Cheryl Perich worked for Hosanna-Tabor Evangelical Lutheran Church and School as a teacher. Because she had completed certain academic requirements, she was classified by the school as a “Minister of Religion, Commissioned”. In 2004 Perich developed narcolepsy and was unable to teach; when she was able to return, the school advised her that it had filled her position. It eventually sent her a letter of termination, causing Perich to sue for discrimination under the Americans with Disabilities Act.

The Supreme Court first reviewed the historical context in which the First Amendment’s Establishment and Free Exercise clauses had been drafted, and reaffirmed several earlier decisions stating that it is impermissible for the government to contradict a church’s determination of who can act as its ministers. It then considered whether such a “ministerial exception” should apply to claims of employment discrimination, and agreed with several lower courts that it should. The First Amendment prohibits the government from punishing a church (through application of law) for discriminating in the selection of its ministers because that would deprive the church of control over the selection of who will personify its beliefs.

This decision is not surprising given the number of lower courts that had resolved the issue in the same manner. The Court refused to give any broad guidance on how to determine whether a particular employee is a “minister”, leaving that issue for another day.

In particular, the rule eliminates business necessity from the ADEA’s “reasonable factors other than age” defense. In its place, the EEOC will apply a general reasonability standard borrowed from tort law. Under the reasonability standard, the EEOC will look at an employer’s entire decision-making process, rather than a particular factor like business necessity, to evaluate an employer’s policy.

The Commission drafted the new rule to make EEOC regulations consistent with Supreme Court opinions in Smith v. City of Jackson, 544 U.S. 228 (2005) and Meacham v. Knolls Atomic Power Laboratory, 554 U.S. 84 (2008). In these cases, the Supreme Court held that the “business necessity” defense has no role in ADEA disparate impact cases.

Defendant SMS provided housekeeping services to Ridgedale Mall. Defendant Gonzalez was employed by SMS as a facility manager for SMS, and in this role he was responsible for
supervising SMS employees at Ridgedale. Zuniga was hired by Gonzalez as a housekeeper there.

Zuniga resigned her employment with SMS in October 2007 without having reported any misconduct by Gonzalez. In March 2008, however, she filed a sworn Charge of Discrimination with the EEOC in which she alleged that Gonzalez had raped her four different times at work. Once SMS learned of these allegations, it sent a letter to Zuniga’s attorney asking for a statement regarding her allegations so that they could be investigated.

Eventually, Zuniga sued both Gonzalez and SMS under Title VII and the Minnesota Human Rights Act; she also asserted common law claims of assault and battery against Gonzalez and respondeat superior against SMS. She later moved to amend her Complaint to include claims for punitive damages against both Gonzalez and SMS.

Judge Mayeron first reminds us that in federal court, “the pleading of punitive damage claims under causes of action premised upon the law of the State of Minnesota must generally conform to the requirements of Minn. Stat. §§ 549.191 and 549.120.” In other words, a plaintiff may not seek punitive damages in her initial complaint, but must do so later by bringing a motion to amend, and then showing by “clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.” To be “clear and convincing”, there must be “more than a preponderance of the evidence, but less than proof beyond a reasonable doubt.”

Significantly, when reviewing such evidence, the Court makes no credibility rulings, nor does it consider any challenges by cross-examination or otherwise to the plaintiff’s proof. The Court’s only task at this stage is to determine whether there is prima facie evidence that the defendant acted with deliberate disregard.

Ultimately, Judge Mayeron granted the motion against Gonzalez, but denied it against SMS. (In considering the claim against Gonzalez, she also has an interesting review of exceptions to the hearsay rule, but that is beyond the scope of this post). The analysis of the claim against SMS is the most interesting, because it involves consideration of whether SMS “implicitly ratified” Gonzalez’s conduct as required by Minn. Stat. § 549.20, subd. 2. This in turn requires an inquiry into whether SMS “knew or should have known” about Gonzalez’s conduct.

Implied ratification occurs where a principal fails to repudiate an agent’s act as soon as it is fully informed of what the agent has done. The Court provides a very thorough analysis of two seminal Minnesota cases on this topic, Baufield v. Safelite Glass Corp. and Wirig v. Kinney Shoe Corp., before concluding that SMS did not ratify Gonzalez’s behavior (even though it offered him a new position in Texas after it learned of Zuniga’s allegations). More important to Judge Mayeron’s analysis was the fact that SMS had attempted to investigate those allegations; “even if it is determined that the investigation by SMS was cursory, biased and inadequate, SMS’s investigation of her post-termination complaint does not rise to an implicit ratification of Gonzalez’s alleged assaults of Zuniga, nor does it amount to clear and convincing evidence that SMS deliberately disregarded the rights and safety of Zuniga.”

The Court also rejected Zuniga’s contention that SMS had failed to properly monitor the workplace by leaving that task to Gonzalez because SMS had mechanisms in place to ensure that its policies on sexual harassment were being followed. “Whether these policies were adequate or inadequate, or whether SMS staff should have or could have done a better job in ensuring that site supervisors were following the rules, does not lead to the conclusion that SMS knew or should have known that Gonzalez was assaulting Zuniga. At best, any breakdown in SMS’s procedures may be evidence of negligence or gross negligence, but it does not rise to the level of willful indifference on the part of SMS.”

Aside from being a terrific primer on the procedure and standards for bringing motions for punitive damages in federal court, this case also provides a reminder to employers of the importance of having anti-harassment policies and mechanisms in place, and investigating all allegations of alleged harassment, even if the complaining employee has already left the workplace.

The Minnesota Supreme Court today issued an important decision clarifying and broadening the contours of marital discrimination in light of recent legislative changes.

LeAnn Taylor began working for LSI in 1988 as a receptionist/secretary.  In February 2001, she was promoted to Sales and Marketing Coordinator.  In June 2001, she married Gary Taylor, the president of the company.  Five years later, however, Gary Taylor resigned from LSI.  Shortly after his resignation, LSI fired LeAnn as well.  LSI did not hire anyone to replace Taylor and her duties were reassigned to other employees.

In her complaint, Taylor alleged that she was terminated due to her ‘marital status,’ in violation of Minn. Stat. § 363A.08, subd. 2 (2010). Section 363A.08, subdivision 2, provides that “it is an unfair employment practice for an employer, because of . . . sex [or] marital status . . . [to] discharge an employee.”  According to Taylor, the chief executive officer of LSI’s parent company told Gary Taylor that he would like to terminate LeAnn because she would be uncomfortable or awkward remaining employed with the company after Gary left.  LeAnn also claims that the CEO told her directly that “due to her husband’s situation”,  and the fact that it was likely that the Taylors were going to have to relocate, LSI was eliminating her position.  LSI denies those statements , and instead claims that Taylor was fired for legitimate business-related reasons.

The district court dismissed Taylor’s complaint on the basis of a 1984 decision by the Supreme Court indicating that the act in question must be “directed at the institution of marriage”.  On appeal, Taylor argued that that requirement had been overruled by the legislature’s subsequent amendment defining marital status as including “protection against discrimination on the basis of the identity, situation, actions, or beliefs of a spouse or former spouse.” Minn. Stat. § 363A.03, subd. 24 ( 2010).

The issue before the Supreme Court, therefore, was narrow: whether “marital status” discrimination requires a plaintiff to prove that the employer’s action constitutes a “direct attack” on the institution of marriage.   Examining the amended language of the MHRA, the Court unanimously found that the statute is clear: an employer cannot discharge an employee because of marital status, which includes discrimination on the basis of “the identity, situation, actions, or beliefs of a spouse or former spouse.”   Thus, the statute extends protection against marital status discrimination to include the identity of the employee’s spouse and the spouse’s situation, as well as the spouse’s actions and beliefs.   Therefore, a plaintiff is not required to show that termination was directed at the institution of marriage in order to establish a marital status discrimination claim.

An employee of CFS claimed to suffer a daily barrage of lewd comments and gestures by employees of the company’s biggest client. Rather than intervene, CFS told him there was nothing that it could do because the harassers were not under its control.  The employee filed a complaint with the EEOC, which brought suit on his behalf.  The Appeal Court reversed the lower court and remanded the case for trial, finding that there were sufficient facts to show that CFS had actual or constructive notice of the harassment and failed to take any corrective action.

Employers:  If your employee complains of harassment by a customer, even if its same-sex harassment, please do something!

Hat Tip:  Workplace Prof Blog

Judge Donovan Frank of the U.S. District Court in Minneapolis recently granted summary judgment in favor of the University of Minnesota in a case brought by Terry Teachout that raises some interesting employment law issues.

Teachout worked in the University’s Risk Management office from 1993 to 2008.  When his position was eliminated as part of a restructuring, he sued, alleging retaliation for having requested a disability accommodation and for reporting alleged violations of law. 

Judge Frank first rejected Teachout’s state law claims under the Minnesota Human Rights Act and the Minnesota Whistleblower statute based on Eleventh Amendment immunity.   That amendment bars suits in federal court against a state (as well as a subdivision of the state like UM)  by a citizen of that state.  Thus, the Court lacked jurisdiction over the state law claims.

Turning to the merits of the claims, Judge Frank also ruled against Teachout.  On his claim of retaliation under the ADA, the judge found that Teachout could not establish the required causal link between his request for accommodation (a move from a cubicle to a private office because of an anxiety disorder) and the adverse action (the elimination of his job as part of the reorganization) because the reorganization plan pre-dated his request for accommodation.  (The reorganziation had also been recommended by an outside consultant, providing further support to the U’s decision.)  In addition, Teachout could not show that the University’s explanation for eliminating his position was “pretextual” as required under the familiar McDonnell Douglas analysis.  As a result, his ADA claim was dismissed.

As to his whistleblower claim, the Court also ruled that it was barred by the Eleventh Amendment.  Even if it weren’t, however, it would still be dismissed because the “report” that Teachout made — that the University was violating the confidentiality of medical records — was part of his regular job duties.  As the Minnesota Supreme Court recently made clear in Kidwell v. Sybaritic, Inc.,  an employee cannot be said to have “blown the whistle” when his report is made because it is his job to investigate and report wrongdoing.  Because Teachout’s report fell within the scope of his normally assigned job duties, they are not actionable under Minnesota law.

Very interesting article in today’s New York Times about the backlash that can result from  an institution’s efforts to address gender discrimination.

It seems that the Massachusetts Institute of Technology acknowledged 12 years ago that it had discriminated against female professors in “subtle but pervasive” ways,  and its subsequent efforts to address that discrimination became a national model for addressing gender inequity.

A new evaluation of those efforts shows both substantial progress and unintended consequences. For instance, many female professors say that M.I.T.’s aggressive push to hire more women has created the sense that they are given an unfair advantage. They report an assumption when they win important prizes or positions, it is because of their gender.  Female undergraduates face the perception that they got into M.I.T. only because of affirmative action.  Women also say they are uneasy with the frequent invitations to appear on campus panels to discuss their work-life balance. In interviews for the study, they expressed frustration that parenthood remained a women’s issue, rather than a family one.

Stereotypes also remain: women must navigate a narrow “acceptable personality range,” as one female professor said, that is “neither too aggressive nor too soft.” Said another woman: “I am not patient and understanding. I’m busy and ambitious.”  Letters of recommendation for tenure reflect this bias; those for men tend to focus on intellect, while those for women dwell on temperament.

These issues obviously extend beyond academia to corporations and law firms making honest efforts to address gender and racial discrimination.  Now we just have to figure out how to change the perceptions and avoid the backlash!

The U.S. Supreme Court today issued a potentially far-reaching opinion in a “cat’s paw” case, considering when an employer may be held liable for discrimination based on the actions of an employee who influenced, but did not make, the ultimate employment decision.  (The term “cat’s paw” derives from an Aesop’s fable in which a monkey induces a cat by flattery to extract roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey makes off with the chestnuts and leaves the cat with nothing. The fable compares the cat to princes who, flattered by the king, perform services on the king’s behalf and receive no reward.)

Vincent Staub worked as an angiography technician for Proctor Hospital in Peoria, Illinois until 2004, when he was fired.   Staub was a member of the United States Army Reserve, which required him to attend drill one weekend per month and to train full time for two to three weeks a year. Both of  Staub’s immediate supervisors were hostile to his military obligations because they felt it put on a strain on his co-workers and the department.  In January 2004, his supervisor issued Staub a “Corrective Action” disciplinary warning for purportedly violating a rule requiring him to stay in his work area whenever he was not working with a patient. The Corrective Action included a directive requiring Staub to report to his supervisors when he had no patients his work was completed.  According to Staub, the justification for the Corrective Action was false for two reasons: First, the company rule invoked by the supervisor did not exist; and second, even if it did, Staub did not violate it.

Several months later, one of Staub’s supervisors informed the hospital’s vice president of human resources that Staub had left his desk without informing a supervisor, in violation of the January Corrective Action.  Staub denied the allegation, but the VP of HR relied on it and after reviewing Staub’s personnel file, decided to fire him.  Staub sued Proctor under the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U. S. C. §4301 et seq, (USERRA), claiming that his discharge was motivated by hostility to his obligations as a military reservist. His contention was that his two supervisors were biased against him, and that their actions influenced the company’s ultimate decision to fire him. A jury found that Staub’s military status was a motivating factor in Proctor’s decision to discharge him, and awarded $57,640 in damages.  

The Supreme Court began its analysis by noting that under USERRA, an employer is considered to have engaged in prohibited actions if the person’s membership in the military is a “motivating factor” in the employer’s action, unless the employer can prove that the action would have been taken in the absence of such membership.  According to the Court, the main difficulty in this case was construing the phrase “motivating factor”.   When the individual who makes the ultimate decision is personally acting out of hostility, a motivating factor obviously exists.  The problem in “cat’s paw” cases arises when that official has no discriminatory animus herself but is influenced by a previous action that is the product of a discriminatory animus in someone else.   

After a lengthy analysis, the Court concluded that a nondecisionmaker’s biased report may constitute a causal factor if the ultimate decisionmaker takes it into account without determining that the adverse action was justified apart from the nondecisionmaker’s recommendation.  The employer is at fault because one of its agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision.   On the other hand, if the decisionmaker conducts an independent investigation that results in a termination for reasons unrelated to the original biased action, then the employer is not liable.

There are several lessons here for employers.  Chief among them is the need for the ultimate decisionmaker in any adverse employment action to conduct enough of an investigation to confirm that lower level supervisors have not tainted the process through their discriminatory animus.  In Staub’s case, the VP of HR did not inquire into whether the original Corrective Action was justified.  Because there was evidence that it was the product of antimilitary discrimination, that tainted the entire process.  Ultimately, an employer needs to be able to point to reasons for the termination that are free of any suggestion of discrimination.

These cases are usually difficult to sort out; don’t hesitate to consult with experienced employment counsel on them.