EEOC Says Federal Anti-Discrimination Law Protects Transgender Employees

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This week, the Equal Employment Opportunity Commission (EEOC) issued a ruling giving transgender individuals protections against discrimination in the workplace, concluding that "intentional discrimination against a transgender individual because that person is transgender is, by definition, discrimination 'based on...sex' and such discrimination...violates Title VII."  For California employers, discrimination against transgender employees and job applicants has been prohibited since 2004, when the Legislature passed the Gender Nondiscrimination Bill of 2003 and in so doing amended the Fair Employment and Housing Act to specifically include transgender people.  But California is in the minority of states, as only fifteen other states prohibit employment discrimination based on gender identity.  No federal court has held that Title VII's anti-discrimination provisions apply to transgender people, but the practical effect of the EEOC's ruling is transgender people are now protected by federal law and have legal recourse if they are denied a job or fired because they are transgender.

The ruling came as a result of a discrimination complaint filed by a transgender woman who was denied a job as a ballistics technician at the Walnut Creek, California laboratory of the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives.  The applicant was a veteran and former police detective, and initially applied for the position as a male and was told that she was virtually guaranteed the job.  After she disclosed her gender transition in the middle of the hiring process, the applicant was told that funding for the position had been cut, and subsequently learned that someone else had been hired for the job.

Even though the complaint was brought against a federal agency, the EEOC's ruling applies to both public and private employers alike.  California employers should have already taken measures to ensure against discrimination, including discrimination against those who are transgender.  But given yesterday's decision, companies in all fifty states - including California employers with operations in other states - should take steps to prevent such discrimination.  For example, employers should make sure that "gender identity" is part of the existing company nondiscrimination and anti-harassment workplace policies, and strive to create a non-discriminatory environment in the workplace so as to avoid costly litigation.

Enforcement of Attendance Policy Does Not Violate ADA Where Attendance is Essential Function

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This week the Ninth Circuit held that where attendance is an essential function of the job (isn't it always?), an employer's enforcement of its attendance points policy as to a disabled employee does not constitute a failure to reasonably accommodate under the ADA.  In this particular case, the employee was a neonatal intensive care nurse who had an abominable attendance record due to a multitude of stated reasons, ranging from fibromyalgia to personal life issues.  Even though she worked part-time and only a couple of shifts per week, she was continually absent.  She also took a variety of leaves of absence, all accommodated by her employer.  The employer had an attendance policy that allowed up to five unplanned absences in a rolling 12 month period.  This employee regularly exceeded the limit and had a history of performance discipline for her unexcused absences.  The employer quite reasonably tried to work with the employee to save her, allowed several exceptions from the policy for her, and gave her numerous chances to improve her attendance and escape termination.  The employee nonetheless did not improve her attendance and admittedly continued to exceed the allowed unplanned absences under the attendance policy (she was even absent for a planned meeting to discuss her attendance).  She requested that her employer except her from the attendance policy and essentially allow her uncapped unplanned absences, apparently as a "reasonable accommodation" for some sort of disability.  The employer did not agree.  She was ultimately terminated (duh).  Not to be deterred, she filed a lawsuit claiming the employer violated her ADA rights by not excepting her from the attendance policy as a reasonable accommodation under the ADA.   

In the lawsuit, the employer did not dispute that the employee was disabled.  The dispute focused instead on whether the employer had a duty to except the employee from the attendance policy as a reasonable accommodation.  The trial court said no and granted the employer summary judgment.  The employee appealed to the Ninth Circuit, which agreed with the trial court.  The Ninth Circuit held that the employer had adequately established that regular attendance is an essential function of the position of a neonatal ICU nurse and that an employer is not required by the ADA to relieve a disabled employee from essential functions as an accommodation.  The case is Samper v. Providence St. Vincent and the decision is here. 

Will Being Unemployed Be a New Protected Class?

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State and federal lawmakers are growing increasingly concerned about how our economy is making it difficult for long term unemployed workers to get back into the workforce.  As a result, there is a movement to make being unemployed a new protected class.  With a larger than normal percentage of voters being unemployed, you can bet this will be popular with some politicians up for re-election in November. 

California is one of a number of states where legislation has been introduced to protect unemployed workers and prohibit an employer from using a person's unemployed status at the time of applying for a job as a negative criteria in the hiring process.  The California bill is AB 1450 and was introduced in January.  In addition to the California bill, Congress has introduced HR 2501 in the House and S 1471, two bills that would provide similar protections on a nationwide basis. 

Currently, most protected status suits deal with harassment and termination of the employment relationship.  Hiring discrimination cases are relatively rare.  However, if any of these bills pass, employers covered by them should expect a wave of new litigation by unemployed applicants applied for positions but were not hired.  Employers will certainly have to alter their hiring practices and train those making the hiring decisions and doing the screenings, in order to ensure that they can defend against such suits. 

These bills will be something to keep an eye on in the coming months.  We will continue to keep you posted on this blog.

Supreme Court Confirms Ministerial Exception to Discrimination Laws

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On January 11, 2012 the United States Supreme Court issued its decision in Hosanna-Tabor v. Equal Employment Opportunity Commission, confirming a “ministerial” exception to discrimination laws.

Cheryl Perich worked as a “called” teacher for Hosanna-Tabor Evangelical Lutheran Church and School.  The term “called” means that she underwent a religious “commission” to teach for the school.  Perich developed narcolepsy and began the 2004-2005 school year on disability leave.  In January 2005 she notified the school principal that she would be able to report to work in February.  The principal responded that he had already hired another teacher to work in February.  The principal also expressed concern that Perich was not ready to return to the classroom.  The Church offered to pay a portion of Perich’s medical insurance costs in exchange for her resignation.  Perich refused to resign and told the principal she had spoken with an attorney and intended to assert her legal rights.  The Church then terminated Perich for insubordination and disruptive behavior.

Perich next filed a charge with the Equal Employment Opportunity Commission alleging she was terminated in retaliation for threatening to file a lawsuit in violation of the Americans with Disabilities Act.  At the District Court level Hosanna-Tabor argued that the lawsuit was barred by the “ministerial” exception to the ADA provided by the First Amendment.  The District Court agreed and granted summary judgment in Hosanna-Tabor’s favor.  The Sixth Circuit Court of Appeals vacated that decision because it found that Perich was not a minister under the exception.

The U.S. Supreme Court overturned the Court of Appeals’ decision and held that there is a ministerial exception to the ADA and that Perich was included within that exception.  The Supreme Court explained that the Free Exercise and Establishment Clauses of the First Amendment provide a “ministerial” exception to the ADA.  The Court wrote that imposing an unwanted minister on a religious group infringes on the group’s right to shape its own faith and mission through its appointments.  The Court further explained that Perich was a minister because she had a significant amount of religious training followed by a formal religious commissioning by the school, she held herself out as a minister, and her job duties included conveying the Church’s message in religious instruction.  Therefore, the Court concluded that Perich fell within the “ministerial” exception and could not make a discrimination claim against Hosanna-Tabor.

The Court’s ruling is a positive one for religious organizations.  It assures them a greater freedom to make employment decisions.  However, the Court did not provide much guidance regarding what organizations qualify as a “religious organization” or which employees would qualify as “ministers” to fit within the “ministerial” exception.  Organizations that have concerns about whether they fit within this exception may want to consult with counsel before relying on the exception in making employment decisions.

California Court Applies Ministerial Exception to FEHA

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In Henry v. Red Hill Evangelical Lutheran, the plaintiff was a preschool teacher and the director of preschool education at a private preschool run by a Tustin, California Lutheran church.  The school terminated her employment after if found that the plaintiff was living with her boyfriend and raising their children together, without being married.  The school required that all students and teachers be "practicing Christians."  The school felt that the plaintiff's lifestyle was violating the church teaching and commitment to live as a practicing Christian.  It decided to end the employment relationship on this ground. 

The plaintiff, Sara Henry, subsequently sued and alleged that her termination violated the California Fair Employment and Housing Act 's prohibition against marital discrimination.  The Lutheran school argued that the lawsuit was barred because FEHA's definition of "employer" does not include a non-profit religious corporation.  The school further argued that Henry could not allege a common law wrongful termination action either in this situation, whether it is based on FEHA or the California Constitution.  The court agreed, holding that the ministerial exception to FEHA set forth in section 12926(d) of the Government Code barred the claim and that the California Constitution did not support the lawsuit either. 

This is one of the first California published opinions to discuss the ministerial exception to FEHA.  Although the case appears clear cut on its face, it is plausible that the decision may have been different if the plaintiff had been able to present evidence that the school was aware of other teachers/administrators who were not living their lives as "practicing Christians" in accordance with the principles of the school and church.  Religious institutions dealing with similar situations should be aware not only of the scope of coverage of the ministerial exception, but also that should apply their religious principles equally and fairly in order to receive a similar result as in Red Hill Evangelical Lutheran, under similar factual circumstances.  Lawyers advising religious institutions should understand that good plaintiffs' attorneys will attempt to be very aggressive in discovery proceedings to uncover evidence of unequal treatment. 

A copy of the full opinion is available here.

No Duty to Accommodate Employee Who Isn’t Qualified for Job

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In Johnson v. Board of Trustees, the Ninth Circuit elaborated on the limits of an employer’s duty to accommodate a disabled employee.  Trish Johnson was a special education teacher in Idaho with a history of depression and bipolar disease.  Johnson’s position required a state teaching certificate, which in turn required certified teachers to meet a minimum level of continuing education credits in a five year period.  When her contract came up for renewal in the fall of 2007, Johnson had not completed the continuing education requirements because she suffered a major depressive episode over the summer, so she petitioned the school board to seek provisional authorization from the state to allow her to teach temporarily without a license.  The Board denied her request because 1) she had five years to obtain the credits and 2) the Board only petitioned the state when there was no certified teacher available to fill a position.  A certified teacher was available and was hired.

Johnson brought suit for disability discrimination, a suit summarily dismissed by the trial court.  On review by the Ninth Circuit, the Court agreed that Johnson's claim should be dismissed.  The Court held that in order to prevail on a claim for disability discrimination or failure to accommodate, the plaintiff must establish that she was a "qualified individual with a disability."  To establish this, the plaintiff must show that she 1) has the experience, education and skills required by the job and 2) can perform the essential functions of the job, with or without a reasonable accommodation.  The Board argued that Johnson failed to establish that she met the requirements of the job, and there was therefore no need to accommodate her disability.  Johnson countered that because she could have obtained her teaching certificate with an accommodation of additional time, the Board was required to accommodate her ability to obtain her teaching certificate.  The Court disagreed, and held that there is no duty to accommodate an employee’s efforts to meet the job skills requirement.  By way of a straightforward example, the Court noted that under the EEOC guidelines, a law firm that requires incoming attorneys to be members of the bar need not accommodate a visually impaired attorney who fails to pass the bar exam.  On the other hand, the firm is required to provide a reasonable accommodation to a visually impaired –  but otherwise qualified – bar member.  Simply summarized, guidance by the EEOC “explicitly disclaims any requirement of providing reasonable accommodation to disabled individuals who fail to meet the job prerequisites on their own.” 
Since the job requirement itself was neither discriminatory nor had a disparate impact on disabled individuals, the district court’s ruling was allowed to stand.  The Johnson case is available here.

Individual Supervisors Not Liable for Military Service Discrimination

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On this Veteran's Day, employers are appropriately reminded that various laws prohibit discrimination against employees on account of military service.  One of these laws is California Military & Veterans Code Section 394.  This law prohibits employment discrimination against members of the armed forces because of their membership or service.  Yesterday, in a case of first impression, a California court addressed whether individual supervisors may be sued and held personally liable for discrimination under Section 394.  In Haligowski v. Superior Court (Pantuso), the plaintiff was a Lieutenant in the Navy and was called to active duty in Iraq during the course of his employment with defendants.  After returning from a 6 month tour of duty, plaintiff was informed his employment was terminated.  Unsurprisingly, plaintiff sued for discrimination.  He sued not only his employer, but also his immediate supervisors.  The individual supervisors asked the trial court to throw out the claims against them individually, but the trial court refused, holding that Section 394 allows for personal liability against individual supervisors.  The supervisors appealed.

On appeal, the California appellate court reversed, holding that Section 394 only allows for liability against an employer, not against individual supervisors.  The court reasoned that although Section 394 prohibits discrimination by any "person," that does not necessarily mean that liability may be imposed against any "person."  The court explained that California's primary law prohibiting employment discrimination, FEHA, similarly prohibits discrimination by any person, yet it is well-established that only employers (not individual supervisors) may be held liable for discrimination under FEHA.  The court held that there was no reason to treat employment discrimination under Section 394 any differently.

To be clear, the court in no way addressed the propriety of the employee's claims against the employer, much less held that the employer acted properly in terminating the employment relationship.  The court simply held that the employee would have to pursue his claims only against the employer and not against his individual supervisors. 

A Little Harassment Does Not Equal a Hostile Work Environment

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In an unusually helpful ruling in favor of a California employer, the Fourth District Court of Appeal upheld an Orange County trial court’s decision to throw out a jury verdict finding sexual harassment.

In Brennan v. Townsend & O'Leary, Plaintiff Stephanie Brennan started with advertising agency Townsend & O’Leary as an assistant media planner in 1991 and rose steadily in the agency until she became an advertising supervisor and vice-president in January 2005.  Brennan testified at trial that although she was close to agency owner Steve O’Leary – who was “like a second father” – and his wife, in 1999 the agency hired a senior vice president media director, and the corporate environment began to change.  Brennan told the jury that she regularly confided in O’Leary and he asked her about her personal and dating life.  She testified to a variety of sexually explicit conversations both with O’Leary and more generally at executive meetings during 2000 and 2001. She described a number of Christmas parties featuring off-color Santas in 2002 or 2003.  Finally, in August 2004, Brennan inadvertently obtained an email written by individual co-defendant Scott Montgomery referring to Brennan as “big-titted” and “mindless.”  Understandably, Brennan complained about the email, a complaint that resulted in a written reprimand and warning issued to Montgomery.  In addition, Brennan sought out and talked to current and former agency employees to find other examples of sexual harassment.  In the Fall of 2004, Brennan told O’Leary that other employees had harassment complaints, but that they would be unwilling to speak with him.  She threatened to leave the agency.  O’Leary repeatedly asked Plaintiff to stay with the agency, to cooperate in investigating sexual harassment with an outside investigator, and to “restore” the company environment.  Brennan responded that she wished to leave and that she expected a compensation package for her “constructive termination.”  When she did not get the expected package, Brennan told O’Leary that she was going to “move on” with her attorney and gave him a letter from her lawyer in October 2004.  In November, Brennan refused to cooperate with the outside investigator the agency hired to investigate sexual harassment and finally in January she submitted her written resignation.

The jury concluded that Brennan was the victim of sexual harassment and awarded $200,000 from the agency, and $50,000 from individual defendant Montgomery, author of the offensive email.  The trial judge threw out the verdict, holding that there was no substantial evidence to support a finding of hostile work environment harassment.  The Court of Appeal agreed, ruling that as a matter of law, O’Leary’s evidence was insufficient to meet the “severe or pervasive” standard necessary to support a finding of hostile work environment.  The court explained:  “There is no recovery for harassment that is “occasional, isolated, sporadic or trivial," and “an employee seeking to prove sexual harassment based on no more than a few isolated incidents of harassing conduct must show that the conduct was ‘severe in the extreme.’”

The Court quickly dismissed any suggestion that the behavior Brennan complained of was “severe” and focused instead on whether it was “pervasive.”  The Court went on to note that the only harassment directed at O’Leary personally was the single “rude, unprofessional” email referring to her as a “big-titted, mindless one.”  In addition, she witnessed three sexually offensive incidents over three years that were directed at others.  “Such evidence simply does not show a concerted pattern of harassment.”  The Court was equally unimpressed by evidence of Steve O’Leary’s personal conversations of Brennan’s personal life, many of which the plaintiff admitted were not unwelcome of offensive, and the third-party complaints of harassment Brennan uncovered in her personal investigation.  Simply put, the Court found that the evidence was “not enough” to support the verdict.

While the Brennan decision is a distinct “win” for employers and the defense bar, employers should remain wary:  the jury believed the plaintiff’s testimony and awarded $250,000 in damages to her.  What is more, one judge disagreed and wrote a dissenting decision.  The defendants eventually prevailed, but no doubt only after a costly and likely painful fight that could have been avoided had no inappropriate workplace conduct occurred.

California Governor Vetoes Several Bad Employment Bills, But Signs Law Limiting Use of Credit Reports and a Few Others

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In pleasant news for California employers, Governor Brown vetoed several unappealing employment bills this past weekend.  The bills he vetoed include (1) AB 267, which would have invalidated forum selection and choice of law provisions in employment contracts with California employees, (2) AB 325, which would have required California employers to provide bereavement leave, and (3) SB 931, which would have imposed new requirements for use of payroll cards.  That is the good news.

The bad news is that Governor Brown signed into law AB 22, which limits California employers’ ability to use credit reports for employment purposes.  Under the new law, employers (with the exception of certain financial institutions) are prohibited from obtaining or relying on credit reports for applicants and employees, unless the report is sought in relation to (1) a position in the California Department of Justice; (2) a managerial position (defined as a position that qualifies for the executive exemption from overtime); (3) a sworn peace officer or other law enforcement position; (4) a position for which credit information is required by law to be disclosed or obtained; (5) a position that involves regular access (other than in connection with routine solicitation of credit card applications in a retail establishment) to people’s bank or credit card account information, social security number, and date of birth; (6) a position in which the employee would be a named signatory on the employer’s bank or credit card account, authorized to transfer money on behalf of the employer, or authorized to enter into financial contracts on behalf of the employer; (7) a position that involves regular access to cash totaling $10,000 or more of the employer, a customer, or client during the workday; and (8) a position that involves access to confidential or proprietary information (defined as a legal “trade secret” under Civil Code 3426.1(d)).

Even if the employer is permitted to obtain a credit report under one of the exceptions outlined above, the employer must first provide written notice to the applicant or employee, specifying the permissible basis for requesting the report and providing a box for the employee/applicant to check off to request a copy of the report, which must be provided free of charge and at the same time the employer receives its copy of the report.  If employment is denied based on information in a credit report, the employer must advise the applicant/employee and provide the name and address of the credit reporting agency that supplied the report.

Other labor and employment legislation signed into law by the Governor in the last few days includes the following:

SB 459 (Misclassification of Independent Contractors):  This new law creates stiff penalties for willful misclassification of employees as independent contractors.  The law defines “willful” as “voluntarily and knowingly misclassifying” an individual.  The law also makes it unlawful for an employer to charge an individual who has been willfully misclassified any fees or other deductions from compensation if those fees and deductions (e.g. for licenses, space rental, equipment) would have been prohibited had the individual been properly classified as an employee. In the event of a finding of willful misclassification, penalties may be assessed in the range of $5,000 to $25,000 per violation.  Additionally, an employer in violation may be ordered to display prominently on its Internet web site (or other area accessible to employees and the general public) a notice that explains the employer has been found guilty of committing a serious violation of the law by willfully misclassifying employees, along with other prescribed information. The new law also imposes joint and several liability on individuals who, for money or other valuable consideration, knowingly advise an employer to treat an individual as an independent contractor to avoid employee status.  Excepted from liability are employees who provide advice to their employer, and licensed attorneys providing legal advice to the employer.

AB 469 (Notice of Pay Details):  This new law requires employers to provide each employee, at the time of hire, with a notice that specifies (1) the pay rate and the basis, whether hourly, salary, commission or otherwise, as well as any overtime rate, (2) allowances, if any, claimed as part of the minimum wage, including meals or lodging, (3) the regular payday, (4) the name of the employer, including any “doing business as” names used by the employer; (5) the physical address and telephone number of the employer’s main office or principal place of business, and a mailing address if different, and (6) the name, address and telephone number of the employer’s workers’ compensation carrier.  The employer must notify each employee in writing of any changes to the information set forth in the notice within 7 days of the changes, unless such changes are elsewhere reflected on a timely wage statement or other writing required by law to be provided.

AB 887 (Gender Identity and Expression):  This new law amends the Fair Employment and Housing Act (as well as various other laws) to make clear that discrimination on the basis of gender identity and “gender expression” is prohibited.  Gender expression refers to a person’s gender-related appearance and behavior, whether or not stereotypically associated with the person’s assigned sex at birth.  The new law also requires employers to allow an employee to appear or dress consistently with the employee’s gender expression.

AB 1236 (E-Verify):  This new law prohibits the state, or a city or county, from requiring employers to use E-Verify as a means of verifying employees they hire are authorized to work in the United States.

AB 243 (Farm Labor Contractors):  This new law requires employers who are farm labor contractors to disclose to employees the name and address of the legal entity that secured the employer’s services.  This information must be disclosed as part of the employees’ itemized wage statements required by Labor Code section 226.

SB 126 (Agricultural Labor Relations):  This new law deals with petitions objecting to the conduct of an election before the Agricultural Labor Relations Board and specifies that where the ALRB refuses to certify an election because of employer misconduct that, in addition to affecting the results of the election, would render slight the chances of a new election reflecting the free choice of employees, the labor union shall be certified as the exclusive bargaining agent for the bargaining unit.

Unless otherwise specified most new laws take effect January 1, 2012.  California employers will want to familiarize themselves with these new laws as applicable to their workforces and operations, and revise policies and procedures accordingly.

Court Says “Me Too” Evidence Admissible in Harassment Case

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Last week, a California court held that evidence of alleged inappropriate gender-related conduct directed at female employees outside the plaintiff's presence (and of which the plaintiff was not even aware) was admissible to prove the plaintiff was sexually harassed and fired because of her gender. In Pantoja v. Anton, the plaintiff sued her former employer, an attorney, for (among other things) sexual harassment and gender discrimination, alleging she was subjected to a hostile work environment and fired because she is female. The case went to trial and the trial judge granted the employer's motions to keep out evidence of profanity and alleged touching directed at other female employees. The judge ruled that unless the conduct occurred in the plaintiff's presence or somehow affected the plaintiff, it was not admissible. As for evidence directed to the plaintiff, she alleged that the defendant employer touched her inappropriately and regularly used profanity around her, some of it arguably gender based. The employer testified that he never touched the plaintiff sexually and that while he may have used profanity, he never directed it at the plaintiff. Instead, he might use profanity when describing a situation, which is different than calling someone a profane name or similar use of profanity. The jury ultimately found for the employer and against the plaintiff on her claims for harassment and discriminatory firing. The plaintiff appealed, arguing that the trial court erroneously excluded "me too" evidence.

The appellate court agreed with the plaintiff and held that the trial judge had abused his discretion in excluding "me too" evidence of harassing conduct directed at female employees other than the plaintiff. The court held that it did not necessarily matter if the conduct did not occur in the plaintiff's presence or otherwise directly affect the plaintiff. The court held that such evidence was relevant to show the alleged harasser's "intent." Interestingly, "intent" generally is not relevant to proving harassment. Harassment can occur and be proven regardless of whether the harasser intends his conduct to be harassing. This is what is commonly referred to as the "inoccent harasser." What is relevant is the victim's perception (and the perception of an objectively reasonable person) of the conduct. Thus, the court's ruling that harassment towards others is relevant to prove the harasser's intent is at odds with fundamental harassment law. Now, to be clear, the plaintiff also had a discrimination claim based on allegations she was fired because of her gender. Intent is, of course, relevant to proving a discrimination claim because the decision-maker's intent behind the termination decision is critical. But the courtnonetheless treated the two claims the same for purposes of analysis of the admissibility of this "me too" evidence.

This case is a good reminder of the dangers of "me too"evidence in the harassment arena and of the murkiness in this area. Employers should continue to fight for exclusion of "me too" evidence on the grounds that it is inadmissible character evidence that cannot be used to prove the alleged harasser's propensity to engage in harassing behavior.