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1 Institute For Corporate Counsel RECENT DEVELOPMENTS IN EMPLOYMENT LAW Cynthia E. Gitt New York Washington D.C. Boston Los Angeles San Francisco Dallas.

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Presentation on theme: "1 Institute For Corporate Counsel RECENT DEVELOPMENTS IN EMPLOYMENT LAW Cynthia E. Gitt New York Washington D.C. Boston Los Angeles San Francisco Dallas."— Presentation transcript:

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2 1 Institute For Corporate Counsel RECENT DEVELOPMENTS IN EMPLOYMENT LAW Cynthia E. Gitt New York Washington D.C. Boston Los Angeles San Francisco Dallas Miami Newark Stamford Baltimore

3 IN 2000, THE CALIFORNIA SUPREME COURT CHOSE ITS OWN PATH EMPLOYERS WITH REMOVAL OPTIONS HAVE A DIFFICULT CHOICE

4 3 ARMENDARIZ v. FOUNDATION HEALTH SERVICES UNDER STATE LAW, MANDATORY AGREEMENTS THAT ENCOMPASS STATUTORY DISCRIMINATION CLAIMS WILL BE ENFORCED IF SPECIFIC STANDARDS ARE MET

5 4 THE CALIFORNIA SUPREME COURT SPECIFICALLY ANALYZED AND REJECTED, AT LEAST AS TO STATE CLAIMS, THE CONTRARY CONCLUSION OF THE NINTH CIRCUIT IN DUFFIELD

6 5 IN ORDER TO BE ENFORCABLE (CONSCIONABLE) AS TO STATUTORY/DISCRIMNATION CLAIMS, THE ARBITRATION AGREEMENT MUST DO ALL OF THE FOLLOWING:

7 6 AGREEMENT MUST PROVIDE FOR:  NEUTRAL ARBITRATORS  MORE THAN MINIMAL DISCOVERY  WRITTEN AWARD, SUFFICIENT FOR JUDICIAL REVIEW  ALL RELIEF AVAILABLE IN A COURT ACTION  THE EMPLOYEE NOT TO PAY UNREASONABLE COSTS OR ANY ARBITRATORS’ FEES OR EXPENSES

8 7 REQUIREMENTS NOT ADDRESSED IN ARBITRATION AGREEMENT MAY BE IMPLIED INTO THE AGREEMENT

9 8 IF AGREEMENT CONTAINS UNCONSCIONABLE TERMS, THE COURT MUST DECIDE WHETHER TO EXCISE THE OFFENSIVE PROVISIONS OR INVALIDATE THE CONTRACT Is the central purpose of the agreement tainted with illegality? Can the offensive provision be stricken, or is reformation required to eliminate unconscionability?

10 9 FOUNDATION HEALTH PLAN’S ARBITRATION AGREEMENT WAS FOUND UNENFORCABLE: It unconscionably limited remedies to back pay It unconscionably lacked mutuality because it implied that the employer but not the employee could go to court to enforce claims related to trade secrets or non-competition agreements

11 10 AFTER ARMENDARIZ, MOST COURTS TRY TO ENFORCE AGREEMENTS THAT DO NOT LIMIT REMEDIES OR REQUIRE EMPLOYEES TO PAY SUBSTANTIAL COSTS

12 11 EXAMPLES OF UNCONSCIONABLE PROVISIONS: Limitation of Back Pay to Six Months (Pinedo v. Premium Tobacco) Requirement that employee pay all initial costs of arbitration (Pinedo) Requirement that even prevailing plaintiff pay employer’s costs if go to administrative agency instead of arbitration (Shubin v. William Lyon Homes)

13 12 COURTS OF APPEAL HAVE APPROVED JAMS AND AAA EMPLOYMENT DISPUTE RULES AS PROVIDING NEUTRALITY AND FAIR DISCOVERY

14 13 U.S. DISTRICT COURT ENJOINS REQUIREMENT OF ARBITRATION AGREEMENT FOUND CONSCIONABLE BY STATE COURT OF APPEAL. DUFFIELD STILL LAW OF NINTH CIRCUIT (EEOC v. Luce, Forward, Hamilton & Scripps)

15 14 UNITED STATES SUPREME COURT WILL HEAR NINTH CIRCUIT CASE, WHICH FOUND EMPLOYMENT ARBITRATION AGREEMENTS NOT SUBJECT TO THE FAA Circuit City Stores v. St. Clair Adams

16 15 ARBITRATION vs. REMOVAL TO FEDERAL COURT: Who will be hearing the case? No jury Conventional wisdom that arbitration awards less likely to be unreasonable Conventional wisdom that arbitration more expeditious Cost to employer of arbitration Question as to nature of judicial review

17 16 SECOND DISTRICT COURT OF APPEAL RULED THAT ACCEPTANCE OF ARBITRATION AGREEMENT IS IMPLIED BY CONTINUED EMPLOYMENT Craig v. Brown & Root)

18 17 CALIFORNIA SUPREME COURT PERMITS EMPLOYERS, TO CHANGE, WITH ADEQUATE NOTICE, “UNILATERALLY ADOPTED” EMPLOYMENT POLICIES OF INDEFINITE DURATION Asmus v. Pacific Bell

19 18 SIX MONTHS ADEQUATE NOTICE TO RESCIND EMPLOYMENT SECURITY POLICY FOR MANAGERS

20 19 CAN EMPLOYERS GET SUMMARY JUDGMENT IN DISCRIMINATION CASES?

21 20 Evidence that an employer’s explanation may be pretextual, combined with employee’s prima facie case, may defeat summary judgment even without independent evidence that actual motive was discriminatory Reeves v. Sanderson Plumbing

22 21 Reaffirms analysis of St. Mary’s Honor Society v. Hicks that pretext may itself support inference of discrimination

23 22 Reeves ONCE AGAIN, BAD FACTS MAKE BAD LAW

24 23 SUPREME COURT MINIMIZES SIGNIFICANCE OF AGE OF DECISION- MAKERS AND OTHER MANAGERS, AND FOCUSES ON “AGEIST REMARKS” OF EMPLOYEE’S SUPERVISOR Reeves

25 24 SUPREME COURT ASSURES THAT THIS DECISION DOES NOT NULLIFY JUDGMENT AS MATTER OF LAW IN EMPLOYMENT CASES (But at least one justice says it will be the rare case)

26 25 [Summary] Judgment Available “If the record conclusively revealed some other, nondiscriminatory reason for the employer’s decision, or if the plaintiff created only a weak issue of fact as to whether the employer’s reason was untrue and there was abundant and uncontroverted independent evidence that no discrimination has occurred.”

27 26 FACTORS FOR EVALUATING JUDGMENT AS A MATTER OF LAW: Strengths of plaintiff’s prima facie case Probative value of proof that employer’s explanation false Any other proper evidence that supports an employer’s case

28 27 CALIFORNIA SUPREME COURT CHOSE THE CAVEAT RATHER THAN THE HOLDING OF REEVES IN ITS OWN DISCUSSION OF SUMMARY JUDGMENT CASES Guz v. Bechtel National, Inc.

29 28 GUZ HAD EVIDENCE THAT HIS “LAY-OFF” FOR COST REASONS WAS PRETEXTUAL AND COMPANY DID NOT FOLLOW ITS OWN POLICIES COMPANY’S “LEGITIMATE BUSINESS EXPLANATION” FOR CHOOSING YOUNGER WORKERS WAS “SUBJECTIVE”

30 29 CALIFORNIA COURT HELD THAT INFERENCE OF INTENTIONAL DISCRIMINATION CANNOT BE DRAWN SOLELY FROM EVIDENCE THAT EMPLOYER LIED ABOUT ITS REASONS: EVIDENCE OF DISCRIMINATION REQUIRED Guz

31 30 IN ANALYZING THE AGE DISCRIMINATION CLAIM, CALIFORNIA SUPREME COURT FOCUSED ON NUMBERS AND AGES OF REMAINING PEOPLE Guz

32 31 COURT FOUND THAT PLAINTIFF’S STATISTICS “MANIFESTLY LACKS SUFFICIENT PROBATIVE FORCE” IN LIGHT OF BECHTEL’S “STRONG AND UNREBUTTED SHOWING THAT IT TOOK ITS ACTIONS FOR NON- DISCRIMINATORY REASONS” Guz

33 32 RE STATISTICAL EVIDENCE: Employee pool affected by lay-offs "TOO MINISCULE" TO DEMONSTRATE A STATISTICALLY RELIABLE PATTERN OF DISCRIMINATION Employees with DIFFERENT JOB SKILLS COULD NOT BE INCLUDED IN SAME STATISTICAL POOL Since retained employees had different skills than plaintiff, could not make statistical conclusion

34 33 GUZ BECAUSE EMPLOYER DID VIOLATE ITS OWN LAY-OFF POLICY, PLAINTIFF WAS PERMITTED TO PROCEED ON BREACH OF CONTRACT WRONGFUL TERMINATION CLAIM

35 34 HOWEVER, COURT STATED THAT ABSENT OTHER EVIDENCE, LONGEVITY, RAISES AND PROMOTIONS ARE THEIR OWN REWARDS: NOT A CONTRACTUAL GUARANTEE OF FUTURE EMPLOYMENT SECURITY Guz

36 35 DISABILITY DISCRIMINATION NOW A MAJOR FOCUS IN EMPLOYMENT CLAIMS, AND CALIFORNIA LAW NOW TOUGHER THAN ADA

37 36 EXAMPLES OF PROTECTED DISABILITIES :  Post-traumatic stress disorder (bank robbery at work) Jensen v. Wells Fargo  Compulsive Obsessive Disorder (obsessive rituals re bathing and grooming) Humphrey v. Memorial Hospitals

38 37 ACCOMMODATION REQUIREMENTS NOW SUBSTANTIAL AND ONGOING

39 38 EMPLOYEE HAS OBLIGATION TO REQUEST ACCOMMODATION, THUS INITIATING THE INTERACTIVE PROCESS, BUT EMPLOYER THAT KNOWS OF NEED FOR ACCOMMODATION HAS OBLIGATION TO OFFER IT Downey v. Crowley Marine Services Spitzer v. The Good Guys (quoting EEOC Guidelines)

40 39 Lower Performance Evaluations Continued Medical Leaves Observation That Previous Accommodations Do Not Resolve Problem May Require Employer To Inquire About Need for (Further) Accommodation

41 40 ACCOMMODATION REQUIRES MORE THAN TREATING DISABLED EMPLOYEE LIKE ANY OTHER JOB APPLICANT OR JOB BIDDER- AFFIRMATIVE ACTION REQUIRED Spitzer v. Good Guys

42 41 ABSENT UNDUE HARDSHIP, JOB RESTRUCTURING REQUIRED AS AN INITIAL ACCOMMODATION  Change in Hours  Part-time position  Working from home

43 42 WHERE JOB RESTRUCTURING OR OTHER ACCOMMODATION NOT EFFECTIVE, JOB REASSIGNMENT REQUIRED ABSENT UNDUE HARDSHIP

44 43 REASSIGNMENT NOT REQUIRED WHERE: No Position Exists No Vacancy in an Existing Position for Which the Disabled Employee Qualifies Reassignment Would Involve Promotion of Disabled Employee Reassignment Would Violate Rights of Another Employee under Collective Bargaining Agreement Spitzer v. Good Guys, Citing Federal Cases

45 44 BUT ABSENT COLLECTIVE BARGAINING AGREEMENT OR OTHER “UNDUE HARDSHIP”, REASSIGNMENT TO APPROPRIATE VACANT POSITION REQUIRED EVEN IF EMPLOYER MUST DEVIATE FROM ITS POLICIES

46 45 Barnett v. U.S. Air Plaintiff protected from policy allowing senior employees to bump Willis v. Pacific Maritime Assn. Seniority system embodied in collective bargaining agreement should not be interfered with Federal Law

47 46 ACCORDING TO NINTH CIRCUIT, DANGER TO ANOTHER EMPLOYEE DOES NOT CONSTITUTE UNDUE HARDSHIP UNDER ADA WITH RESPECT TO ASSIGNMENTS Echazabal v. Chevron USA CONFLICT WITH CALIFORNIA LAW?

48 47 SEXUAL HARASSMENT DISCHARGE OF OFFENDER NOT REQUIRED IF LESSER REMEDY IS EFFECTIVE Star v. West

49 48 SEX DISCRIMINATION EEOC finds exclusion of prescription contraceptives discrimination on basis of sex and pregnancy, where plan covered other drugs designed to prevent development of medical conditions

50 49 RETALIATION NINTH CIRCUIT HOLDS FAILURE TO PREVENT CO-WORKERS’ “SHUNNING” OF COMPLAINING EMPLOYEE CAN CREATE EMPLOYER LIABILITY FOR HARASSMENT Fielder v. United Airlines CALIFORNIA COURTS SAY EMPLOYER NOT RESPONSIBLE Thomas v. Department of Corrections

51 50 STATUTE OF LIMITATIONS NINTH CIRCUIT HOLDS THAT ANY ACT WITHIN LIMITATIONS PERIOD CAN “REVIVE” PRIOR ACTS UNDER CONTINUING VIOLATION THEORY Fielder v. United Airlines Morgan v. National Railroad O’Loghlin v. County of Orange

52 51 COVENANTS NOT TO COMPETE DISCHARGE OF EMPLOYEE WHO REFUSES TO SIGN UNLAWFUL NON- COMPETE COVENANT (NOT NECESSARY TO PROTECT TRADE SECRETS) VIOLATES PUBLIC POLICY D’Sa v. Playhut

53 52 WITNESSES AT EMPLOYEE INTERVIEWS NLRB RULED, IN A NON-UNION SETTING, THAT EMPLOYEE HAS RIGHT TO A CO-WORKER WITNESS IN AN INVESTIGATORY INTERVIEW THAT EMPLOYEE REASONABLY BELIEVES COULD LEAD TO DISCIPLINE Epilepsy Foundation

54 53 WAGE CLAIMS WAGE CLAIMS (e.g. Improper classification or overtime issues) MAY BE ASSERTED UNDER UNFAIR COMPETION LAW—BUSINESS & PROFESSIONS CODE § –Restitution may be sought even by non- affected claimant (i.e. no “standing”) without class action certification –Claims for disgorgement of profits or “fluid recovery” require class action certification

55 54 CYNTHIA E. GITT


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