California Labor & Employment Law Blog

By Robin E. Weideman

Today the California Supreme Court issued its decision in Reid v. Google, an age discrimination case decided favorably for Google at the trial court level.  The trial court threw the case out on summary judgment, finding that the plaintiff’s evidence of “stray remarks” by non-decisionmakers and/or unrelated to the decision-making process, was insufficient evidence of discrimination to merit a trial.  The appellate court reversed the order granting Google summary judgment and held that the evidence of stray remarks was admissible and could be considered by the court in finding sufficient evidence of discrimination to deny an employer’s motion for summary judgment.  Today the California Supreme Court agreed and rejected strict application of the stray remarks doctrine in California discrimination cases.  The Court also held that a party’s objections to evidence (lodged in the trial court) are preserved on appeal, even if the trial court does not rule on those objections.  (However, objections that are not specifically ruled upon are deemed presumptively overruled on appeal.)  This post focuses on the decision as relates to the stray remarks doctrine.

Under the stray remarks doctrine, which is widely accepted in federal courts, evidence offered by a plaintiff that a co-worker or a non-decisionmaker made discriminatory remarks is not enough to defeat an employer’s motion for summary judgment.  Thus, by way of example, if a plaintiff is suing for age discrimination and the employer makes a motion for summary judgment, arguing that plaintiff’s termination was the result of poor performance and not any discriminatory motive, the plaintiff may try to defeat summary judgment by presenting evidence that co-workers or a supervisor not involved in the termination decision made ageist comments in the workplace. Under the stray remarks doctrine, such evidence would be considered irrelevant and inadmissible because it is not deemed probative of establishing discriminatory animus on the part of those actually involved in the decision-making process leading to termination.  As such, this type of evidence would not be enough to defeat the employer’s motion for summary judgment.

Today’s decision in Reid v. Google makes it more difficult for California employers to rely on the stray remarks doctrine because the Supreme Court specifically rejected strict application of the doctrine in California discrimination cases.  The Court instead held that evidence of stray remarks is admissible and must be considered along with the totality of the facts and inferences to be drawn from those facts, in determining whether the plaintiff has presented sufficient evidence of discrimination to necessitate a trial on the merits.  On the specific facts of the case before it, the Court held that Reid had presented sufficient evidence of age discrimination to make summary judgment inappropriate for Google.  Notably, Reid presented more than just stray remark evidence.  Reid presented statistical evidence arguably suggesting age discrimination and also presented evidence that Google provided him shifting reasons for the termination decision.  In terms of “stray remarks,” Reid additionally offered evidence that his superiors remarked that he was not a “cultural fit,” that his ideas were “obsolete,” and that he was “slow,” “fuzzy,” “lethargic,” and did not display a “sense of urgency.”  Co-workers allegedly called him an “old man” and “old fuddy duddy” on some occasions.  Although there was a lack of evidence tying any of these alleged remarks to the termination decision itself or to those responsible for making the decision, the Court held that this evidence, combined with other evidence, was admissible and sufficient evidence of discriminatory intent to defeat Google’s motion for summary judgment.  To be clear, however, the Court did not rule that Google discriminated against Reid.  The Court simply held that there was sufficient evidence to proceed to a trial on that issue.

The Reid case is not a positive development for California employers’ ability to win employment discrimination cases on summary judgment.  However, the case should not be misinterpreted as suggesting that stray remarks are, in and of themselves, sufficient evidence to always defeat summary judgment.  Rather, the case simply holds that stray remarks may be considered, along with other evidence, in assessing whether the plaintiff has enough evidence upon which a jury could conclude that discrimination was the motivating factor behind the adverse employment action.
 

By Robin E. Weideman

In Brownfield v. City of Yakima, the Ninth Circuit held that the City did not violate the ADA by requiring a police officer employee to undergo a fitness for duty exam following several incidents of erratic behavior by the employee.  The police officer in question had sustained a head injury causing him to be out of work for some time before being fully released to work.  He returned to duty and worked for three years essentially without incident and received positive performance reviews.  The following year, he had several incidents involving confrontations with co-workers and/or others during which he was visibly angry.  He also told a co-worker he was so angry during a traffic stop that at the time he did not know what he was going to do.  Based on these incidents, the City required the officer to undergo a fitness for duty exam.  The exam resulted in a reported finding that the officer was not fit for police duty due to disability and that the disability was permanent. The officer’s employment was ultimately terminated.  He filed suit for, among other things, violation of the ADA.

The question before the Ninth Circuit was whether the City violated the ADA by requiring the officer to undergo a fitness for duty exam prior to the officer having any real performance problems.  The court held that an employer does not have to wait until an employee’s work performance declines before requiring a fitness for duty exam “if the employer is faced with significant evidence that could cause a reasonable person to inquire as to whether the employee is still capable of performing his job.”  The court cautioned that the employee’s behavior cannot be merely annoying or inefficient.  Rather, there must be objective evidence leading the employer to reasonably believe that the employee may not be capable of performing his job duties.  In this case, the repeated instances of erratic behavior and angry outbursts by the officer were sufficient to lead the City to have such a belief even in the absence of specific performance problems on the part of the officer.

Employers should use caution when requiring “prophylactic” fitness for duty exams of employees. To pass muster under the ADA, a fitness for duty exam must be based on a showing of business necessity and it is always the employer’s burden of proving business necessity.
 

By Brent M. Giddens

In Reeves v. MV Transportation, the California Court of Appeals considered whether an employer's hiring of a 40 year old attorney constituted age discrimination against an unsuccessful 56 year old applicant.  The court considered whether hiring someone with arguably inferior qualifications, combined with the Company's failure to retain and produce the candidate applications, was sufficient to defeat the employer's motion for summary judgment. 

Mr. Reeves, a 56 year old lawyer, applied along with approximately 60 other applicants for a position as a staff attorney with the defendant Company.  The Company chose to hire a 40 year old applicant who possessed what the Company found to be superior qualifications (and which Mr. Reeves believed to be inferior qualifications).  Mr. Reeves was not interviewed.  Unfortunately for the Company, the employment applications of the candidates could not be located, which Mr. Reeves argued presented a triable issue of fact regarding his rejection.  The court found that the Company had presented a legitimate business reason for his rejection (the other applicant was more qualified), so the burden shifted to Mr. Reeves to establish that the Company's reasons were a pretext for age discrimination.   Mr. Reeves argued, in part, that (1) he had superior qualifications, and (2) the Company's inability to produce the applications received constituted sufficient pretext to defeat summary judgment.

Courts generally defer to the legitimate business decisions of employers in determining which applicant is best qualified for the job.  Here, as in most instances, some candidates are stronger in some areas than others.  In this case, Mr. Reeves was found to have superior qualifications in some areas, but the court also found the successful applicant possessed other advantages.  In concluding Mr. Reeves had failed to establish that the Company's reasons were pretextual, it found that his "qualifications cannot be reasonably viewed as 'vastly superior'….[and] were not 'so superior to those of the person selected…as the make the selection of that person unreasonable…."  As for the Company's failure to produce the applications, the court found that this failure alone cannot create an issue of fact sufficient to defeat summary judgment where, as here, there is not substantial evidence of pretext on the merits.

On balance, this case provides yet another in a long line of favorable California decisions upholding the authority of California employers to select who they deem to be the most qualified applicant from the available pool for an open position.  That said, California employers are well advised to carefully weigh and evaluate the inevitably competing qualifications of the candidates and carefully document the reasons for the successful applicant's selection.  Further, California employers should ensure they are complying with record retention requirements (here, 2 years for employment applications under Cal. Gov't Code Section 12946).
 

By Robin E. Weideman

California's Fair Employment and Housing Commission (FEHC) has published proposed regulations concerning California's pregnancy disability leave requirements.  The proposed regulations cover issues such as eligibility for leave, length of leave and minimum increments of leave, reasonable accommodation issues such as job transfers, use of paid time off during leave, and the parameters surrounding the right to reinstatement upon return from leave.   The FEHC is holding public meetings to solicit feedback regarding the proposed regulations on June 1 at 10:00 a.m. in Los Angeles, and on June 2 at 10:00 a.m. in San Francisco.  For details regarding the locations for these two public hearings, click here.   

California employers should review the proposed regulations and consider having a representative attend one of the public hearings to offer feedback on any areas of concern.  Employers may also submit written feedback and comments by email addressed to regs@fehc.ca.gov.  The deadline for submitting written comments is 5:00 p.m. on June 2.

By Ryan McCoy

When the Supreme Court issued its latest batch of opinions on Monday, the focus of legal commentators was primarily on the National Football League's anti-trust loss.  Yet, important to employers was a significant ruling with respect to Title VII disparate impact claims.  In Lewis v. City of Chicago, the high court delved into issues pertaining to the timeliness of EEOC charges under Title VII, and in so doing, gave notice to employers nationwide that what constitutes "timely" may be much longer than originally thought.

Title VII of the Civil Rights Act of 1964 prohibits employers from using employment practices that cause a "disparate impact" on the basis of race and other protected classifications. Before beginning a disparate impact suit under Title VII, a plaintiff must first file a timely EEOC charge. Generally, the EEOC charge is due within 300 days after the alleged unlawful employment practice occurred. At issue in this case was whether the plaintiffs had timely filed an EEOC charge before proceeding to federal court.

In 1995, the City of Chicago went about hiring new firefighters by administering a written examination to over 26,000 applicants.  The examination was designed to sort out the "most qualified" from the "qualified" and "not qualified."  Those scoring in the "most qualified" range would receive priority in hiring decisions, while those "qualified" would remain on a waiting list, and those "not qualified" would be eliminated from consideration.  On this basis, the City selected its first set of applicants for advancement in 1996, and repeated the same process nine more times over the next six years.

In 1997, six African-Americans applicants who had scored in the "qualified" range alleged that the City's practice of selecting for hire only those applicants who had scored in the "most qualified" range caused a disparate impact on African-Americans in violation of Title VII.  Based on these allegations, the district court certified a class consisting of approximately 6,000 African-American applicants.

Prior to trial, the City sought summary judgment on the ground that the applicants had failed to file EEOC charges within 300 days after their claims accrued.  Indeed, the plaintiffs had not filed their EEOC charges until March 1997, which, in the City's view, was not within the 300 days after the City had administered the test in 1995.  The district court disagreed and held that the claims were timely filed. The City appealed to the Seventh Circuit, which reversed and held that the plaintiffs’ claims were untimely.

The Supreme Court granted review to address the issue of timeliness.  In its unanimous opinion, the Court first noted that whether a plaintiff's charge is "timely" requires a precise identification of the "unlawful employment practice" of which he complains.  On this point, the Court found unlawful practices on the part of the City when it excluded passing applicants who scored in the "qualified" range. Both parties agreed that while the initial 1996 hiring process was discriminatory within the meaning of Title VII, this "practice" fell outside the 300-day limitation period. However, the parties hotly contested whether any "new violations" occurred after that date.

The Court held that because the City implemented its practice several times following the initial 1996 hiring process (nine times over the next six years), the applicants were "timely" in filing their EEOC charge; consequently, a "new violation" occurred each and every time the City "implemented [its] decision down the road."  The initial 1996 decision was thus not the only basis for the applicants' claim.

Interestingly, the Court, via Justice Scalia, appeared to recognize the implications of its holding as applied to employers.  Indeed, Justice Scalia echoed the warnings voiced by businesses: that the ready consequence of Lewis will be that "employers may face disparate-impact suits for practices they have used regularly for years," even where there is no evidence of discriminatory intent during the statutory period. Scalia himself even found the language of the statute "puzzling" when applied to this case; nevertheless, ever the strict originalist, he restates that the Court's "charge is to give effect to the law Congress enacted."  Though the Court appears almost reluctant to enforce the statutory language in this instance, he appealed to Congress - and not federal courts - to fix the language if the result in this case was not the result Congress intended.  This ostensibly provides an opportunity for employers: contact your congressional representative and/or trade group as a means to enact this change, for the warnings echoed by the Court may indeed ring true.  As evidenced by last year's controversial Ledbetter case and the subsequent statutory change that it brought about, Congress is willing to enact statutory change where it is convinced the Court has reached a conclusion that Congress did not intend.
 

By Ryan McCoy and Catherine Ngo

Several pieces of employment-related legislation are pending before the California Legislature this 2009-2010 term.  Some of the more noteworthy items are listed and described as follows:

AB 569 (Emmerson) - This bill would specifically exempt construction employees, commercial transportation drivers, and employees in the security services industry from the meal period provisions of Labor Code section 512 provided that the employees are covered by a collective bargaining agreement meeting certain conditions.  Thus, assuming a valid collective bargaining agreement, an employer in the above industries would not be required to provide a meal period to an employee who works more than five hours in a given work day.  The bill was passed by the Assembly 72-2, and currently the bill awaits hearing in the Senate Committee on Labor and Industrial Relations.

This bill is supported by the likes of the United Parcel Service ("UPS"), who has argued that the bill would allow unionized transportation companies to negotiate flexible terms for the timing of meal periods because current law significantly restricts the freedom of drivers to decide for themselves when they can take their meal periods.  Additionally, the Associated General Contractors argued in support of the bill that although many construction companies and their employees operate under a collective bargaining agreement, recent case law has rendered their agreements inoperative because the meal break statutes supersede any such private agreements.  The opposition appears to come primarily from those who believe that the statute should be applied to all industries, instead of just those provided for in the statute.  Of course, it is obvious that more clarity is needed with respect to meal and rest break provisions, and it is hoped that the California Supreme Court provides clarification on this issue in its pending decision in Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum).

AB 2727 (Bradford) - This bill would prohibit an employer from denying an application for employment for the reason that the applicant has previously been convicted of a criminal offense unless the employer determines that a) there is a direct relationship between the prior conviction and the employment sought or b) the granting of employment would involve an unreasonable risk to property or persons.  This is an expansion from current legal prohibitions on consideration of criminal history.  Currently, the bill sits in the Assembly Appropriations Committee awaiting a re-hearing after initially passing the Committee on strict party lines.

According to the author, this bill is intended to codify existing federal EEOC policy into state law. However, this bill is strongly opposed by several groups representing private employers, including the California Chamber of Commerce, all of whom argue the bill goes beyond current EEOC policy.  The Chamber specifically argues that it "increases potential liability exposure for hiring decisions by restricting the ability of employers to make their decision based on a job applicant's criminal conviction."   Furthermore, the bill places yet another unreasonable burden on employers, which must take into account such factors as protection of the public, other employees, and property when making hiring decisions.

AB 2772 (Committee on Labor and Employment) - This bill clarifies that an employer wishing to appeal a Labor Commissioner decision with the superior court must first post a bond in the amount of the judgment rendered in the administrative hearing.  This bill is intended to supersede a California appellate ruling, Progressive Concrete Inc., v. Parker, 136 Cal.App.4th 540, 548 (2006), which held that the bond requirement of Labor Code section 98.2(b) is merely "directory," instead of "mandatory and jurisdictional."  This bill states that the bond is indeed mandatory, and the employer would thus be required to first post a bond with the reviewing court in the full amount of the Decision of Award issued by the Labor Commissioner.  There is no opposition to the bill currently on file.  The bill unanimously passed the Assembly Committee on Labor and Employment, and awaits hearing on the Assembly floor.

AB 2773 (Swanson) - This bill would eliminate current judicial discretion to deny attorneys' fees in a case other than a limited civil case, if the prevailing party recovers a judgment that could have been rendered in a limited civil case.  Thus, this bill would overrule the California Supreme Court in Chavez v. City of Los Angeles, 47 Cal.4th 970 (2010), which held that a trial court has discretion in a FEHA case to deny a successful plaintiff his attorneys' fees when the plaintiff chooses to proceed in an unlimited civil jurisdiction, but recovers less than the jurisdictional minimum.   After passing the Assembly Judiciary Committee on strict party lines, the bill now awaits hearing on the Assembly floor.

While its supporters contend that this bill will make the system more fair and equitable, groups such as the Civil Justice Association of California oppose the bill, arguing that it would "undo a judicial deterrent to filing frivolous lawsuits."  The California Chamber of Commerce has also commented that this bill "unreasonably increases business litigation costs by removing judicial discretion to reduce or eliminate exorbitant legal fees in fair employment and housing cases."

AB 2340 (Monning) - This bill gives California employees the right to take three days of unpaid leave in the event of the death of certain relatives.  More specifically, the bill prohibits an employer discharging, disciplining, or discriminating against an employee for requesting or taking up to three days of bereavement leave upon the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.  The bereavement leave can be taken up to thirteen months following the death, and need not be on consecutive days.  Last week, this bill was passed by the Assembly Appropriations Committee on a 11-5 margin and will now make its way to the Assembly floor.  Notably, similar legislation was vetoed in 2007 by the Governor Schwarzenegger after passing both the Assembly and Senate.

SB 908 (Wyland) - This bill would exempt employers in the armored car industry from the requirement to provide a meal period to their employees.  The bill's author maintains that employees driving armored cars need specific statutory treatment due to both public safety and environmental concerns.  As such, this bill represents another attempt to exempt a specific class of employees from general meal break provisions.  As detailed in previous blog posts, the development of meal and rest break provisions is otherwise in somewhat of a holding pattern due to the looming California Supreme Court decision, Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum).  Currently, this bill awaits hearing in the Senate Committee on Labor and Industrial Relations.

SB 990 (Dutton) - This bill also seeks to clarify meal break laws by making clear that the requirement to "provide" a meal break means "to make the break available."  The bill would also clarify circumstances under which an employee could waive a meal period or agree to an on-duty meal period.  This bill still awaits hearing in the Senate Committee on Labor and Industrial Relations.

SB 1304 (DeSaulnier) - This bill requires private employers to permit employees to take up to 30 days of paid leave for an organ donation and up to five days of paid leave for a bone marrow donation.  The bill also prohibits retaliation against employees who take this leave, and would authorize an employee to bring a civil action to enforce the provisions of this bill.  Though this bill is certainly well-intentioned and designed to encourage organ and bone marrow donations, many groups, including the California Chamber of Commerce, oppose the bill because a new private sector mandate is not the correct policy to advance an otherwise laudable goal.  As small business bankruptcies are at an all-time high in this state, many argue that increasing the cost of doing business in an already costly environment is not a good idea to pursue at this time.  After passing the Senate Judiciary Committee, this bill has been forwarded to the Senate Appropriations Committee.
 

SB 1370 (Ducheny) - This bill requires that employees who are paid by commission are provided with a written contract on the terms and conditions of employment.  Under existing law, contracts must be in writing if 1) the employer has no permanent and fixed place of business in California, 2) the employer is entering into a contract of employment with an employee for services to be rendered within California, and 3) the contemplated method of payment involves commissions. Under this legislation, any and all employment contracts that envision commissions as a form of payment must be in writing, regardless of where the employer is located and/or where the employee's services are to be performed.  This bill was passed by the Senate Committee on Labor and Industrial Relations, and awaits referral to the full Senate.
 

Employers potentially impacted by the foregoing pending legislation may wish to lodge support or opposition through appropriate channels. 

 

By Ryan McCoy

Recently the Ninth Circuit handed down its 140-page opinion in Dukes v. Wal-Mart Stores upholding class certification of a putative class of female employees alleging sex discrimination. Though sex discrimination class actions are nothing new, it is the sheer size of the class that has raised eyebrows across the country:  1.5 million female Wal-Mart employees, encompassing both current and former employees in a range of positions employed at one of 3,400 stores across the country.  The plaintiffs allege that they were systematically discriminated against as a result of Wal-Mart's "corporate culture and subjective decision making."  As a consequence of Wal-Mart's policies, plaintiffs allege, female employees received less pay and fewer promotions.

The enormity of the class notwithstanding, the opinion touches on a number of other important issues which are important to California employers.  In certifying a class, the Ninth Circuit brushed off important arguments made by the defense regarding the predominance of individual issues and regarding the un-manageability of a trial of claims involving over 1.5 million employees working at various stores throughout the country.  The court ultimately held that common issues still predominated, and that the case was manageable as a class.  

The majority opinion makes clear that at the certification stage, district courts should focus on whether "common questions of law or fact" exist between the class members, and not, as the dissent suggests, the plaintiffs' apparent likelihood of success in answering those questions.  Thus, the plaintiffs were required to prove only a "common policy alleged to be discriminatory" against Wal-Mart's 1.5 million former and current female employees, as opposed to a "a common policy of proven discrimination."  This is a much easier hurdle for future class action plaintiffs to clear.

Also of significance to employers is the discussion of how plaintiffs may demonstrate the "common policy alleged to be discriminatory" necessary to certification.  On this point, the Court espouses the philosophy of "the whole is greater than the sum of its parts," as the Court took into account a number of factors that, taken in combination, appear to demonstrate discriminatory practices on the part of Wal-Mart.  The plaintiffs offered sufficient evidence of the company's "common policy" with evidence of "consistent gender-related domestic disparities," uniform management structure and highly centralized store operations, a "centralized corporate culture," as well as "company-wide policies governing pay and promotion decisions."  The Court paid special attention to statistical analysis when determining whether plaintiffs had shown the requisite "common question of fact."  Taken with other expert testimony as well as anecdotal evidence, the "properly analyzed social science data" provided the "scientifically reliable evidence" that permitted class certification.

Of course, there are few companies in the world that even approach Wal-Mart's size and scope, and most employers would not have to worry about such an in-depth analysis of company practice and policy in order to tease out possible discrimination.  However, employers should be aware of the wide-range of company issues that plaintiffs may inquire into when seeking class certification. As demonstrated perfectly in this case, it is not necessarily the "smoking gun," but rather the sum of many pieces of circumstantial evidence that may carry the day for class action plaintiffs at the certification stage.
 

By Dan Forman

On April 22, 2010, the California Supreme Court granted review of Harris v. Santa Monica, an important case that may permit California employers, like their counterparts in most other states and under federal law, to use a "mixed motive" defense against claims of discrimination and retaliation.  In Harris, the plaintiff claimed that she was fired because she was pregnant.  The City of Santa Monica wished to put on the defense that Harris would have been fired for poor performance regardless of her pregnancy due to her less than impeccable record of bus accidents, unexcused absences and unsatisfactory performance review.  Santa Monica sought an order that would have required Harris to prove that her protected trait, pregnancy, was the motivating factor behind the termination as opposed to being one of the many things that her supervisors discussed when the termination decision was made.  The trial court sided with Harris but the Second District Court of Appeal agreed that defendants should be permitted to put on a "mixed motive" defense.  Now, the Supreme Court will have the opportunity to provide employers with a more complete defense to claims of discrimination and retaliation under California law.  We will continue to post developments on this case.
 

By Robin E. Weideman

The EEOC recently issued a proposed rule explaining the “reasonable factors other than age” (RFOA) defense under the Age Discrimination in Employment Act (ADEA).  The RFOA defense shields an employer from liability in a disparate impact age discrimination case where the employer establishes that the challenged practice, even though shown to have a disparate impact on older workers, was facially neutral and based on reasonable factors other than age.

Under the EEOC’s proposed rule, for the RFOA defense to apply, the challenged practice must be found to be objectively reasonable in the eyes of a reasonable employer in similar circumstances. The proposed rule lists several factors to be considered in evaluating whether the employer relied on reasonable factors other than age, including (1) the commonality of the business practice used by the employer; (2) the manner in which the practice was administered; (3) the employer’s awareness of the possible adverse impact of the decision on older workers; (4) steps the employer took to assess and mitigate the impact of the decision on older workers; (5) the existence of less discriminatory alternatives; (6) the extent to which management engaged in age-related stereotyping; and (7) the extent to which the employer trained management on how to avoid discrimination.

The EEOC is accepting public comment on the proposed rule until April 19, 2010.  To access the proposed rule, click here.
 

By Candice Boyd

In Barbosa v. IMPCO Technologies, Inc., a California court held that public policy protects an employee from being terminated for making a mistaken but good faith claim to overtime compensation.

Manuel Barbosa worked at IMPCO Technologies, Inc. as a "cell leader" supervising up to eight other carburetor assemblers.  Barbosa was paid by the hour and sometimes he and the other employees worked overtime.  Barbosa testified that in June 2007, two of the employees in his cell told him they were missing two hours of overtime.  After their discussion, Barbosa thought he was missing two hours of overtime.  Barbosa told the payroll administrator that he and a few other employees had worked overtime.  Barbosa also told the payroll administrator that the time clock was wrong and perhaps that was the reason why the employees failed to receive their overtime pay.  IMPCO had occasional problems with a prior time clock system, but had recently installed a new one with no issues.  The payroll administrator spoke to the human resources manager who ran a report that established that Barbosa and the other employees could not have worked the overtime that Barbosa claimed.  Soon thereafter, Barbosa was called to a meeting with his supervisor, the payroll administrator, the human resources manager, and the operations manager. Barbosa was asked if he was sure he and the other employees worked overtime.  Barbosa responded affirmatively.  The operations manager showed Barbosa the report and Barbosa said he was confused and apologized.  Barbosa offered to pay back the overtime pay.  Barbosa was terminated on June 19, 2007, for falsifying time records.  The overtime money was eventually taken back from the employees.

At trial, IMPCO moved for nonsuit.  The court graned the nonsuit stating that, "I will accept plaintiff's version.  It still comes down to a question of law.  Good faith belief turns out to be wrong; termination thereafter of an at-will employee.  I don't see that there's a public policy that requires the employer to then make a determination whether this was good faith, not good faith, and require[s] the employer then to continue to employ this employee, who from [its] perspective made an unjustified claim for monies."

The Court of Appeal recognized that the duty to pay overtime wages is a well-established fundamental public policy affecting the broad public interest.  The Court of Appeal determined just as an employee's good faith but mistaken belief is protected from employer retaliation in the whistleblowing context, it follows that the same result should occur when an employee exercises his statutory right to overtime wages out of a reasonable good faith belief he is entitled to it, notwithstanding the later discovery that he is wrong.

In reaching its conclusion, the Court of Appeal noted that Barbosa's mistaken belief was reasonable and in good faith because under the previous time clock system, mistakes in timekeeping had been made; the new system had been in place less than a month; Barbosa's co-workers convinced him the overtime was unpaid, and he in turn convinced his supervisor; and Barbosa testifed he was confused.  As a result, the Court of Appeal found that Barbosa had presented sufficient evidence to have his case submitted to a jury.

You may read the entire case here.

By Robin E. Weideman

The California Supreme Court issued its decision today in Roby v. McKesson Corp., addressing two important issues—(1) whether personnel management conduct can constitute “harassment” within the meaning of FEHA, and (2) the constitutional limits on awards of punitive damages.  With respect to the first issue, the Court held that personnel management conduct, including reprimanding an employee in front of coworkers, belittling an employee’s job, and shunning an employee during staff meetings, is conduct that can support a finding of hostile work environment harassment.  The Court further held that evidence supporting discrimination claims and harassment claims often overlaps and is not necessarily exclusive.  Such evidence does not need to be separately allocated between the two claims.  This ruling blurs the distinction between conduct traditionally thought to support a “discrimination” claim on the one hand (e.g. written warnings, termination, etc.), and conduct traditionally thought to support a harassment claim on the other (e.g. discriminatory slurs, inappropriate physical contact, etc.).  This decision will likely make it more difficult for employers (and individual supervisors) defending claims of harassment under FEHA to obtain summary judgment.

With respect to the second issue on the size of the punitive damages award, the Court reiterated the standards articulated by the United States Supreme Court in State Farm v. Campbell, 538 U.S. 408 (2003), for reviewing the appropriateness of a punitive damages award:  (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.  The decision contains a detailed explanation of how each of these factors is properly analyzed and applied.  In this particular case, the Court held that the jury’s $15 million punitive damage award was constitutionally excessive and that on the facts of the case, punitive damages could not properly exceed the amount of compensatory damages awarded to the plaintiff.  The punitive damages were, therefore, reduced from $15 million to $1.9 million.

The Roby decision is here.
 

By Kent J. Sprinkle

By Robin E. Weideman

The Ninth Circuit recently held that a non-disabled employee claiming retaliatory discharge had standing to sue her employer under Section 504 of the Rehabilitation Act of 1973 and Title II of the Americans With Disabilities Act—two laws which prohibit discrimination against disabled individuals by certain public entities, including the Plaintiff’s employer, the Riverside County Office of Education.

The plaintiff in the case, Susan Barker, was a special education teacher for Riverside County. During the course of her employment, she complained that the County’s special education services were noncompliant with federal and state law.  Barker alleges that following her complaint, her supervisors began to retaliate against her by excluding her from meetings, reducing her caseload, failing to respond to her emails and phone calls, and similar conduct.  Barker alleged that she was ultimately forced to resign as a result of her employer’s alleged retaliatory conduct.

Barker subsequently filed a lawsuit against the Riverside County Office of Education, alleging retaliation under the Rehabilitation Act and the ADA.  A federal District Court dismissed Barker’s complaint, finding that because Barker was not “disabled” within the meaning of either law, she did not have standing to sue under such laws.  Barker appealed and the Ninth Circuit agreed with Barker. Liberally construing the anti-retaliation provisions of these two laws, the Ninth Circuit held that the provisions prohibit retaliation not only against disabled individuals, but also against non-disabled individuals who advocate for the rights of disabled individuals.  As a result, the Court held that Barker could proceed with her retaliation claims against Riverside County.

The case is Barker v. Riverside County Office of Education and the opinion is here.   

By Robin E. Weideman

Yesterday the California Supreme Court heard oral argument in three employment cases:  Roby v. McKesson HBOC, Schachter v. Citigroup, Inc., and Costco Wholesale Corp. v. Superior Court.  The Roby case addresses the following issues:  (1) can a supervisor’s management and personnel actions be considered in determining whether an employee has been subjected to hostile work environment harassment? and (2) may an appellate court determine the maximum constitutionally permissible award of punitive damages when it reduces a compensatory damage award, or must the appellate court remand the issue to the trial court for a new determination of punitive damages?

 

The Schachter case addresses the following issue:  Does the forfeiture provision of a voluntary incentive compensation plan, which gives employees the option of using a portion of their earnings to purchase shares in the company’s stock below market price but provides that employees forfeit both the stock and the money used to purchase it if they resign or are terminated for cause within a two-year period, violate Labor Code sections 201 or 202?  Our previous post on the Schachter case is here.

 

The Costco case addresses the following issues relating to application of the attorney-client privilege to advice provided by outside counsel to in-house counsel in a wage and hour misclassification action:  (1) does the attorney-client privilege protect factual statements made by outside counsel in a legal memorandum to in-house counsel? and (2) is a trial court prohibited from conducting an in camera review of the legal memorandum to determine whether the attorney-client privilege applies?  Our previous post on the Costco case is here.

 

Each of these three cases has important implications for many California employers.  The California Supreme Court is expected to issue decisions in these cases in the next 90 days.  We will continue to monitor the cases and post significant developments.

By Cindy Caplan and Jing Li

On June 18, 2009, in a 5-4 decision the Supreme Court held that a plaintiff bringing an age discrimination case under the Age Discrimination in Employment Act of 1967 (the “ADEA”) must prove by a preponderance of the evidence, that age was the “but-for” cause of the employment decision.  The Supreme Court further held that even if the employee presents some evidence that age was a factor, the burden of proof does not shift to the employer to show that it would have acted regardless of plaintiff’s age.

Plaintiff Jack Gross began working for FBL Financial Group, Inc. (“FBL”) in 1971.  In 2003, at age 54, Gross held the position of “claims administration director.”  Gross was reassigned to the position of “claims project coordinator.”  At the same time, FBL transferred many of Gross’ job duties to a new position called “claims administration manager.”  The new position was given to a woman in her early forties.  Gross contended that the reassignment constituted a demotion and sued under the ADEA. 

At trial, Gross presented evidence suggesting that his reassignment was based at least in part on his age. FBL contended that the reassignment was part of a corporate restructuring.  Over FBL’s objections, the District Court instructed the jury that it must return a verdict for the Plaintiff if it found that “age was a motivating factor” in the demotion.  The jury was further instructed that Gross’ age would be considered a motivating factor if it “played a part or a role in [FBL’s] decision to demote him.”  The jury was also instructed that if FBL proved by a preponderance of the evidence that it would have demoted Gross regardless of his age, the jury must find in FBL’s favor.  The jury found in favor of Gross and awarded him $46,945.

On appeal, the Eighth Circuit held that the jury had been incorrectly instructed.  The Court of Appeals found that Gross needed to present “[d]irect evidence…sufficient to support a finding by a reasonable fact finder that an illegitimate criterion actually motivated the adverse employment action” in order to shift the burden of persuasion to FBL to establish that it would have made the same decision regardless of Gross’ age.  Because Gross did not present any “direct evidence” of discrimination, the Court of Appeals found that he was not entitled to a “mixed motive” jury instruction.    

The Supreme Court reversed the Eighth Circuit decision, holding that a Plaintiff bringing a disparate-treatment claim under the ADEA must prove by a preponderance of the evidence, that age was the “but-for” cause of the employment action.  The Supreme Court noted that, unlike Title VII, which was amended to prohibit employment actions where a protected category was a “motivating factor” in the employment decision, the ADEA prohibits discrimination “because of” the individual’s age.  Due to the distinction between the language of Title VII and the ADEA, the Court declined to apply the “mixed motive” standard applicable in Title VII cases.  The Court held that the plaintiff “retains the burden of persuasion to establish that age was the ‘but-for’ cause of the employer’s adverse action.”  The Court noted that the burden of persuasion does not shift to the employer “even when the plaintiff has produced some evidence that age was one motivating factor in that decision.”

Although the Gross decision places a more onerous burden on Plaintiffs suing under the ADEA, it remains to be seen whether California courts will apply a similar standard to FEHA age discrimination cases.

The decision in Gross v. FBL Financial Group is here.

By Robin E. Weideman

Earlier this week, a California Court of Appeal held that “me too” evidence of discrimination was admissible in opposition to an employer’s motion for summary judgment and that such evidence was sufficient to require that the employer’s motion be denied.  The case is Dewandra Johnson v. United Cerebral Palsy/Spastic Children’s Foundation of Los Angeles and the decision is here.

 

The plaintiff alleged that her employment was terminated the day she returned from a one-week leave for a pregnancy-related disability.  The employee’s reason for believing her termination was because of her pregnancy was largely due to the timing of the action and the fact that the employer did not specifically tell her why she was being fired.  The employer presented evidence that the employee was fired for falsifying time and billing records, which was discovered during the employee’s absence.  The employer moved for summary judgment, arguing that the employee did not have sufficient evidence of discriminatory motive for the case to proceed to trial.  The trial court agreed, finding that timing alone and evidence that the employer’s decision may have been unwise or unsound, were not sufficient grounds to rebut the employer’s proffered non-discriminatory justification for the termination. 

 

In opposition to the employer’s motion, the plaintiff also presented a number of declarations of other former employees, all suggesting that they too had been discriminated against by the same decisionmakers on account of pregnancy.  The employer made evidentiary objections to these declarations, arguing that they were not admissible evidence.  It appears that the trial court never ruled on the employer’s objections, but granted the employer’s motion for summary judgment, finding that the plaintiff had failed to present sufficient evidence of discrimination.  The plaintiff appealed.

 

The appellate court reversed the trial court’s ruling, finding that the “me too” declarations were admissible evidence and that they provided sufficient evidence that the employer’s action may have been motivated by discriminatory animus to entitle the plaintiff to proceed to trial on her claim.  The trial court reasoned that the factual circumstances alleged in the “me too” declarations were sufficiently similar to the plaintiff’s allegations that they were sufficiently probative to be admissible evidence.

 

This case is a good reminder that timing alone, while generally insufficient by itself to defeat summary judgment, is often the trigger for a lawsuit and the expensive litigation that follows.  Another factor that can compound a timing problem is not being forthcoming with an employee as to the reason for termination.  Finally, this case is a good reminder that employers should always demand rulings on evidentiary objections made in connection with motions for summary judgment, because these rulings are important in any subsequent appeal.

By Leigh A. White

The First Appellate District's recent decision of Nadaf-Rahrov v. Neiman Marcus Group, Inc. highlights the importance of exhausting all possibilities of accommodating an employee regardless of what the employee's medical certifications state.  In that case, the plaintiff, who was a fitter for Neiman Marcus, went on medical leave in November 2003 for pain related to osteoarthritis.  The plaintiff's medical certifications stated that she was unable to perform work of any kind, and subsequent certifications extended the plaintiff's leave through August 2004.  Although Neiman Marcus' human resources manager had some discussions and correspondence with the plaintiff about returning to work, the plaintiff's doctor never released her to return to work, and as a result, after the plaintiff had exhausted her sick leave and vacation benefits, Neiman Marcus terminated her employment on July 14, 2004.

The trial court granted summary judgment to Neiman Marcus on the plaintiff's claims for disability discrimination based on termination of employment, failure to accommodate, and failure to engage in the interactive process, and the plaintiff appealed.  On appeal, the Court reversed summary judgment for the disability discrimination claims and the national origin discrimination claim. 

Regarding the disability discrimination claim based on termination of employment, the Court of Appeal rejected all three of Neiman Marcus' arguments that the plaintiff could not have performed the essential functions of any vacant position, with or without accommodation. 

First, the Court of Appeal found that the doctor's certifications that the plaintiff was unable to perform work of any kind did not require summary judgment because: (1) the doctor intended the certification forms to indicate only that the plaintiff was unable to perform the essential functions of her current job; (2) the doctor sent Neiman Marcus a letter after the certification forms stating that he would "strongly support" the plaintiff's change to a position that did not involve bending, standing or kneeling; and, (3) the doctor did not release the plaintiff to return to work because he did not believe she could perform her job as a fitter, and Neiman Marcus had not offered her any other positions for him to evaluate.  Based on that additional evidence, the medical certifications alone did not establish that the plaintiff was unable to perform work of any kind at the time of the termination of her employment or in the foreseeable future.

Second, the Court of Appeal found that the plaintiff's admissions in deposition that she was so severely physically disabled that she was unable to perform most ordinary household chores or activities of daily living, as physical activity increased her pain, did not mandate summary judgment.  The Court, while noting that these physical restrictions were "substantial," found that they did not "obviously preclude" the plaintiff from performing desk jobs with accommodation.  The Court of Appeal found that the plaintiff had raised a triable issue of fact about "whether vacant desk jobs" were available for which the plaintiff would be qualified.

Third, although Neiman Marcus submitted a declaration from its human resources manager stating that the plaintiff was not able to perform a laundry list of various positions that were available up to the date of the plaintiff's termination, the Court of Appeal found that the plaintiff raised a triable issue of fact by pointing to jobs that came open, at least some of which came open after the plaintiff's employment terminated.  Specifically, the plaintiff produced evidence that other jobs were available at Neiman Marcus through November 2004, more than three months after her employment terminated, several of which the plaintiff's doctor opined that she could have performed. The Court of Appeal found that jobs available for an "extended period" after termination are relevant because "it may have been a reasonable accommodation for Neiman Marcus" to give the plaintiff an extension on her leave of absence "for a limited period of time until a position became available," especially if the employer could have anticipated the future opening.  For this same reason, the Court of Appeal also reversed summary judgment on the plaintiff's failure to accommodate claim.

Finally, regarding the plaintiff's failure to engage in the interactive process claim, the Court of Appeal determined that, consistent with the federal rule, an employer cannot be liable for failing to engage in the interactive process where no reasonable accommodation would have enabled the plaintiff to perform the essential functions of the job held or sought, rejecting two prior Court of Appeal cases holding that FEHA imposes liability for failure to engage in the interactive process even if no reasonable accommodation would have been possible.  The Court of Appeal, however, found that there was a triable issue of fact as to whether Neiman Marcus was responsible for the breakdown in the interactive process by requiring plaintiff to provide a release to return to work listing her restrictions before discussing other open job positions, as providing information about available positions could have assisted the plaintiff and her doctor in providing specific work restrictions.  Moreover, the Court of Appeal found that a reasonable jury could determine that Neiman Marcus' decision to terminate plaintiff's employment without advance warning or further discussion was unreasonable and caused a break down in the interactive process.

The lesson to be learned from this case is that the employer cannot rely on the doctor's leave certificates to terminate employment without exhausting all possibilities for accommodation with the employee.  Employers should always make one last final attempt to engage in the interactive process with the employee before terminating employment.  The employer should ask if any accommodations would permit the employee to returnt to work in his/her current position at that current time or in the reasonably forseeable future.  The employer should also give the employee information about all of the open job positions at that time (to the extent they are not promotions) as well as any job positions that the employer believes will come open in the forseeable future, and provide job descriptions for the employee to review with his/her doctor to determine whether the employee can be accommodated in any of these positions.  If the employer has more than one location, the employer should provide information about open positions in all of the locations to which the employee is willing to relocate.  Finally, the employer should not require a release to return to work prior to this type of an exchange.

 

 

By Mark Spring

In 2005, the United States Supreme Court issued its ruling in Smith v. City of Jackson, 544 U.S. 228 (2005), recognizing that employees can bring disparate impact claims for age discrimination under the Age Discrimination in Employment Act (ADEA) (claims based on evidence that older workers are disproportionately affected by an employment decision, even if the decision was not taken because of the employees' age). 

Yesterday, the United States Supreme Court issued its opinion in Meacham v. Knolls Atomic Power Laboratory, setting forth its interpretation of the burden of proof in such cases. In a 7-1 ruling (Justice Breyer did not participate), the Court held that in disparate impact ADEA claims , the employer bears the burden of both producing evidence and of ultimately persuading the fact finder that there is a reasonable explanation other than age for the company’s action. As a result of this decision, in disparate impact cases, if the employer cannot meet its burden of proving both (a) that the decision was based on a factor other than age, and (b) that the decision was "reasonable," liability will be established simply by the employee establishing that the decision had an adverse impact on older workers through statistical or other evidence.

Justice Souter issued the opinion and the lone dissent was issued by Justice Thomas, who continued to assert his belief that disparate impact cases are not cognizable under the ADEA. In the opinion, the Court specifically held that "there is no denying that putting employers to the work of persuading factfinders that their choices are reasonable makes it harder and costlier to defend than if the employers merely bore the burden of production; nor do we doubt that this will sometimes affect the way employers do business with their employees." However, the Court specifically held that it could only interpret the statute and that it is up to Congress to modify the language if a different result were to be reached.

In light of the Court's opinion, employers who are considering layoffs or reductions in force should make sure they carefully examine whether such action will have an adverse action on older workers. If the statistics demonstrate such adverse action, employers must take extra precautions to ensure that they have legitimate and objective explanations supporting the selection process that are entirely separate from age or age-related characteristics and are likely to be considered reasonable by an independent factfinder. Failure to engage in such an analysis prior to implementing a layoff or reduction in force, is now more likely to expose the employer to substantial liability.

By Alison L. Tsao

The Sixth Circuit of the U.S. Court of Appeals recently ruled that an employer who hired an employee through a staffing agency may be liable for violations of the federal Family Medical Leave Act (FMLA).  In Grace v. USCAR and Bartech Technical Services, LLC, --F.3d--, 2008 WL 782470 (6^th Cir. 2008), Plaintiff Rosalyn Grace was a long-term “contractor” who provided information technology (IT) services to Defendant USCAR through a couple of different placement agencies for a period of eight years.  In the fall of 2004, Grace developed a respiratory disability (asthma) that eventually resulted in her hospitalization, whereupon she took a leave of absence through her staffing agency, Bartech.  In late December 2004, just days before Grace’s original anticipated date of return to work, Bartech informed Grace that USCAR had decided to outsource its IT duties and that, as a result, her position was terminated.

USCAR contended that its management decided in the fall of 2004 to restructure its IT division to switch from using full-time contractors to contracting directly with individual providers on an as-needed basis.  Grace’s position was allegedly targeted for restructuring.  While Grace was on FMLA leave in December 2004, USCAR decided to use the services of another Bartech contractor, Spolarich, to handle regular IT maintenance issues due to Grace’s absence.  In May 2005, USCAR contracted directly with Spolarich for a 20-hour per week job to permanently fill the new IT position at USCAR.

Grace filed suit against Bartech and USCAR in federal district court, alleging among other things, violations of the FMLA for failing to return her to her pre-leave (or comparable) position and retaliation, and for gender discrimination under Title VII and Michigan’s civil rights law.  The district court granted both employers’ motions for summary judgment.  The Sixth Circuit Court of Appeals reversed the district court’s ruling with respect to the FMLA claims but affirmed the grant of summary judgment as to Grace’s Title VII claim.

The Court recognized that the FMLA is silent about the issue of joint employment.  However, the Department of Labor (DOL) has promulgated regulations such that liability could attach to Bartech and USCAR under either an “integrated employer test” or “joint employment” test under 29 C.F.R. § 825.104(c)(1).  The Court found that the integrated employer test did not apply because there was not sufficient interrelation between the operations of the staffing agency and client employer.  However, the Court found sufficient evidence under a joint employment test because each employer exercised a sufficient level of control over Grace’s work or working conditions.  Specifically, 29 C.F.R. § 825.106(a) describes three employment relationships where joint employment will “generally . . . be considered to exist:” (1) “where there is an arrangement between employers to share an employee’s services or to interchange employees;” (2) “where one employer acts directly or indirectly in the interest of the other employer in relation to the employee;” or, (3) “where the employers are not completely disassociated with respect to the employee’s employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under the common control with the other employer.”  Under specific regulations pertaining to cases involving staffing agencies and client employers, Bartech was determined to be Grace’s primary employer because it had the ultimate decision to hire and fire, the sole ability to assign Grace, and was the entity in charge of her payroll and benefits.  USCAR was determined to be a secondary employer because it supervised Grace’s day-to-day work and determined her salary and hours.  Although only the primary employer is responsible for giving required notices, providing FMLA leave, and maintaining health benefits, both primary and secondary employers must honor the FMLA leave and not engage in “retributory action.”  Significantly, the Court notes that the anti-retaliation provisions applicable to secondary employers apply even if the secondary employer may not be covered by FMLA.  Under 29 C.F.R. § 825.106(e), the secondary employer is responsible for “accepting the employee returning from FMLA leave in place of the replacement employee if the secondary employer continues to utilize an employee from the temporary or leasing agency.”

The Court ruled that Grace produced sufficient evidence to raise triable issues of fact as to whether USCAR’s decision to restructure its IT functions was unlawful discrimination or retaliation for Grace’s exercise of her FMLA rights.  Grace contended that the replacement employee, Spolarich, performed functions similar to those performed by her before her FMLA leave.  While Spolarich was contracted for fewer hours, he was paid at a higher rate such that the cost savings to USCAR was not significant.  Most damning was evidence of meetings notes where USCAR’s Director of Operations inquired as to Grace’s termination, and when apprised of a need for a “legitimate business reason” to avoid the risk of being sued, asked “can lawyers construct a way to make it [Grace’s termination] doable?”  The Court held these facts warranted a trier of fact to determine the true motive behind USCAR’s decision not to reinstate Grace after the expiration of her FMLA leave.

Employers who rely on staffing and placement agencies for its personnel needs are advised to review their policies with respect to FMLA compliance in relation to its “contracted” personnel.  If you have any questions about FMLA compliance with respect to an employee employed through a staffing agency, please contact us.

By Kent J. Sprinkle

Echoing the California Supreme Court's recent decision in Jones v. The Lodge at Torrey Pines Partnership et al., a California Court of Appeal has provided additional clarification on the holding that individual supervisors cannot be personally liable for retaliation under the FEHA.  Specifically, the Court of Appeal in Hammond v. County of Los Angeles et al., 73 Cal.Rptr.3d 690 (2008), held that individual supervisors cannot be personally liable for retaliation under the FEHA even when the claim of alleged retaliation by a supervisor is in response to an employee's complaint for harassment by the same supervisor (as opposed to a complaint for discrimination).  

Plaintiff Hammond, a nursing instructor employed by the Los Angeles County Sheriff's Department, sued her employer, the County, as well as her supervisor, alleging violations of the FEHA, including race and age discrimination, harassment and retaliation.  The County and her supervisor successfully moved for summary judgment and Plaintiff appealed.  On appeal, the summary judgment order was reversed.  However, the Court of Appeal held that the individual supervisor defendant was entitled to summary adjudication in her favor as to Plaintiff's claim for retaliation because such claims cannot be asserted against non-employer individuals.  Plaintiff argued that the Supreme Court's holding in Jones does not extend to claims alleging retaliation by a supervisor in response to an employee's report of harassment by that supervisor, and that Jones involved claims of retaliation by a supervisor in response to an employee's report of discrimination, not harassment.  Plaintiff argued that a supervisor who is allegedly liable for harassment should also be liable for retaliation against an employee who opposes or reports that harassment.  The Hammond court rejected this argument and instead concluded that "there is no sound basis for a distinction between retaliation for a complaint about discrimination on the one hand and retaliation for a complaint about harassment on the other." 

The Hammond court explained its reasoning in the following manner:  "The Supreme Court in Jones interpreted the FEHA as not imposing individual liability for retaliation.  The court said, 'In this case, we must decide whether the FEHA makes individuals personally liable for retaliation.  We conclude that the same rule applies to actions for retaliation that applies to actions for discrimination: The employer, but not non-employer individuals, may be held liable.'  The court's reliance on the discussion in Reno v. Baird, 18 Cal.4th 640, 643 (1998), pointing to the adverse consequences of subjecting supervisors to personal liability for personnel decisions, seems equally applicable to claims of retaliation based on reports of harassment.  It is true that under the FEHA a supervisor may be subject to personal liability for harassment, but not for discrimination.  But that distinction is of little significance in determining the question of whether a supervisor should personally be liable for retaliation under the FEHA.  The policy of protecting supervisors from 'the ever-present threat of a lawsuit each time they make a personnel decision' would seem to apply generally to retaliation claims, regardless of whether the alleged retaliation was in response to an employee's report of discrimination or harassment.  The idea that a supervisor has more incentive to retaliate for reports of harassment than for reports of discrimination is highly theoretical.  Accordingly, we hold that Brennan [the supervisor] cannot personally be liable for retaliation under the FEHA."

In analyzing this decision, as with Jones, employers should remain mindful that, although individual employees are not personally liable, employers are still liable for any unlawful retaliation, whether it relates to complaints of discrimination or harassment or something else.  Please contact us directly if you have any questions regarding the Hammond decision.

By Kent J. Sprinkle

A Plaintiff alleging racial discrimination and retaliation against his employer was ordered to pay the employer's attorneys' fees after the employer obtained summary judgment on all of Plaintiff's claims.  In Villanueva v. City of Colton, 160 Cal.App.4th 1188 (2008), Plaintiff was employed by the City of Colton in its wastewater division.  After being demoted to a lesser paying position following a reduction in force, the Court found that Plaintiff's demotion was due to legitimate non-discriminatory reasons, including Plaintiff's prior incident of mishandling an alarm incident and his lack of seniority based on continuous service.  The employer filed a motion for summary judgment and the essence of its position was that, in light of the negligent manner in which Plaintiff had handled the prior alarm incident, and the elimination of Plaintiff's position being due to the City's budget shortfall and resulting reduction in force, it had legitimate non-discriminatory reasons to defeat Plaintiff's claim of pretext for the demotion.  While Plaintiff attempted to introduce evidence of allegedly racial remarks by various individuals at the City, all of this evidence was properly excluded for various reasons.  Moreover, Plaintiff was removed from his higher-paying position instead of removing another employee holding the same position, who had more seniority, and the employee who was not demoted was also Hispanic, like Plaintiff, giving the Court further reason to believe that Plaintiff's demotion was not based on race.  

The employer sought an award of attorneys' fees to be paid by Plaintiff, based on California Government Code Section 12965(b), which authorizes an award of reasonable attorneys' fees and costs to the prevailing party in a FEHA case under certain circumstances.  The trial court awarded the employer nearly $40,000 in attorneys' fees.  The Court of Appeal affirmed the award, noting that the employer's entitlement to the award of attorneys' fees under the statute "cannot seriously be questioned" and further stated that "[i]ndeed, the record reflects overwhelming evidence that the lawsuit was unfounded, unreasonable, and frivolous."  

Plaintiff argued that the trial court was required to take into consideration his ability to pay when making a fee award.  However, the Court of Appeal held that the award of attorneys' fees was proper because the Plaintiff offered no evidence of any kind regarding his inability to pay.  The Court of Appeal noted that, in responding to the employer's request for attorneys' fees, the Plaintiff could easily have offered a declaration setting forth his income and other information that would lend support to his position.  Thus, the Court of Appeal held that even though it agreed "that a trial court has an obligation to consider a losing party's financial status before assessing attorney fees under the FEHA, on the record before us we are unable to say that the court's fee award was an abuse of discretion."

What does this mean for employers?  Practically speaking, if a plaintiff need only provide some evidence to the trial court of their inability to pay such an award, then the point may be moot in many cases. Still, this decision is a good sign for employers, since it is a cautionary tale to plaintiffs pursuing frivolous FEHA claims.  It also allows for at least mild optimism that employers may actually be able to recoup some of the costs involved in defending frivolous claims, since not all plaintiffs are necessarily unable to pay.  

The U.S. Equal Employment Opportunity Commission ("EEOC") recently issued a press release advising that a total of 82,792 discrimination charges were filed last year.  According to the EEOC, this was the highest volume of incoming charges since 2002, and the largest annual increase (9%) since the early 1990s.  The most frequently alleged forms of discrimination were based on race (with a 12% increase), retaliation (up 18% to a record high level) and sex (up 7%), although nearly all classifications posted increases from the previous year.  The EEOC also noted that pregnancy discrimination and sexual harassment claims appear to be trending upward trend – pregnancy discrimination charges increased 14% from the previous year, and sexual harassment filings increased for the first time (4%) since 2000.  Notably, a record 16% of sexual harassment charges were initiated by men.

When the economy slows down, it is not uncommon to see an increase in discrimination filings.  The EEOC has recognized this, opining that the increased filings have come about, in part, because of changing economic conditions.  Employers are therefore advised to remain vigilant in the enforcement of anti-discrimination, harassment and retaliation policies, and to ensure that supervisory employees receive all legally required training.  Please contact us directly to discuss any questions you may have relating to your obligations to prevent discrimination and harassment in the workplace.

Employers and managers received some welcome news yesterday when the California Supreme Court ruled in Jones v. The Lodge at Torrey Pines Partnership that supervising employees could not be held personally liable in cases alleging claims of retaliation. 

In Jones, a jury returned a verdict against the employer and an individual defendant supervisor, finding both liable for retaliating against an employee who had made a sexual orientation discrimination complaint.  In reversing the appellate court's decision affirming that verdict, the California Supreme Court found that the statutory language prohibiting retaliation did not plainly provide for personal liability on retaliation claims.  Drawing an analogy to discrimination claims, which also do not provide for personal liability of individual employees, the Court stated that:

“All of these reasons for not imposing individual liability for discrimination – supervisors can avoid harassment but cannot avoid personnel decisions, it is incongruous to exempt small employers but to hold individual non-employers liable, sound policy favors avoiding conflicts of interest and the chilling of effective management, corporate decisions are often collective, and it is bad policy to subject supervisors to the threat of a lawsuit every time they make a personnel decision – apply equally to retaliation.” 

Based upon these policy considerations, the ambiguous statutory language, and a review of legislative history, the Court held that there was no personal liability for retaliation claims.

In analyzing this decision, employers should be mindful that, although individual employees are not personally liability, employers are still liable for any unlawful retaliation.  Please contact us directly if you have any questions regarding the Jones decision.

Posted by Nancy G. Berner

In its unanimous decision in Sprint/United Management Co. v. Mendelsohn, an age discrimination case, the U.S. Supreme Court explicitly directed a lower court to question the relevancy of testimony by co-workers who claimed they were also subjected to age discrimination, but who played no role in the discrimination allegedly suffered by the plaintiff.

In that case, a former 51-year old Sprint employee alleged that she had been selected to be part of a reduction-in-force because of her age, and attempted to present evidence that five other former employees had also been unfairly treated due to their age.  None of the five witnesses had worked in the same group as plaintiff or under the supervisors in her chain-of-command.  The trial court held that this so-called "me too" evidence was both unfairly prejudicial and irrelevant because those workers were not similarly situated given that their work had not been overseen by any of plaintiff's direct supervisors; this ruling was subsequently interpreted to mean that such "me too" evidence was per se prohibited in such cases.

The U.S. Supreme Court, however, found that such evidence is neither per se admissible nor per se inadmissible.  Specifically, the Court held that the appropriate methodology in such cases would be a fact intensive, case-by-case approach, including an analysis of how closely related the evidence is to the plaintiff's circumstances and theory of the case. 

In practical terms, even if the evidence is determined to be relevant, the court must still then determine whether it should be presented to a jury, especially where it could be highly prejudicial to the defendant, also requiring a fact intensive, case-by-case approach.  Please contact us directly to discuss any questions you may have relating to the impact of this decision as it relates to your business.

Posted by Christopher M. Robertson

Hammond v. County of Los Angeles illustrates that an employer's success at the appellate court level can be just as dependent on the luck of the draw as at the trial court level.  Specifically, in that case the dissenting justice had a completely different view of what constitutes an adverse employment action and sufficient evidence of discrimination than the two justices who reversed the trial court's order granting the employer's motion for summary judgment. 

To be actionable under California's Fair Employment and Housing Act (FEHA), the discriminatory or retaliatory adverse employment action must materially affect the terms, conditions or privileges of employment, and must have occurred during the one year preceding the filing of the DFEH complaint.  The majority opinion in Hammond found that a reduction in teaching assignments for the plaintiff, a nursing instructor, was sufficient to constitute an adverse employment action, and although that reduction began before the applicable statute of limitations period, such an adverse employment action was not time-barred because it continued into the applicable statute of limitations period.  The dissenting justice, on the other hand, rejected the majority's contention that the reduction in teaching assignments constituted an adverse employment action because it relegated the plaintiff to "some undefined, but lesser, status," and criticized the majority opinion for "essentially allowing an infinite period of limitations." 

 

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The California Supreme Court announced today that it granted the petition for review filed by Google in that company's continued appeal of an age-discrimination action filed by one of its former employees. 

Specifically, and as reported in a previous entry on this blog, the plaintiff in Reid v. Google, Inc. (who was 54 years old at the time of his termination) claimed he had been called “fuzzy,” “sluggish,” and “lethargic” at work, and that he had been told his ideas were "obsolete" and "too old to matter."   After the trial court granted Google's summary judgment motion, plaintiff appealed the decision.  The appellate court found that these comments were not, as a matter of law, "stray remarks," and that the plaintiff should consequently be allowed to pursue his claims (click here to review that decision).  Google has now appealed from that ruling, seeking relief from the California Supreme Court, which has agreed to hear the matter.

We will continue to provide updates as this case makes its way through the Court.  In the interim, please contact us directly to discuss any questions you may have relating to this matter.

Posted by Robin E. Weideman

Earlier today the California Supreme Court issued its long-awaited decision in Ross v. RagingWire Telecommunications, Inc. and held that an employee who was fired for failing a drug test due to medical marijuana use does not have a valid claim for disability discrimination or wrongful termination against the employer. 

The plaintiff in that case applied for and was offered a position as a systems administrator with RagingWire.  In connection with his hiring, he was required to take a drug test, and three days later started work for RagingWire.  Later the same week, RagingWire received plaintiff's drug test results, which were positive for marijuana, and suspended plaintiff.  Plaintiff provided RagingWire with a doctor's note explaining that he was medically prescribed marijuana to treat chronic back pain.  Notwithstanding the doctor's note, RagingWire terminated plaintiff's employment.

Plaintiff subsequently sued RagingWire for disability discrimination and failure to accommodate a disability under the California Fair Employment and Housing Act.  He also alleged a claim for wrongful termination in violation of public policy, arguing that RagingWire's termination of his employment contravened the public policy behind California's Compassionate Use Act (the California statute exempting users of medically prescribed marijuana from criminal liability under certain state laws). 

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Posted by Sarah N. Drechsler

A recent MSNBC article reports on the all-time high number of racial harassment cases filed by employees in 2007.  Experts believe that the increase in cases may be caused by several factors, including the influx of Gen-Yers into the workplace who are more likely to report harassment than baby boomers, relaxed company standards due to perceived nationwide strides against discrimination, and stresses in the workplace due to the sluggish economy. 

This article is a useful reminder that, even in 2008, racial insensitivity continues to be a major problem in the workplace, such that employers must remain vigilant in their efforts to maintain a harassment-free workplace.  Please contact us directly to discuss any questions relating to racial harassment in your workplace.

The U.S. Supreme Court will attempt to harmonize differing appellate court rulings by deciding whether the Americans with Disabilities Act (“ADA”) requires an employer to give a disabled employee a preference in job reassignments.

In Huber v. Wal-Mart, Huber was employed by Wal-Mart in the position of dry grocery order filler. She was subsequently injured and was unable to perform the duties of her original position. Huber sought reassignment to the vacant position of router as a reasonable accommodation under the ADA. Another employee, however, was selected for that position because he allegedly possessed better qualifications, being employed by Wal-Mart for six years longer than Huber and having a higher evaluation score.   The parties stipulated that the position of router was equivalent to her former position and that Huber was qualified for the position. Huber was ultimately reassigned to a maintenance position that paid approximately half of what she made in her prior position. 

Huber argued that Wal-Mart should have reassigned her to router as a reasonable accommodation. Wal-Mart argued that to automatically assign her to the router position, when she was not the most qualified applicant, would violate its nondiscrimination policy. The District Court granted Huber’s motion for summary judgment and Wal-Mart appealed the grant of summary judgment to the Eighth Circuit Court of Appeals.

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Posted by Mark S. Spring

Yesterday, the House of Representatives in Washington D.C. passed the Employment Non-discrimination Act, a bill that provides protections against discrimination in the workplace for gay men, lesbians and bisexuals that are similar to the federal protections already in place for older workers, minorities and disabled workers under the federal ADEA, Title VII and Americans With Disabilities Act.  For those interested in the politics of this event, 35 Republicans joined 200 Democrats voting for the bill, while 25 Democrats voted against the bill.  The overall vote was 235-84. 

While this is big news in today's newspapers, it probably will have little impact in California for two reasons:

1.         Although this bill will also likely pass through the Senate, most expect President Bush to veto the measure and there are not sufficient votes to override such a veto; and,

2.         Even if it became law, California's Fair Employment and Housing Act already offers virtually all the same protections as this bill and is actually much broader, offering similar protections to any individual discriminated against based on being transgender or based in any way on their gender identity (see 2004 amendments - AB 196). 

Thus, while the path of this bill may have some interesting political ramifications and could influence how gay voters cast their ballots in 2008, for California employers it will have little practical workplace impact no matter whether it is enacted, defeated, or vetoed.

A California court of appeal recently gave another stark reminder to employers that certain terminology may be seen by courts as covert ageism and open the door to claims of age discrimination. In Reid v. Google, Inc.,____ Cal. App. 4th ____ (2007), a California court of appeal reversed a superior court’s grant of summary judgment on the plaintiff’s age discrimination claims. The plaintiff was over 50 years old and worked for Google, Inc. He offered statistical evidence of age discrimination at Google, purporting to show that there was a relationship between age of Google employees and their performance ratings and bonuses received. In addition, he also offered as evidence the alleged ageist remarks of a supervisor, who the plaintiff claimed had stated that the plaintiff did not fit into “the culture” of Google. The plaintiff also alleged that he was called “fuzzy,” “sluggish,” and “lethargic” and that he was told that his ideas were "obsolete" and "too old to matter."  Finally, the plaintiff argued that the reasons given to him for his termination when he was terminated differed from the reasons presented to the court by Google in its motion for summary judgment.    

Based upon these facts, the appellate court reversed the superior court’s grant of summary judgment on the plaintiff’s age discrimination claims, finding that, when combined with the statistical evidence, the alleged comments from the plaintiff’s supervisor were not, as a matter of law, “stray remarks.”  Thus, the court found that the plaintiff had presented enough evidence to create a triable issue of fact concerning his claims of age discrimination against Google, and sent the case back to the Superior Court to allow it to proceed.   Reid v. Google should serve as a reminder to employers to avoid terms that may double as ageist remarks, even if they do so indirectly.  For the full text of the court’s decision, click here.    

Posted by Nancy G. Berner

In a recent 4-3 decision, the California Supreme Court concluded that employees who allege disability discrimination based on California's Fair Employment and Housing Act ("FEHA") must prove that they can perform their essential job functions, with or without accommodation.  With this ruling, the Court resolved a split in authority, and aligned FEHA requirements with those of the Americans with Disabilities Act, its federal counterpart.

What Happened

The controversy in Green v. State of California stemmed from a disagreement between the plaintiff and his employer, the Department of Corrections ("DOC"), about whether or not the employee was able to perform the job functions of a stationary engineer.  The DOC maintained that the fatigue caused by the employee's ongoing treatment for Hepatitis C rendered him permanently unable to work, and denied his request to return to his position.  The employee filed a lawsuit seeking recovery for disability discrimination; both the trial and appellate courts held that FEHA required the DOC to establish that plaintiff was incapable of doing his job.  The California Supreme Court, however, disagreed: Plaintiff and all employees who claim disability discrimination in the future bear the burden of proving that they are able to perform the essential functions of their jobs.

What it Means for California Employers

The Supreme Court’s ruling is unambiguous.  FEHA prohibits employers from drawing distinctions based on physical and mental disability “only if the adverse employment action occurs because of a disability and the disability would not prevent an employee from performing the essential duties of the job, at least not without reasonable accommodation.”  Therefore, it is now incumbent upon employees to prove that they can perform their jobs.  Nonetheless, from a practical point of view, it still behooves employers to carefully evaluate a disabled employee’s ability to perform the job, and carefully review potential reasonable accommodations.  In other words, even though employees must demonstrate that they can do the job, employers are well advised to conduct careful, good faith investigation to determine whether a reasonable accommodation can be provided to help minimize a plaintiff's potential for recovery in such cases.

For specific questions concerning compliance, please contact us directly.

Posted by Nancy G. Berner

On July 18, 2007, the Office of Administrative Law approved the Fair Employment and Housing Commission’s oft-submitted regulations implementing AB 1825.  The newly-titled “Sexual Harassment Training and Education” regulations (California Code of Regulations §7288.0) become effective on August 17, 2007 and are available online by clicking here.  Briefly, the adopted regulations require:

• Effective, interactive training, via either classroom, interactive computer programming, internet based seminar, or a combined use of audio, video or computer technology in conjunction with any of these three methods. Importantly, the training must be interactive; if a trainer is not present, one must be available to answer questions within two business days after the question is asked. 
• Tracking -- The biennial two-hour training can be tracked either by the individual, or by a “training year” method in which the employer designates training years for all supervisors, e.g. 2007, 2009, 2011, etc.  Note, however, that new employees must be trained within six months of hire, so those hired in non-training years will actually be retrained sooner than required by the regulations.  A record of who received the training, when, what type and from whom must be maintained for two years.
• Covered Employers are those with 50 or more employees, regardless of the employee locations.  However, only supervisors located in California are required to receive training.
• Trainers must be highly qualified.  For example, attorneys can be trainers, but only two or more years after their admission to a state bar, and if their practice includes employment law.

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Posted by Vanessa W. Whang

On May 29, 2007, the United States Supreme Court decided Ledbetter v. Goodyear Tire & Rubber Co., Inc., a case involving a Title VII claim for sex discrimination.  Lilly Ledbetter worked for Goodyear for 19 years and claimed that her past performance evaluations were discriminatory based on her sex because they caused her to be earning significantly less than her male counterparts at the time of her retirement in 1998.  Ledbetter filed a EEOC questionnaire in March 1998.  Relying on the "paycheck accrual rule," she claimed that the paychecks she received up to the date of her retirement were unlawful because they would have been larger is she had been evaluated in a non-discriminatory way prior to the EEOC charging period (180 days prior to her filing her EEOC questionnaire). 

A split (5-4) U.S. Supreme Court held that because Ledbetter did not assert that any of the pay decisions made within 180 days of her filing of her EEOC questionnaire were discriminatory, her claims were time-barred.  The Supreme Court held that "the EEOC charging period is triggered when a discrete unlawful practice takes place.  A new violation does not occur, and a new charging period does not commence upon the occurrence of subsequent non-discriminatory acts that entail adverse effects resulting from past discrimination.  But of course, if an employer engages in a series of acts, each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed."

This decision is helpful to employers as it helps define how statutes of limitations will be analyzed in discrimination cases where continuous violations are alleged.  In addition, it will likely help eliminate employees from bringing stale claims back to life simply by adding continuous violations type allegations that are not supported with real evidence.  However, this decision may have the practical effect of prompting employees to file Title VII charges more quickly because of the Supreme Court's strict statute of limitations ruling.  It should be noted that this case is limited to Title VII pay claims and it is unclear whether the reasoning of Ledbetter will be adopted in other contexts.  In addition, employees may still make disparate pay claims under other federal and state laws which may have different statute of limitations and administrative exhaustion requirements.

Posted by Ursula Kubal

Jones v. The Lodge at Torrey Pines Partnership, 147 Cal. App. 4th 475 (2007)

The totality of circumstances must be considered in determining whether an adverse action has been taken against a plaintiff in retaliation and discrimination cases.

Plaintiff employee sued under the California Fair Employment and Housing Act ("FEHA"), for sexual orientation discrimination by defendant employer and retaliation by the employer and defendant supervisor. Following a jury verdict for plaintiff, the trial court granted defendants' motions for judgment notwithstanding the verdict ("JNOV") and a new trial. Using the standards laid out in MacRae v. Department of Corrections & Rehabilitation, 142 Cal App. 4th 377 (2006), the trial court found that there was insufficient evidence of an adverse employment action for purposes of establishing sexual orientation discrimination or retaliation, because none of the alleged retaliatory acts had a tangible detrimental effect on plaintiff's employment.

The California Court of Appeal reversed both trial court rulings and reinstated judgment in favor of plaintiff. The appellate court found that the trial court had used an overly restrictive definition of adverse employment action, because it considered only actions that had a substantial and detrimental affect on plaintiff's employment, including plaintiff's poor performance review and several written criticisms of plaintiff's employment. Under a totality of circumstances approach, there was sufficient evidence of an adverse employment action. The evidence favorable to the jury's finding of an adverse employment action, which was not considered by the trial court, included evidence that after plaintiff asked the supervisor to refrain from making derogatory remarks about women and homosexuals, the employee received warning notices based on false charges and was excluded from meetings, and the supervisor continued to use offensive language despite being asked to stop. Finally, the Court of Appeal affirmed that under FEHA, an individual supervisor can be held personally liable for retaliation.

Plaintiff John Singleton was hired in February 2002. He was suspended and ultimately terminated on December 27, 2002 for making a comment about bringing a gun to work and shooting people if he had to work on Christmas. The plaintiff sued, claiming that his coworkers had repeatedly taunted him with sexually themed comments, and that these comments constituted harassment "because of ... sex." He claimed he also made frequent verbal complaints to his supervisors, but was always told to just ignore the taunts.

The trial court granted summary judgment in favor of the defendant employer on the plaintiff's FEHA-based claims, but the appeals court reversed, finding that plaintiff had raised genuine issues of material fact regarding whether he was sexually harassed, whether he reported the harassment to his supervisors, and whether action was taken to correct and eliminate the harassment. The court reasoned that the plaintiff's testimony about his coworkers' graphically sexual comments to him would, if believed, show that he experienced a hostile environment "because of [his] sex." Because the coworkers' comments would "challenge [him] as a man," thus attacking plaintiff's heterosexual identity, they constituted discrimination "because of ... sex." Singleton v. U.S. Gypsum Co., 2006 DJDAR 8758 (2d Dist., Div. 8, July 3, 2006).

Under state and federal law, employers have an affirmative duty to provide "reasonable accommodation" for "disabled" workers. This obligation includes a requirement to engage in a good faith "interactive process," in which the parties discuss the employee's limitations and explore possible accommodations.

The recent California appellate decision of Gelfo v. Lockheed Martin Corp., addressed a common dilemma for employers -- what to do when an employee claims he is "100% healthy" but the written medical restrictions contained in his file tell a different story.

In Gelfo, the plaintiff had suffered a back injury and obtained workers compensation benefits based on medical reports stating that he was "permanently disabled" and restricted from "prolonged sitting or standing." Within a month of settling his workers compensation claim for a lump sum cash payment, however, the employee requested rehire on the ground that he was now totally recovered.

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Governor Schwarzenegger recently signed a bill, AB 1825, which requires all California employers with 50 or more employees to provide two hours of sexual harassment training to all supervisors once every two years. Specifically, supervisory employees employed as of July 1, 2005 must be given two hours of sexual harassment training by the deadline of January 1, 2006. (However, employers who have already provided sexual harassment training to their supervisory employees after January 1, 2003, do not need to comply with the January 1, 2006 deadline.) Any "new supervisory employees" must be given two hours of sexual harassment training within six months of their assumption of a supervisory position. Thereafter, employers are required to give their supervisory employees the sexual harassment training once every two years. To the extent there is a question of whether or not an individual qualifies as a supervisor, employers should err on the side of caution and provide the sexual harassment training. Under other California statutes and case law, the term "supervisor," has been defined very broadly. See e.g., Gov't Code § 12926(r).

The training must consist of "information and practical guidance regarding the federal and state statutory provisions concerning the prohibition against and the prevention and correction of sexual harassment and the remedies available to victims of sexual harassment." Training should include practical examples aimed at instructing supervisors in the prevention of harassment. Those who provide the training must have "knowledge and expertise in the prevention of harassment, discrimination and retaliation."

Failure to provide the training does not, in and of itself, result in strict liability for the employer in the event an employer is sued for sexual harassment. While the specific statutory penalty only consists of an order from the FEHC to comply, questions abound as to the legal effect of noncompliance in areas such as negligence, failure to take reasonable steps to prevent harassment, representative action liability under Business and Professions Code § 17200 claims. Whether or not such an argument would prevail is currently up in the air and will be decided by the courts.