The Pessimist's Guide to Employment Litigation: Where It (May Be) Headed, and How to Head It Off
August 14, 2012
For employment lawyers, the elements of an employment discrimination lawsuit are second nature: a plaintiff must belong to a protected class, the employer must make an adverse employment decision, and the employer must act based on the plaintiff’s protected status. And, for the most part, employment lawyers have mastered the art of defending clients against these claims and advising on strategies and policies to avoid them altogether or minimize the likelihood of success.
Accordingly, plaintiffs and their attorneys have taken to using more creative approaches. Since an ounce of prevention is worth a pound of cure, in writing this article we put on our “plaintiff” hats and tried to see the world through the eyes of someone who wants to bring a claim but can’t find a well-established way to do so. Hopefully, this out-of-body experience will allow our readers to plan for the future by analyzing claims that now seem remote and far-fetched, but may not seem so in the future.
Traditional discrimination claims require an affected employee to belong to a protected class based on race, gender, veteran status, or a number of other categories. Not so anymore. Over the past few years, the number of claims pursued based on associational discrimination has increased dramatically. In these claims, plaintiffs allege not that they belong to a protected class but that they associate with a member of a recognized protected class, and that their employers have discriminated against them on that basis. In many ways, this is a counterpart to the “reverse discrimination” claims that proliferated several years ago under which a plaintiff who did not belong to a protected class could claim that he or she suffered discrimination when an employer treated members of a protected class more favorably than the plaintiff.
Importantly, limited federal statutory authority exists for associational discrimination claims. The Americans with Disabilities Act prohibits “excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association.” 42 U.S.C. § 12112(b)(4). However, no corresponding statutory framework exists for associational claims under Title VII or the Age Discrimination in Employment Act, nor does comparable language appear in most state discrimination statutes.
Nonetheless, the United Stated Supreme Court acknowledged the associational discrimination theory in retaliation cases in Thompson v. North American Stainless, LP, 131 S. Ct. 863 (2011). There, a man whose fiancée filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) was later discharged by their common employer. He filed a lawsuit claiming retaliatory discharge, arguing that the employer discharged him in retaliation for his fiancée having filed an EEOC charge. The district court rejected this theory and granted a summary judgment to the employer.
The Supreme Court reversed the ruling. The Court found that the facts stated by plaintiff Thompson, if true, constituted an unlawful Title VII retaliation claim because Title VII prohibits an employer from taking an action that “well might have dissuaded a reasonable worker from making or supporting a charge” of discrimination, and a reasonable worker might not engage in protected activity if he or she knew it could affect the employment of a spouse or a significant other. The Court chose not to define with specificity which relationships would qualify for such protection, instead adopting a “zone of interests” test for the courts to use when evaluating these claims.
Courts also have recognized these claims in discrimination cases. In the Second Circuit case of Holcomb v. Iona College, 521 F.3d 130 (2d Cir. 2008), a white basketball coach claimed that his termination was motivated by the fact that his wife was black. In reversing the district court’s grant of summary judgment to the college, the court held that “an employer may violate Title VII if it takes action against an employee because of the employee’s association with a person of another race.” In so ruling, the court followed other circuits and concluded that an employee who suffered discrimination due to his association with a person of another race had actually suffered discrimination because of his own race and the fact that it was different from that of the other individual.
As courts begin to more widely recognize them, the limits of associational discrimination claims are being stretched and tested by plaintiffs’ attorneys nationwide. Fortunately for employers, federal courts are setting some limits. For instance, a court in Tennessee rejected a claim for associational discrimination based on an employee’s allegation that he suffered discrimination because he worked for a historically black university that paid the employees less than what their counterparts at the University of Tennessee earned. Ferrell v. Johnson, 2011 WL 1125907 (E.D. Tenn. Mar. 30, 2011) (“To conclude, Title VII prohibits racial discrimination; it does not mandate that all persons performing equal work receive equal pay.”). Likewise, a district court in Nevada granted a summary judgment against a black plaintiff who claimed that he was discriminated against by his employer based on his support for President Obama, who is biracial. Whitfield v. Trade Show Services, Ltd., 2012 WL 693569 (D. Nev. Mar. 1, 2012).
An employer typically rebuts a traditional discrimination claim, whether asserted under Title VII or state law, by showing that a plaintiff’s protected trait, such as age or race, was not the basis of the adverse employment decision. Jury instructions then usually remind a jury that an employer may terminate an employee for “a good reason, a bad reason, or no reason at all.”
But what happens when an employer can no longer rely on “bad reason” or “no reason” in defending against a discrimination claim? The class-of-one claim has existed in the equal protection context for years, protecting individuals from arbitrary and irrational decisions by governmental agencies. The Supreme Court recently reaffirmed the viability of this claim in Village of Willowbrook v. Olech, 528 U.S. 562 (2000). There, the Court reaffirmed that class-of-one claims were appropriate when “a plaintiff alleges that she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment.”
To maintain a class-of-one equal protection action, a plaintiff must show two things. First, a plaintiff must show that he or she was treated differently than others who are similarly situated in all material respects. Second, a plaintiff must show that the difference in treatment did not have a rational basis or was irrational and abusive. See, e.g., Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210 (10th Cir. 2011).
Because a class-of-one claim is premised on the protections afforded by the Fourteenth Amendment, courts have limited these claims to those involving actions taken by governmental actors. And because those claims essentially require the government to justify every action taken or not taken under certain circumstances, courts have been particularly wary to allow them to proceed in or extend to other contexts.
The very good news for employment lawyers is that so far courts have explicitly prohibited these claims in the employment context. In Engquist v. Oregon Dept. of Agriculture, 553 U.S. 591 (2008), the Supreme Court limited these claims. Recognizing the “crucial difference” between the government acting as a lawmaker and acting to manage its own internal operations, the Court held that class-of-one claims could not be brought to challenge employment decisions due to the “subjective and individualized” nature of those decisions, which involve “factors that are difficult to articulate and quantify.” Id. Other courts have confirmed that this extends categorically to public employment of all kinds, whether a merit-based or a civil service position. See, e.g., Alford v. Consolidated Government of Columbus, Georgia, 438 F. App’x 837 (11th Cir. 2011).
For now, private employers have additional protection, because a plaintiff can only allege this claim against a governmental actor and courts have prohibited it from being applied in the employment context. However, it is not difficult to see how the language and reasoning of these decisions could bleed over, albeit informally, into the private employment context. For example, employers are making “subjective and individualized” employment decisions less frequently. Employers use skills tests, objective promotion criteria, and other “blind” data, in large part to avoid the implication of any discriminatory motives. When an employer removes the subjectivity from employment decisions, however, then the employer’s discretion shrinks considerably, opening a door to challenge based on irrationality and bias. See, e.g., Umani v. Michigan Dept. of Corrections, 432 F. App’x 453 (6th Cir. 2011) (substantively analyzing a prisoner’s employment claim based on the employer’s failure to act according to well-established prison policy). Moreover, employers with employees who need state licensing could open themselves up to lawsuits based on the feedback given to those organizations regarding their employees. A doctor in New Jersey has already tried this tactic, filing a lawsuit against state authorities and claiming that the revocation of his medical license was improperly induced by his ex-wife and others. Zahl v. New Jersey Dept. of Law and Public Safety Div. of Consumer Affairs, 428 F. App’x 205 (3d Cir. 2011). Other employers who participate in disciplinary hearings may also be at risk.
Discrimination Based on Employment Status
Tucked away in the provisions of President Obama’s proposed American Jobs Act is a section that, if passed, would make it illegal to discriminate against the unemployed when making hiring decisions. The Senate version, introduced by Senator Harry Reid and titled the “Fair Employment Opportunity Act of 2011,” S. 1549, is essentially identical to the House bill, H.R. 12, introduced by Representative John Larson. The two bills would make it unlawful for an employer to refuse to hire an employee based on the employee’s status as unemployed. To date, those bills have not become law, nor have the proposed state versions in Connecticut, Michigan, Illinois, or Florida.
But the first laws aimed at providing protection for the unemployed have already passed in two states. In June 2011, New Jersey became the first state to pass a law that prohibited employers from publishing job advertisements that overtly discriminate against the unemployed. See N.J.S. 34:8B-1. New Jersey law now prohibits employers from “knowingly or purposefully” publishing an advertisement for a job vacancy within New Jersey that indicates that an employer will consider the potential employee’s current employment status. It does, however, contain an exception that allows an employer to consider only those applicants currently employed by that same employer. And, although the law does subject a company to a hefty fine for a violation, the law specifically disavowed a private cause of action.
In March 2012, Oregon followed, with Governor John Kitzhaber signing the “Fair Employment Opportunity Act,” S.B. 1548, into law. And in the same month, the District of Columbia passed the Unemployed Anti-Discrimination Act, Legisl. No. B19-0486 § 5(b), which is the first law in the nation to explicitly prohibit discrimination based on a person’s status as unemployed. While other states have yet to jump on the bandwagon, protecting the unemployed evidently is gaining strong support, with bills pending in several states, and other states are expected to pass similar protective laws.
So What’s an Employer to Do?
The strategies employers have already implemented in response to traditional discrimination suits will do much to protect employers should plaintiffs attack them under a new theory of discrimination like those discussed above. However, a few tips from the above scenarios can help strengthen these defenses.
First, attorneys should remind their clients to avoid learning extraneous information about employees or potential employees during the hiring, the promoting, or the terminating decision-making processes. Also, creating a thorough documentation system for employment decisions will help to avoid the specter of associational discrimination.
Second, attorneys can advise employers to review their policies to ensure that they retain some discretion in employment and promotion decisions. While objective criteria are good to prevent inadvertent discrimination and ensure the hiring of strong employees, employment policies should strongly convey the “at will” nature of the employment.
Finally, attorneys should counsel employers to make it a rule of thumb never to include anything about a person’s status as employed or unemployed in a job posting, and to not use that as a criterion for an employment decision. Of course, an employer can and should still evaluate why a potential hire is no longer employed, but the employer needs to avoid simply jumping to conclusions. In addition to the legal implications, an employer might just find a great employee that it would have otherwise overlooked.