Employment Law Update - New Cases
Posted by Brandy Thompson Cody
Ash v. Tyson Foods, Inc., 126 S.Ct. 1195 (Feb. 21, 2006), holding that racial animus may be evidenced by the use of the term “boy” regardless of whether the speaker uses a racial modifier. Plaintiff, an African-American, was denied a promotion and sued for racial discrimination under Title VII. Plaintiff was awarded compensatory and punitive damages by a jury. However, upon defendant’s Rule 50(b) motion, the trial court ordered a new trial. The Eleventh Circuit affirmed the granting of a new trial. On appeal to the U.S. Supreme Court, the Court indicated that the Eleventh Circuit’s affirmation of a new trial may be correct, it erred in holding that the use of the word “boy” alone was not evidence of discrimination unless it was modified with a racial classification like “black” or “white.” The Court stated that the word “boy” standing alone is not always benign. The Court advised that the speaker’s meaning depends on various factors including context, inflection, tone, local custom and historical usage. The case was remanded for proceedings consistent with the Court’s clarification.
Comer v. Micor, Inc., et al. 436 F.3d 1098 (9th Cir. Feb. 1, 2006), holding that a non-signatory to arbitration agreement entered into by an ERISA plan is not required to arbitrate his claims. Smith Barney and Micor trustees entered into an agreement to manage the company’s investments. The agreement contained an arbitration clause providing that “all claims or controversies” between Smith Barney and the trustees “concerning or arising from” any trustees accounts managed by Smith Barney must be submitted to binding arbitration. Comer, a participant in the plan, sued Smith Barney for breach of fiduciary duties. The court held that because Comer had not signed the agreement nor had he “knowingly exploited” the agreement containing the arbitration clause he was not equitably estopped from avoiding the arbitration provision.
Gober v. Ralphs Grocery Co., 137 Cal.App.4th 204 (Mar. 1, 2006), holding that a ratio of 6 to 1 punitive to compensatory damages is constitutional maximum that can be awarded in sexual harassment case. Plaintiffs alleged sexual harassment by store manager with a long history of prior complaints from employees and customers about his behavior. Ralph’s held liable for punitive damages based on advanced knowledge of supervisor’s unfitness in conscious disregard of employees’ right to be free from sexual harassment. In addition to varying amounts of compensatory damages, the jury awarded $5 million in punitive damages to each of the 6 plaintiffs (ranging from a ratio of 25-1 to 100-1). The Court of Appeal reduced the punitive damage award to a 6-1 ration for each Plaintiff as the constitutional maximum under the facts of this case. The court looked to (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm to plaintiff and punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized in comparable cases. Thus, the court looked at what Ralph’s knew or should have known and what it did or failed to do with regard to the harasser’s prior misconduct in order to determine maximum ratio of punitive damages as 6-1.
Harman v. City and County of San Francisco, 136 Cal.App.4th 1279 (Feb. 22, 2006), holding that Civ. Code §§ 51.7 and 52.1 are not part of the Unruh Civil Rights Act and may be asserted as a separate cause of action in the employment context. Plaintiff may bring claims under Civ. Code §§ 51.7 and 52.1 for threats and intimidation in the workplace. Plaintiff alleged he was subject to retaliation, violence, threats and intimidation in the workplace because of his race. In addition to claims for wrongful termination in violation of public policy and retaliation, he asserted claims for violation of Civil Code section 51.7 and 52.1. Defendant demurred on the grounds that those sections are part of the Unruh Act and that under Rojo v. Kliger, the Unruh Act does not apply to employment cases. The court held that §§ 51.7 and 52.1 are not part of the Unruh Act and that Rojo does not bar employment cases from being premised on these statutes.
Hulteen v. AT&T Corp, 441 F.3d 653 (9th Cir., Mar. 8, 2006), holding that the Pregnancy Discrimination Act (PDA) which amended Title VII effective in 1979 does not apply to female employees and retirees of telecommunications company who allege discrimination in reduction of their retirement benefits because they were granted less service credit for their pre-1979 leaves than employees on temporary disability leaves, since nothing in the text of the PDA indicates clear congressional intent that statute was intended to be applied retroactively.