring claims against their employers.
Just when employers thought they were safe, the Supreme Court reversed the Fourth Circuit's decision. After a lengthy discussion of why the word "employee" is ambiguous in the context of retaliation under Title VII, Justice Thomas concluded that allowing former employees to file retaliation claims is consistent with the protections afforded by the statute.
Thus, employers have to be doubly careful when giving out references. Not only might their words reap old-fashioned defamation claims, if an employee challenges the termination based on discrimination, employers giving out negative references also might face a retaliation charge as well.
II. The Present
Although 1997 resulted in few decisions of interest for employers, the Supreme Court has this year already issued two important decisions, one dealing with same sex sexual harassment and the other discussing the validity of releases under the federal statutes governing age discrimination claims.
Horseplay Now; Pay Later
As anticipated, the Supreme Court decided that sexual harassment claims may be brought pursuant to Title VII of the 1964 Civil Rights Act even when the offender and the victim are the same sex. In Oncale v. Sundowner, No. 96-568, 1998 WL 88039 (U.S. Mar. 4, 1998), a unanimous Court reversed a decision of the U.S. Court of Appeals for the Fifth Circuit which held that claims of same sex sexual harassment are never actionable regardless of the facts of the case.
Sundowner employed Oncale as a roustabout on an all-male rig in the Gulf of Mexico. Oncale's suit alleged that his supervisors and other male workers -- all heterosexual -- sexually assaulted him, battered him, touched him inappropriately, and threatened him with rape. The three men accused of these activities maintained that no harassment occurred and portrayed their conduct as sexually-oriented hazing or locker-room horseplay. Oncale claimed that he repeatedly complained to the highest ranking employee on the rig but was told that the conditions would not change.
Writing for the Court, Justice Scalia found that "Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at discrimination because of sex. The critical issue . . . is whether the members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed." Justice Scalia further explained that the plaintiff in a same sex sexual harassment case is not required to prove that the harasser is homosexual, as the prohibition against such harassment "forbids only behavior so objectively offensive as to alter the conditions of the victim's employment." The sexual proclivity of the harasser is of no consequence.
The Supreme Court's decision allows Oncale to take his suit to a jury, but does not ensure victory. Although this case was watched closely by American businesses, most employers already have policies in place prohibiting all forms of sexual harassment at work, and those who do not should implement such a policy.
Please Release Me: Supreme Court Rejects Tender Back Requirement
Resolving a conflict among the federal circuit courts of appeals, the United States Supreme Court in Oubre v. Entergy Operations, Inc., 118 S. Ct. 838 (1998), recently held that a release of claims under the Age Discrimination in Employment Act (ADEA) which fails to comply with the requirements of the Older Worker's Benefit Protection Act (OWBPA) does not bar an employee's subsequent ADEA claim, even where the employee fails to return (or offer to return) the monies received for executing the release. The OWBPA sets the necessary standards for obtaining an effective waiver of claims under ADEA.
After executing a release and receiving over $6,000 in severance pay, the plaintiff in Oubre filed an age discrimination action under ADEA, claiming that she was constructively discharged from her employment with defendant because of her age.
However, before filing her lawsuit, the plaintiff did not tender back or return the severance payments that she received in exchange for her release of claims. In allowing plaintiff's case to proceed, the Supreme Court ruled that a waiver not meeting the specific requirements of the OWBPA is void and cannot be ratified by an employee's retention of monies received for giving the invalid release. The Court concluded that any other decision would defeat Congress' purpose in enacting the OWBPA which was to mandate satisfaction of certain minimum requirements to show that a release of age discrimination claims was indeed voluntary. Moreover, the Court justified its decision on practical grounds as well, noting that often the discharged employee will have already spent the monies received from his employer and will thus lack the ability to tender back the funds as a prerequisite to filing suit. The Court felt that this potential scenario could provide an incentive for employers to ignore the requirements of the OWBPA knowing that the discharged employee would lack the necessary means to meet any mandated tender back requirements.
The Oubre decision emphasizes the importance of ensuring that any waivers of age discrimination claims satisfy the specific requirements of the OWBPA. However, one issue left open by the Court's decision in Oubre is whether a defective waiver of an ADEA claim is nonetheless an effective bar to the pursuit of other non-ADEA claims where the employee has not tendered back the received funds. Arguably, in such cases, because the OWBPA is limited to age discrimination claims only, ratification of the release by the retention of any severance funds could very well act as a bar to the pursuit of other non-age discrimination claims.
III.The Future: Harassment in the Workplace and Arbitration Clauses in Collective Bargaining Agreements
Life's a Beach
The United States Supreme Court has agreed to review an opinion from the U.S. Court of Appeals for the Eleventh Circuit which will provide the highest court the opportunity to clarify to what degree a supervisor's actions in creating a "hostile work environment" may be imputed to an employer who had no direct knowledge of the actions at issue.
The Supreme Court will be reviewing Faragher v. Boca Raton, 111 F.3d 1530 (11th Cir. 1997), in which the Eleventh Circuit found that the employer, the city of Boca Raton, was not liable for the "hostile work environment" allegedly created by two of plaintiff's supervisors. Plaintiff had worked intermittently as an ocean lifeguard for the city. Federal appeals courts have disagreed over the standards governing employer liability in cases alleging a hostile work environment under Title VII of the Civil Rights Act of 1964. (See Pepper's Labor and Employment Update dated August 1997 for a discussion of the Third Circuit's viewpoint on this issue.)
A decision is expected from the Supreme Court in July 1998. There is no truth to the rumor that the producers of Baywatch have filed a friend of the court brief with the Supreme Court. In the interim, employers should continue to investigate any complaints of harassment and take prompt, remedial action.
No Harm, No Foul?
In another sexual harassment case currently pending before the Supreme Court, the Court will review a Seventh Circuit decision allowing a plaintiff to bring a quid pro quo sexual harassment claim even though she rejected the alleged harasser's advances and did not suffer any tangible adverse employment actions.
In Jansen v. Packaging Corporation of America, 123 F.3d 490 (7th Cir. 1997), heard en banc, the division vice president propositioned Kathleen Ellerth, a former marketing assistant for Burlington Industries, Inc., intimating that she would not be promoted within Burlington Industries unless she submitted to his sexual advances. Ellerth rejected his advances, and, despite her refusal to submit, she continued to do well.
In a decision that blurred the standards for a quid pro quo sexual harassment claim with those of a hostile work environment sexual harassment claim, 10 of 13 appellate judges said that quid pro quo sexual harassment, even if the harasser's threats remained unfulfilled, altered the "terms and conditions" of the harassed employee's employment even when the employee's job situation was not harmed by her refusal. Thus, Ms. Ellerth's quid pro quo claim survived Burlington Industries' Motion for Summary Judgment.
Although not as closely watched as its companion sexual harassment cases, the inclusion of this case on the high Court's docket shows that the Court intends to take a stab at clearing up some of the confusion surrounding how to deal with sexual harassment in the workplace.
I'll See You in Court?
The Supreme Court has decided to tackle the issue of the enforceability of clauses in collective bargaining agreements which provide for the mandatory arbitration of statutory discrimination claims. In Wright v. Universal Maritime Service Corp., 121 F.3d 702 (4th Cir. 1997), the U.S. Court of Appeals for the Fourth Circuit found that an employee subject to a collective bargaining agreement must submit his or her discrimination claim to binding arbitration. Every other circuit that has addressed this issue has held that a plaintiff need not submit his or her statutory discrimination claim to mandatory arbitration as provided in a collective bargaining agreement.
In Wright, plaintiff was working as a longshoreman in South Carolina when he injured his foot and back when he fell off of a freight container. Wright accepted a $250,000 settlement of his workers' compensation claim. Thereafter, he returned to the hiring hall and worked for nine days, but was then notified by four companies that they no longer would hire him contending that he had been certified as fully disabled. Wright disputed their contention. He then consulted his union representative about his rights. The union representative did not file a grievance on Wright's behalf but advised him to sue under the federal disability law, which Wright did in 1996. Shortly thereafter, the Fourth Circuit ruled in a separate case, Austin v. Owens-Brockway Glass Container, 78 F.3d 875 (4th Cir. 1996), that a union's arbitration agreement bars courts from hearing individual discrimination claims filed by employees. Wright offered to submit his claim to arbitration but the employer refused. The district court dismissed Wright's claim and the Fourth Circuit upheld the dismissal.
For employers outside the Fourth Circuit, arbitration provisions in collective bargaining agreements have not provided the safe haven some thought they might. The Supreme Court's decision in Wright should provide guidance on the shelter these clauses do or do not provide.
I. The Recent Past
II. The Present
- Horseplay Now; Pay Later -- Oncale v. Sundowner
- Please Release Me: Supreme Court Rejects Tender Back Requirement
III. The Future: Harassment in the Workplace and Arbitration Clauses in Collective Bargaining Agreements
- Life's a Beach -- Faragher v. Boca Raton
- No Harm, No Foul? -- Jansen v. Packaging Corp. of America
- I'll See You in Court? -- Wright v. Universal Maritime Service Corp.
I. The Recent Past
From an employer's perspective, 1997 was an uneventful year for the Supreme Court. The decision of most interest, however, Robinson v. Shell Oil Company, 117 S. Ct. 843 (1997), leaves employers vulnerable to potential EEO claims by former employees for retaliation.
In Robinson, Shell fired an employee, who promptly filed a discrimination claim with the Equal Employment Opportunity Commission. While that charge was still pending, the fired employee applied for another job, and that employer called Shell for a reference. The former employee then filed a second discrimination charge, claiming Shell gave a negative reference in retaliation for the first discrimination claim that the former employee filed. The Fourth Circuit dismissed the claim, deciding that Title VII did not allow former employees to bring claims against their employers.
Just when employers thought they were safe, the Supreme Court reversed the Fourth Circuit's decision. After a lengthy discussion of why the word "employee" is ambiguous in the context of retaliation under Title VII, Justice Thomas concluded that allowing former employees to file retaliation claims is consistent with the protections afforded by the statute.
Thus, employers have to be doubly careful when giving out references. Not only might their words reap old-fashioned defamation claims, if an employee challenges the termination based on discrimination, employers giving out negative references also might face a retaliation charge as well.
II. The Present
Although 1997 resulted in few decisions of interest for employers, the Supreme Court has this year already issued two important decisions, one dealing with same sex sexual harassment and the other discussing the validity of releases under the federal statutes governing age discrimination claims.
Horseplay Now; Pay Later
As anticipated, the Supreme Court decided that sexual harassment claims may be brought pursuant to Title VII of the 1964 Civil Rights Act even when the offender and the victim are the same sex. In Oncale v. Sundowner, No. 96-568, 1998 WL 88039 (U.S. Mar. 4, 1998), a unanimous Court reversed a decision of the U.S. Court of Appeals for the Fifth Circuit which held that claims of same sex sexual harassment are never actionable regardless of the facts of the case.
Sundowner employed Oncale as a roustabout on an all-male rig in the Gulf of Mexico. Oncale's suit alleged that his supervisors and other male workers -- all heterosexual -- sexually assaulted him, battered him, touched him inappropriately, and threatened him with rape. The three men accused of these activities maintained that no harassment occurred and portrayed their conduct as sexually-oriented hazing or locker-room horseplay. Oncale claimed that he repeatedly complained to the highest ranking employee on the rig but was told that the conditions would not change.
Writing for the Court, Justice Scalia found that "Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at discrimination because of sex. The critical issue . . . is whether the members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed." Justice Scalia further explained that the plaintiff in a same sex sexual harassment case is not required to prove that the harasser is homosexual, as the prohibition against such harassment "forbids only behavior so objectively offensive as to alter the conditions of the victim's employment." The sexual proclivity of the harasser is of no consequence.
The Supreme Court's decision allows Oncale to take his suit to a jury, but does not ensure victory. Although this case was watched closely by American businesses, most employers already have policies in place prohibiting all forms of sexual harassment at work, and those who do not should implement such a policy.
Please Release Me: Supreme Court Rejects Tender Back Requirement
Resolving a conflict among the federal circuit courts of appeals, the United States Supreme Court in Oubre v. Entergy Operations, Inc., 118 S. Ct. 838 (1998), recently held that a release of claims under the Age Discrimination in Employment Act (ADEA) which fails to comply with the requirements of the Older Worker's Benefit Protection Act (OWBPA) does not bar an employee's subsequent ADEA claim, even where the employee fails to return (or offer to return) the monies received for executing the release. The OWBPA sets the necessary standards for obtaining an effective waiver of claims under ADEA.
After executing a release and receiving over $6,000 in severance pay, the plaintiff in Oubre filed an age discrimination action under ADEA, claiming that she was constructively discharged from her employment with defendant because of her age.
However, before filing her lawsuit, the plaintiff did not tender back or return the severance payments that she received in exchange for her release of claims. In allowing plaintiff's case to proceed, the Supreme Court ruled that a waiver not meeting the specific requirements of the OWBPA is void and cannot be ratified by an employee's retention of monies received for giving the invalid release. The Court concluded that any other decision would defeat Congress' purpose in enacting the OWBPA which was to mandate satisfaction of certain minimum requirements to show that a release of age discrimination claims was indeed voluntary. Moreover, the Court justified its decision on practical grounds as well, noting that often the discharged employee will have already spent the monies received from his employer and will thus lack the ability to tender back the funds as a prerequisite to filing suit. The Court felt that this potential scenario could provide an incentive for employers to ignore the requirements of the OWBPA knowing that the discharged employee would lack the necessary means to meet any mandated tender back requirements.
The Oubre decision emphasizes the importance of ensuring that any waivers of age discrimination claims satisfy the specific requirements of the OWBPA. However, one issue left open by the Court's decision in Oubre is whether a defective waiver of an ADEA claim is nonetheless an effective bar to the pursuit of other non-ADEA claims where the employee has not tendered back the received funds. Arguably, in such cases, because the OWBPA is limited to age discrimination claims only, ratification of the release by the retention of any severance funds could very well act as a bar to the pursuit of other non-age discrimination claims.
III.The Future: Harassment in the Workplace and Arbitration Clauses in Collective Bargaining Agreements
Life's a Beach
The United States Supreme Court has agreed to review an opinion from the U.S. Court of Appeals for the Eleventh Circuit which will provide the highest court the opportunity to clarify to what degree a supervisor's actions in creating a "hostile work environment" may be imputed to an employer who had no direct knowledge of the actions at issue.
The Supreme Court will be reviewing Faragher v. Boca Raton, 111 F.3d 1530 (11th Cir. 1997), in which the Eleventh Circuit found that the employer, the city of Boca Raton, was not liable for the "hostile work environment" allegedly created by two of plaintiff's supervisors. Plaintiff had worked intermittently as an ocean lifeguard for the city. Federal appeals courts have disagreed over the standards governing employer liability in cases alleging a hostile work environment under Title VII of the Civil Rights Act of 1964. (See Pepper's Labor and Employment Update dated August 1997 for a discussion of the Third Circuit's viewpoint on this issue.)
A decision is expected from the Supreme Court in July 1998. There is no truth to the rumor that the producers of Baywatch have filed a friend of the court brief with the Supreme Court. In the interim, employers should continue to investigate any complaints of harassment and take prompt, remedial action.
No Harm, No Foul?
In another sexual harassment case currently pending before the Supreme Court, the Court will review a Seventh Circuit decision allowing a plaintiff to bring a quid pro quo sexual harassment claim even though she rejected the alleged harasser's advances and did not suffer any tangible adverse employment actions.
In Jansen v. Packaging Corporation of America, 123 F.3d 490 (7th Cir. 1997), heard en banc, the division vice president propositioned Kathleen Ellerth, a former marketing assistant for Burlington Industries, Inc., intimating that she would not be promoted within Burlington Industries unless she submitted to his sexual advances. Ellerth rejected his advances, and, despite her refusal to submit, she continued to do well.
In a decision that blurred the standards for a quid pro quo sexual harassment claim with those of a hostile work environment sexual harassment claim, 10 of 13 appellate judges said that quid pro quo sexual harassment, even if the harasser's threats remained unfulfilled, altered the "terms and conditions" of the harassed employee's employment even when the employee's job situation was not harmed by her refusal. Thus, Ms. Ellerth's quid pro quo claim survived Burlington Industries' Motion for Summary Judgment.
Although not as closely watched as its companion sexual harassment cases, the inclusion of this case on the high Court's docket shows that the Court intends to take a stab at clearing up some of the confusion surrounding how to deal with sexual harassment in the workplace.
I'll See You in Court?
The Supreme Court has decided to tackle the issue of the enforceability of clauses in collective bargaining agreements which provide for the mandatory arbitration of statutory discrimination claims. In Wright v. Universal Maritime Service Corp., 121 F.3d 702 (4th Cir. 1997), the U.S. Court of Appeals for the Fourth Circuit found that an employee subject to a collective bargaining agreement must submit his or her discrimination claim to binding arbitration. Every other circuit that has addressed this issue has held that a plaintiff need not submit his or her statutory discrimination claim to mandatory arbitration as provided in a collective bargaining agreement.
In Wright, plaintiff was working as a longshoreman in South Carolina when he injured his foot and back when he fell off of a freight container. Wright accepted a $250,000 settlement of his workers' compensation claim. Thereafter, he returned to the hiring hall and worked for nine days, but was then notified by four companies that they no longer would hire him contending that he had been certified as fully disabled. Wright disputed their contention. He then consulted his union representative about his rights. The union representative did not file a grievance on Wright's behalf but advised him to sue under the federal disability law, which Wright did in 1996. Shortly thereafter, the Fourth Circuit ruled in a separate case, Austin v. Owens-Brockway Glass Container, 78 F.3d 875 (4th Cir. 1996), that a union's arbitration agreement bars courts from hearing individual discrimination claims filed by employees. Wright offered to submit his claim to arbitration but the employer refused. The district court dismissed Wright's claim and the Fourth Circuit upheld the dismissal.
For employers outside the Fourth Circuit, arbitration provisions in collective bargaining agreements have not provided the safe haven some thought they might. The Supreme Court's decision in Wright should provide guidance on the shelter these clauses do or do not provide.