On the Legal Front: Summertime Blues
Many of the landmark Supreme Court rulings in EEO cases occur in late June, allowing us to report on them in the October issue. For example, in the last four October issues, we reported on Supreme Court rulings in Wal-Mart v. Dukes (2011; class actions), Lewis v. Chicago (2010; timeliness of adverse impact charges), Ricci v. DeStefano (2009; discarding test results for fear of losing on adverse impact), and Meacham v. KAPL (2008; adverse impact and age). More recently, in the April 2012 issue, we previewed Fisher v. University of Texas, which promises to be a critical test of Grutter v. Bollinger (2003) on minority preference is school admissions. Unfortunately for us, oral arguments in Fisher will not occur until the fall, meaning it is unlikely there will be a ruling in time for the January 2013 issue. However, there is a possibility we will be able to at least discuss the oral arguments in the January column.
That said, our life is never dull. For this column we have other fresh topics to draw from, four of them in fact: (a) the EEOC’s clamp down on harassment; (b) employer mistakes relating to ADA rules for use of medical exam results after a conditional job offer; (c) alleged misuse of cognitive/ability tests; and (d) the “cat’s paw” theory of liability (also known as “rubber stamp” theory).
Topic 1: EEOC Clamps Down on Harassment
In recent months, the EEOC has cited an unusually large number of victories relating to harassment. For example, in just a 16-day stretch from June 21, 2012 through July 6, 2012, the EEOC announced eight settlements and a favorable court ruling. Most of these cases feature sex and race, but there are also complaints of harassment based on national origin, religious beliefs, and even pregnancy. Here’s the rundown:
On June 21, 2012, the EEOC announced a $125,000 settlement with Donahue Cardiology (in Washington, PA). Three cardiologists who owned or were shareholders in the practice allegedly subjected three female employees to sexually offensive and debasing comments. The women were also forced to look at sexually explicit pictures and cell phone messages. See http://www.eeoc.gov/eeoc/newsroom/release/6-21-12.cfm.
On June 22, 2012, the EEOC announced a $23,000 settlement with a St. Louis Restaurant in which the allegation was that a female employee (Edwonder Hobson) was sexually harassed by an assistant supervisor (Brian Jones). Jones purportedly rubbed his body against Hobson’s, tried to put his hands up her skirt, and tried to kiss her. See http://www.eeoc.gov/eeoc/newsroom/release/6-22-12.cfm.
On June 25, 2012, the EEOC announced a $95,000 settlement with Country Fresh Market (in Brownsville, PA) on sexual harassment and retaliation. The allegation is that the company “knowingly permitted the flagrant sexual harassment of women who worked in the meat department,” including physical touching and repeated sexual advances and comments (talk about being fresh). Despite complaints by the women, company officials not only failed to take correction action; they also threatened the women with termination for complaining. See http://www.eeoc.gov/eeoc/newsroom/release/6-25-12c.cfm.
In another announcement on June 25, 2012, a corporate officer of a Texas-based dry cleaning store agreed to a $43,000 settlement for allegedly subjecting a female employee to requests for sexual favors, speaking to her in a suggestive manner, and physically touching her body. See http://www.eeoc.gov/eeoc/newsroom/release/6-25-12d.cfm.
On June 29, 2012, the EEOC announced an $11 million settlement with YRCC/Yellow Transportation Ends (based in Chicago, IL) on charges of systemic racial harassment. The EEOC alleged that Black employees were exposed to hangman’s nooses and racist graffiti, cartoons, and comments, they were subject to harsher discipline and scrutiny, and they were given more difficult and time-consuming assignments than White comparators. In addition, it was alleged that the company had received numerous complains by Black employees over several years and failed to take corrective action. See http://www.eeoc.gov/eeoc/newsroom/release/6-29-12a.cfm.
On July 2, 2012, the EEOC announced a $90,000 settlement with Simpsonville Hotel (in Greenville, SC). The allegation is that from August 2007 through January 2009 three women were subjected to sexual comments, sexual advances, and touching by the hotel’s general manager; that the corporate office failed to properly investigate or stop the abuses after one of the women complained; and that the complainant was subsequently fired by the general manager. See http://www.eeoc.gov/eeoc/newsroom/release/7-2-12.cfm.
On July 3, 2012, the EEOC announced a $75,000 settlement with B.J. Con/Sew (an Asheboro, NC sewing company) relating to harassment of a single Hispanic employee (Jason Ramirez). The allegation is that the harassment occurred on a daily basis between July 2006 through June 2008, during which one coworker subjected Ramirez to derogatory name calling (including “wetback,” “crazy Mexican,” “dumb, stupid Mexican,” and “half-breed.”). What made it worse is that a second coworker who also allegedly harassed Ramirez was promoted to a supervisory role over Ramirez. Ramirez lodged repeated complaints to higher level officials, including the plant manager, and felt he had to resign (i.e., constructive discharge) when his complaints failed to lead to corrective action. See http://www.eeoc.gov/eeoc/newsroom/release/7-3-12.cfm.
On July 5, 2012, the EEOC announced a $365,000 settlement with Best Western Hotels in Tacoma, WA for “bullying” based on sex, pregnancy, race, and religion. The allegations here are that a general manager “persistently” harassed and denigrated women, including minorities and those with strong religious beliefs. It is also alleged that he used racial slurs and derogatory sex- and race-based comments, that he engaged in yelling and physical intimidation, and that he fired five women after learning they were pregnant. See http://www.eeoc.gov/eeoc/newsroom/release/7-5-12.cfm.
Finally on July 6, 2012, the EEOC announced that U.S. District Court Judge Robert S. Lasnik ordered sanctions, including a $100,000 penalty, against Fry’s Electronic Inc. due to sexual harassment and retaliation (and other issues). The allegations were that an assistant store manager sexually harassed a female employee (America Rios), as well as firing a supervisor (Ka Lam) in retaliation for complaining to management about how Rios was being treated. See http://www.eeoc.gov/eeoc/newsroom/release/7-6-12.cfm
Topic 2: Misuse of Medical Exam Results
Medical exams are permitted under the ADA after a conditional job offer has been made. However, an offer may not be rescinded if there is a medical impairment that is unrelated to the essential job functions. The EEOC announced a settlement and a lawsuit on misuse of postoffer medical information on back-to-back days in July.
On June 10, 2012, the EEOC announced a $45,000 settlement with RCC Consultants, Inc., a New Jersey-based telecommunications, engineering, and consulting company with offices throughout the United States (see http://www.eeoc.gov/eeoc/newsroom/release/7-10-12.cfm). The allegation is that Stanton Woodcock was offered a managing consulting position after interview. RSC then learned that Woodcock has ocular albinism, an inherited condition in which his eyes lack melanin pigment that precludes him from driving motor vehicles. RSC then rescinded the job offer. The EEOC’s position was that driving is not one of the essential functions of the job and that otherwise Woodcock was “fully qualified to perform the duties of the managing consultant position.”
On June 11, 2012, the EEOC announced it is suing Pace Solano, a Solano County, California disability services provider (see http://www.eeoc.gov/ eeoc/newsroom/release/7-11-12.cfm). The allegation is that Katrina Holley was interviewed and was offered a job to teach developmentally disabled adults. Holley then took a preemployment physical exam, successfully completing all tests. However, during the exam, she disclosed that she has partial paralysis in one hand. Pace Solano then rescinded the job offer even though her medical doctor offered that she can perform the job despite her physical impairment. Holly was told that her injury makes a liability and that “you don’t want to get hurt any more than you already are, do you?” Interestingly, Solano’s website (pacesolano.org) boasts that it serves approximately 387 people with developmental disabilities at seven program sites and employs more than 180 employees who provide care, training, and transportation to its clients. The irony in this case was noted by EEOC Regional Attorney William Tamayo, who stated, “It’s highly ironic that Pace Solano, an organization dedicated to assisting people with disabilities, rejected a fully capable and qualified applicant because of her disability.” The EEOC is suing for back pay, lost wages, and compensatory and punitive damages for Holly.
Topic 3: Alleged Misuse of Cognitive Ability Tests
On July 19, 2012, the OFCCP announced a settlement with Leprino Foods, a major mozzarella cheese producer, on charges it used a preemployment Workkeys exam that adversely impacted Blacks, Asians, and Hispanics, and that the test is not job-related for laborer jobs (see http://www.dol.gov/ opa/media/press/ofccp/OFCCP20121443.htm). Under the terms of the settlement, Leprino agreed to pay $550,000 in back pay and interest to 253 minority applicants who were rejected based on exam scores between January 2005 and October 2006. Leprino also agreed to hire at least 13 of the original 253 applicants, undertake extensive self-monitoring measures, and discontinue the use of the test for the above purpose.
The key allegation by the OFCCP is that the Workkeys exam assesses math skills, locating information, and observation, and therefore, is not job related because these skills are not critical to the entry-level tasks performed by on-call laborers. The tasks in question include inspecting products, monitoring equipment, and maintaining sanitation at the facility. This was the first testing case in recent memory that OFCCP took before an administrative law judge.
Cognitive tests also played a role in a recent settlement out of Alabama. In a consent decree finalized on July 17, 2012 by the Northern District of Alabama, Southern Division, Cooks Pest Control agreed to a $2.5 million settlement in a class action lawsuit (Waters v. Cook’s Pest Control, 2012). The class included 486 African-American job applicants who applied for work at any of Cook’s locations from March 1, 2005 through January 27, 2012. The award includes $875,000 in attorneys’ fees and $53,832 in expenses to class counsel. In addiiton, among the class members, Waters, the named plaintiff, will receive an amount of 1.5 times the amount paid to other class members. Under the terms of the consent decree, fees and expenses to class counsel and the award to Waters will be paid in an installment of $1.5 million due 30 days from the date of the decree, with the balance due by the end of January 2013.
There were 11 allegations in this case, the most important of which for present purposes were “discouraging African Americans from applying for jobs by announcing that an algebra, geometry, and math test is required” and “using pen-and-paper math tests as selection criteria, which have a racially disparate impact on African Americans and are unnecessary due to the automatic measuring of modern pest control equipment.” As part of the settlement, Cooks agreed to, among other things, establish “facially neutral hiring criteria for filling sales, pest control technician, and termite technician positions.”
Topic 4: Cat’s Paw Theory of Liability
Our fourth and final topic is the cat’s paw theory of liability. The theory stems from a fable by Jean de La Fontaine first published in 1679. In the story, a monkey dupes a cat into pulling chestnuts from a fire and eats them all as the cat burns it paw. Applied to selection decisions, a decision maker may be “duped” by a nondecision maker into (say) terminating an employee without investigating the facts, thus unwittingly carrying out the wishes of the nondecision maker. Cat’s paw theory has a 25-year history (at least) in case law. Our interest in this case relates to the most recent ruling on this topic in Chattman v. Toho, decided by the 6th Circuit on July 13, 2012, and two precursor rulings, BCI Coca-Cola Bottling Co. of Los Angeles v. EEOC (2006), decided by the 10th Circuit, and Staub v. Proctor Hospital (2011), decided by the Supreme Court.
In the BCI case, Peters, a Black male, worked for BCI under the supervision of Grado, a Hispanic male. Grado wanted Peters terminated for insubordination, but the local HR manager (Pederson) was not available. So Grado phoned a higher ranking HR manager (Edgar), who worked 450 miles away and authorized the termination. The key allegation was that Grado was motivated by racial animus. The defense was that neither of the HR managers knew that Peters was Black. The EEOC made the cat’s paw argument, which was rejected by the District Court of New Mexico in a summary judgment and was reversed on appeal by the 10th Circuit. Originally, the Supreme Court was scheduled to review the case, but it was dropped a few days prior to oral arguments.
However, Supreme Court did address cat’s paw theory in Staub v. Proctor. The facts are that Staub was a technician and an army reservist. His immediate supervisor (Mulally) and Mulally’s supervisor (Korenchuk) were alleged to be hostile to military obligations. Staub received a disciplinary warning and was directed to report to Mulally or Korenchuk after his cases were completed. The supervisors then reported that Staub violated “corrective action” to the vice president of human resources (Buck), who in turn fired Staub without conducting an investigation. Staub filed a grievance, to no avail. Staub then filed a claim under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). A jury found for Staub, but the 7th Circuit reversed. The Supreme Court then reversed the 7th Circuit, ruling:
If a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.
More recently, the 6th Circuit applied “proximate cause” theory in the Toho case. The facts are that Chattman, a Black male, had evidence that the HR director (Tullock) made racially insensitive statements in the past. After Chattman engaged in a “horseplay” incident with a White coworker (Johnson), Tullock recommended to the HR vice president (Lane) that Chattman be terminated. It was alleged that Tullock then misrepresented the facts surrounding the horseplay incident to Lane. Chattman was not terminated but received a warning that carried with it a one-year penalty preventing him from being promoted.
From that point forward, Tullock appeared to misinform various members of upper management about the investigation process. For example, Chandler (another supervisor) in his deposition, stated that he, Tullock, and Smith discussed what to do about the incident and agreed not to make any decision or recommendation until after speaking to someone at the corporation’s human resources and legal departments. However, after that meeting, Tullock called Lane at Toho’s parent company and recommended Chattman be terminated. In his deposition, Tullock recalled telling Lane that “Ben [Chandler] and I were both recommending termination and Scotty [Smith] as well.” Chandler and Smith both deny they recommended termination. Quoting in part from the Staub ruling, the 6th Circuit ruled:
If [an] adverse employment action is related to the discriminatory action, the employer may be liable. Neither independent investigation nor independent judgment on the part of the employer provides a per se defense …[I]f “the independent investigation relies on facts provided by the biased supervisor,” then the investigation was not, in actuality, independent and the employer is liable.
Ultimately, the 6th Circuit overturned summary judgment by the district court, ruling that Chattman presented sufficient evidence of “discriminatory animus” by Tullock and that he presented “genuine issues of fact as to intent and causation.” Therefore, the moral of the Toho story is that high ranking decision makers should not let themselves be duped into acting like cats or else they will be burned.
Each of the four topics described in this article has a moral to the story. We close the article with these take home messages.
- EEOC considers harassment to be one of the most egregious forms of discrimination and will aggressively enforce the law on this front. As the settlements described above show, harassment can take on many forms (gender, race, national origin, even pregnancy). These are the kinds of cases that remind us that the Civil Rights Act of 1964 wasn’t enacted that long ago and that we still have work to do.
- Cognitive ability tests will continue to be an EEO agency target. For as much literature as we have demonstrating that cognitive ability tests predict performance, we also have a long history of EEO agencies and public-sector claimants challenging these tests. In the Leprino settlement, it is unfortunate that the details of the validity argument were not published as part of the consent decree. We suspect that validity generalization played a role in the argument, but we won’t know the details. Cognitive ability test users should be prepared for challenges that tests are more difficult than the jobs they are used to make employment decisions for and should be prepared to argue why there was not a reasonable alternative available that would be equally job related and less adverse. We suggest that implementation strategies (e.g., weighting, cut scores, multiple-hurdle versus compensatory considerations) intended to reduce adverse impact while balancing job relatedness can be effective reasonable alternative arguments.
- The ADA has always been and continues to be an important, complex, and multifaceted statute. This is particularly the case given the recent Amendments Act expanding coverage and may only increase in importance based on proposed regulations out of the Department of Labor that would require federal contractors to establish quantitative goals, request that applicants self-identify disability status (which is currently illegal in the vast majority of scenarios), and conduct personnel activity analyses on disabled applicants and employees. When it comes to postoffer medical exams, organizations need to (a) clearly identify and document the essential functions of a job and (b) consider the opinions of objective experts on whether an impairment identified as part of a medical exam could play a role in whether a person can perform those essential functions.
- When it comes to the cat’s paw, high ranking decision makers should not duped into acting like cats or else they will be burned. Those responsible for making employment decisions need to seriously consider context when incorporating information from others and realize that discrimination can still occur through them (the cat’s paw) via the influence of others.
EEOC v. BCI Coca-Cola Bottling Co. of Los Angeles (2006) 450 F.3d 476.
Chattman v. Toho (2012) U.S. App. LEXIS 14359.
Fisher v. University of Texas (2011) F.3d 213.
Grutter v. Bollinger (2003) 539 U.S. 306.
Lewis v. Chicago (2010) 130 S.Ct. 2191.
Meacham v. KAPL (2008) 128 S.Ct. 2395.
Ricci v. DeStefano (2009) 129 S. Ct. 2658.
Staub v. Proctor Hospital (2011) 131 S.Ct. 1186.
Wal-Mart v. Dukes (2011) 131 S.Ct 2541.
Waters v. Cook’s Pest Control (2012) U.S. Dist. LEXIS 99129.