Seventh Circuit Affirms Summary Judgment for Employer in Reverse-Race Discrimination Case

March 15, 2012 by Ambrose V. McCall

In Good v. University of Chicago Medical Center, No. 1102679 (7th Cir. 3/12/2012), Plaintiff Good appealed the summary judgment entered by a district court that tossed her claim of reverse-race discrimination. Plaintiff previously worked as a lead technologist in the medical center's radiology department. While admitting there were issues with her job performance, she asserted that her white race was the reason she was terminated rather than demoted as occurred with employees of other races. Because defendants had obtained summary judgment, the Seventh Circuit construed all facts and drew all inferences in favor of Plaintiff. The medical center used a four step corrective and progressive action policy, under which an employee who failed a performance improvement plan, ["PIP"], could be terminated. The policy manual, however, also stated that it was the policy of the employer "to demote [an] individual" who "cannot perform...her assigned job responsibilities" as a result of "her skills [] not [being] matched to the requirements of the job" or because the employee "lack[s]...motivation to perform up to standards." But unlike other employees, managers who worked in the radiology department were held to a higher standard based on their additional responsibilities. Though managerial employees could be terminated at any time, some managers were demoted rather than subjected to the harsher regime of corrective treatments which included PIPs, new probationary periods, or discharge. More ›

Another California Court Strikes down yet Another Arbitration Agreement

March 13, 2012 by David Ian Dalby

The employee sued his former employer alleging several claims under the California Fair Employment and Housing Act (“FEHA”). The employer filed a petition to compel arbitration based upon an agreement to submit employment-related claims to final binding arbitration as provided in  signed employment application, employment agreement and acknowledgment of receipt of the employee handbook. The trial court refused to compel arbitration because the arbitration agreement stated that the arbitration would occur pursuant to the applicable rules of the American Arbitration Association (“AAA”) in the state where employee was employed or was last employed. The trial court found that the employee was not provided with a copy of the controlling AAA rules, and was not advised how he could find or review them and provisions failed to identify which set of rules promulgated by AAA would apply. Significantly, the arbitration agreement further stated that the arbitrator shall be entitled to award reasonable attorney's fees and costs to the prevailing party. The Court of Appeal affirmed the trial court's refusal to compel arbitration holding the agreement did not pass the applicable test for unconscionability, because the AAA rules were not provided with the arbitration agreement and a prevailing party attorney's fees provision exposed the employee to a greater risk of being liable to the employer for attorney's fees than he would have been had he pursued his FEHA claims in court. Generally, FEHA claims only allow a prevailing employee to recover attorneys fees. Employers must be cognizant that only a well- drafted arbitration provision in an employment agreement be enforced in California. Arbitration provisions that are incomplete, appear to impair valuable employee rights and/or create a risk of loss to the employee are likely to fail.

EEOC Clarifies Its Position Regarding Employers’ High School Diploma Requirements

March 7, 2012 by Hinshaw & Culbertson LLP

On November 17, 2011, the EEOC issued an informal opinion letter discussing potential violations of the Americans with Disabilities Act (ADA) as a result of an employer’s requirement that applicants hold a high school diploma. Specifically, the EEOC opined that if an employer adopts a high school diploma requirement for a job, and that requirement “screens out” an individual who is unable to graduate because of a learning disability, the employer may not apply the standard unless it can demonstrate that the diploma requirement is job related and consistent with business necessity. The EEOC further stated that even if the diploma requirement is job related and consistent with business necessity, the employer may still have to determine whether a particular applicant whose learning disability prevented him from obtaining a high school diploma can perform the essential functions of the job with or without a reasonable accommodation. More ›

California Court Finds Employment Arbitration Provision Unconscionable

March 5, 2012 by Hinshaw & Culbertson LLP

Employment arbitration agreements are generally enforceable in California. However, great care is required in both the drafting and the implementation. For example, California's First District Court of Appeal (San Francisco) recently underscored this through the unconscionablity doctrine in Ajamian v. Cantor CO2e, No. A13125 (Cal.Ct. App. Feb. 16, 2012). The Court affirmed denial of an employer's petition to compel arbitration under a provision in an employment contract. More ›

Tenth Circuit Agrees with Employer: EEOC Subpoena Too Overbroad

March 1, 2012 by Hinshaw & Culbertson LLP

Two separate individuals filed discrimination charges pursuant to the Americans with Disabilities Act (“ADA”) with the Equal Employment Opportunity Commission (“EEOC”) against an employer alleging discrimination based on a perceived disability after they were not hired following a conditional offer of employment and a medical screening procedure. More ›

Ninth Circuit Requires Application of California Law over Contractual Choice of Law Provision

February 29, 2012 by Hinshaw & Culbertson LLP

A class of truck drivers filed suit against a home delivery and transportation logistical support services company claiming alleged violations of the Fair Labor Standards Act and various related California labor laws, including failure to pay overtime, failure to pay wages, and unfair business practices. The company defended the claims by arguing that the drivers were not employees, but instead were independent contractors, and pointed to the Independent Truckman's Agreement and Equipment Lease Agreement signed by the drivers. Further, because the Agreement contained a provision indicating that Georgia law was to apply to any disputes relating to the relationship, the company claimed that Georgia law confirmed that the drivers were not employees and thus could not maintain their claims. After motion practice and a bench trial, the district court agreed with the company and found that not only did Georgia law properly apply to the dispute, but that under Georgia law, there is a presumption of independent contractor status and that the drivers could not establish the existence of an employer-employee relationship. The Ninth Circuit Court of Appeals, however, disagreed with the trial court's analysis, at least in part, and reversed the decision. The Court of Appeals found that the district court failed to consider whether applying Georgia law would be contrary to fundamental California policies, and whether California had a materially greater interest in the resolution of these issue than did Georgia. Since the Court of Appeals found Georgia law to directly conflict with California law on the presumptions and burdens involved in the consideration of independent contractor status, and because worker protection is a fundamental public policy in California, the application of Georgia law would be improper. Finding that California law applied to the dispute, the case was remanded with instructions for the district court to reconsider the issues in light of California law. You can read more about the Court's decision and why it ultimately determined that the company's choice of law provision and Georgia law did not apply here.  More ›

Policy Requiring Disclosure of Nature of Illness for Work Absences may Violate ADA

February 15, 2012 by Hinshaw & Culbertson LLP

The Equal Employment Opportunity Commission filed a class-action lawsuit against a department store claiming its policy violated the Americans with Disabilities Act (“ADA”). The case came about when an employee was unable to attend work for a few days due to medical illness, and despite having provided a doctor’s note for her absence, the store sought the specific nature of her illness in order to have the absences deemed “excused.” The employee refused to provide the information and claimed the request was unlawful. The store subsequently terminated her employment. Later, the store revised its policies and this requirement was removed.  More ›

DOJ Issues best Practice Advice for Employers Facing I-9 Audits

February 15, 2012 by Hinshaw & Culbertson LLP

The Office of Special Counsel for Immigration-Related Unfair Employment Practice recently released advice on best practices for employers to use in response to audits by Immigration and Customs Enforcement (ICE). The Office of the Special Counsel specifically advises that employers need to effectively communicate with employees and unions to assure that the audit process is transparent and not discriminatory. To do this, employers should develop a uniform plan for informing all employees that the employer is subject to an ICE audit. Employers should provide all workers with a reasonable amount of time to correct discrepancies in their records identified by ICE and treat all workers in the same manner during the audit. This means that all workers with like discrepancies who are asked to present additional documents are provided with the same time frames and the same choice of Form I-9 documents to present. More ›

Dukes’ Applicability may be Limited

February 13, 2012 by Hinshaw & Culbertson LLP

A recent opinion from the United States Court of Appeals for the Seventh Circuit demonstrates that the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) may have limited applicability to wage and hour class actions. More ›

First Circuit Holds that Private Companies’ Employees not Entitled to Whistleblower Protections Under SOX

February 7, 2012 by Hinshaw & Culbertson LLP

Former employees of private companies that act under contract as advisers to and managers of mutual funds organized under the Investment Company Act of 1940 filed suit against their respective employers for unlawful retaliation after they were terminated. The employees claimed that they were entitled to the whistleblower protection provision within the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1514A) (“SOX”) because they had reported potential fraud and security violations. The employers contested this, arguing that SOX’s protections did not extend to employees of private companies, and filed motions to dismiss the lawsuits.The district court disagreed with the employers, holding that this particular provision of SOX did protect employees of private companies that are contractors or subcontractors to “public companies" (as defined under the Act), where those employees were reporting violations relating to fraud against shareholders. More ›

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