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HIGHLIGHTS
FOR THE MONTH OF MAY 2007
By: Randi
Klein Hyatt
RECENT DEVELOPMENTS
Supreme Court Prohibits Stale Claims For Pay Discrimination
The Supreme Court, in a sharply divided 5-4 ruling, held
that Title VII of the Civil Rights Act of 1964 bars lawsuits
alleging discrimination in compensation if the compensation
decision was not the subject of a timely EEOC charge. (To
be timely, an EEOC charge must be filed within 180 or 300
days, depending upon whether the state or locality has a
deferral agency). This ruling does not, however, apply to
the Equal Pay Act, under which each paycheck can be challenged
as a separate violation.
Facts of the Case: In Ledbetter
v. Goodyear Tire & Rubber Co, Inc., the plaintiff
worked in various supervisory jobs for 19 years. In many
of those years, the plaintiff received low performance evaluations
and raises, for reasons the jury found were discriminatory.
Although the plaintiff’s recent performance evaluations
and raises were not discriminatory, her pay remained lower
than that of her male peers as a result of the past discrimination.
The question before the Supreme Court was whether the plaintiff
could bring a claim of pay discrimination under Title VII
based on the continuing effect of past discriminatory decisions.
The Court’s Ruling: The
Supreme Court held that the plaintiff’s failure to
file timely charges after the past discriminatory evaluations
barred her lawsuit. The Court rejected the plaintiff’s
argument that compensation claims under Title VII should
be governed by the “paycheck accrual” rule followed
in Equal Pay Act case. Under the “paycheck accrual”
rule, each paycheck is treated as a separate claim, giving
rise to a new statute of limitations. The Court’s
ruling treats compensation the same as other employment
decisions—the time for filing an EEOC charge is triggered
when the decision is made and is not delayed until its effects
are felt.
Lessons Learned: While the
Supreme Court barred claims based on current effects of
past discrimination under Title VII, the same result does
not apply under the Equal Pay Act. Under the Equal Pay Act,
each separate paycheck does give rise to a new claim, regardless
of when the pay disparity was first created. In addition,
it is important to keep in mind that in deciding Ledbetter,
the Court followed federal precedent, primarily Delaware
State College v. Ricks. States that have not adopted the
Ricks rule, such as Maryland, will probably not follow Ledbetter
either and may well adopt the “paycheck accrual”
rule for purposes of state and local anti-discrimination
laws.
TAKE NOTE
Telecommuting Under
ADA. Permitting an employee to telecommute
as a temporary accommodation may trigger the obligation
to continue the arrangement on a long-term basis. In Woodruff
v. Peters, the plaintiff, after suffering an on-the-job
injury, was permitted to work from home two days a week
until a new supervisor took over and stopped the telecommuting.
The employer argued that it was not required to permit telecommuting
when other accommodations were an option and because telecommuting
is not a court-favored reasonable accommodation. The Court
of Appeals for the District of Columbia Circuit disagreed,
holding that once an employer provides an accommodation,
even if it is not legally favored or required, it may be
required to justify, before a jury, why it is no longer
a viable option.
Conviction Records. It was legal to reject an applicant based on a conviction
some 40 years earlier when the no-conviction policy was
based on business necessity. In El
v. SEPTA, the employer would not hire any applicant
as a transit driver if he or she had a violent crime conviction,
regardless of the circumstances or the remoteness of the
conviction. The plaintiff had a 40-year old conviction of
second degree murder arising from a gang fight when he was
a teenager. The applicant sued for employment discrimination
claiming that the employer's policy had a disparate impact
on minorities who, it was claimed, are more likely to have
convictions than white applicants. The Court of Appeals
in Philadelphia ruled that employers must establish that
their prior conviction policies are consistent with business
necessity, a burden it found that SEPTA satisfied in the
case at hand.
Translation of Labor
Contract Not Required. An employer is not required
to translate its collective bargaining agreement into Spanish
in order to bind employees to the mandatory arbitration
provisions. In Aleman
v. Chugach Support Serv. Inc., the collective bargaining
agreement required employees to arbitrate any discrimination
claims instead of going to court. Such clauses are enforceable,
provided that they "clearly and unmistakably" waive the
right to sue in court. The plaintiffs argued that they could
not have waived their rights without being provided a copy
of the collective bargaining agreement in their native language.
The Fourth Circuit rejected their claim, finding that the
union had the right to execute the waivers contained in
the labor contract on the employees' behalf.
Shifting
Reasons For Termination. The Court of Appeals in
Richmond held an employer was not liable under Title VII
even though it admittedly misstated the reason for terminating
an employee. In Holland
v. Washington Homes, Inc., an African-American sales
manager claimed he was discharged for complaining about
discrimination. The employer countered that it terminated
the employee because he made physical threats toward his
immediate supervisor. The employee argued that the company’s
reason was pretextual, pointing out that at the state unemployment
hearing, the company reported that the employee was laid
off for lack of work and did not offer threats of violence
as the reason for termination. The Fourth Circuit found
that the employer’s inconsistent reasons actually
evidenced “charity on the company’s part,”
intended to allow the employee to receive unemployment and
retirement benefits that otherwise would have been denied.
Notwithstanding this decision, it remain risky to give inconsistent
reasons for employment decisions, because they are often
considered evidence of discrimination.
Maryland's Expanded
Smokiing Ban. Governor O’Malley signed into
law the Clean Air Act of 2007 extending the State’s
smoking ban to bars, restaurants, and private social clubs.
Since 1995, Maryland has banned smoking in office buildings
and other indoor work places, with the exception of bars
and restaurants. The new law, effective February 1, 2008,
establishes civil penalties for noncompliance. The first
violation will result in a written warning. The second violation
will result in a $100 penalty. Any additional violation
will result in a penalty of no less than $250. Employers
can face civil penalties between $2,000 and $10,000 for
terminating or discriminating against an employee who complained
or participated in complaining about violations of the anti-smoking
law.
Virginia Criminal
Victims. Virginia enacted
a new law requiring employers to permit an employee who
was a victim of a crime to leave work to be present at any
criminal proceeding relating to the crime. The new law,
which becomes effective July 1, 2007, prevents employers
from discharging or taking an adverse personnel action against
an employee who takes leave from work because he or she
was a victim of crime. As before, the same protection applies
to employees summoned for jury duty or to testify in a proceeding.
The statute defines criminal proceeding to include several
phases, including the initial appearance, post-arrest release,
sentencing, post-conviction release, and probation revocation.
TOP TIP
Payment of Overtime
on Bonuses or Commissions. Unless an employee is
exempt from overtime, the employee’s bonuses, commissions,
piece rates or other earnings must be taken into account
in computing overtime. The only bonuses that do not have
to be taken into account are gifts or holiday bonuses, not
based on hours worked, production or efficiency, and not
so large as to be considered part of the employee’s
wages. To compute overtime for a bonus, commission, piece
rate or other payment in addition to the employee’s
normal wages, the amount of the payment is apportioned backed
over the workweeks in which it was earned. The amount earned
each week is divided by the hours worked that week, to give
an hourly rate associated with the payment. The employee
is entitled to receive half the hourly rate associated with
the payment for hours worked in excess of 40.
For greater clarification of any of these issues, you may
contact any Shawe
Rosenthal attorney.
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