Wednesday, September 28, 2016

7th Circuit Finds No Hostile Work Environment When Employee Finds Noose in Work Space

Undoubtedly, most, if not all, laypersons, and even most lawyers, who read the title of this post will instantly wonder how any court could not find a hostile work environment claim to have merit when a noose is discovered in the workplace by an African-American employee.  I often find myself in very difficult phone call consultations with people when I have to hear their very difficult work situations and then have to explain the law to them.  Indeed, some of these callers hang up on me as if I do not know what I am talking about and they do not want to hear it anymore.  However, as this case highlights, plaintiffs in discrimination, harassment and hostile work environment cases, have very difficult burdens to meet.

Facts

The plaintiff, Jerome Cole, worked for Northern Illinois University in the Building Services Department since 1998.  Cole is African-American and alleges that, beginning in 2009, he experienced race discrimination, retaliation, and a hostile work environment based on his race.  He sued the university's board of trustees and eleven (11) individuals under Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the 14th Amendment. 

In 2009, Cole because a sub-foreman.  In 2011, Cole claims he was promoted to foreman (the defendants disputed this, but for purposes of summary judgment, Cole's assertion was taken as true).  At all times relevant, Cole was the only African-American foreman or sub-foreman in the department.  Cole alleged that his promotion to sub-foreman marked the start of a "laundry list of events" he claims amounted to unfair and discriminatory treatment.  Cole was demoted in 2012 because the acting superintendent learned that Cole and Ruth Stone, an acting sub-foreman in the same department, had been promoted without attention to proper procedures.

In mid-November 2012, Cole discovered a hangman's noose in his work area.  Cole threw the noose away, but inexplicably, the next day he discovered the same or possibly a second noose outside the building.  A department sub-foreman, John Holmes, told Cole that he, and two others found the noose earlier in an office on the other side of Cole's new work area.  Cole called two police officers he knew for advice and was told to "keep his cool" to try to "smoke out" the perpetrator.  Cole took the noose to the university police department.  He later emailed one of the Building Services supervisors, Richards, and told her that he had discovered a noose and taken it to the police.

Richards took Cole's email to the police station and turned it in to the acting superintendent and spoke to two other university officials about the incident.  By February 2013, the university police had begun an investigation.  A detective interviewed Holmes and Cole but the detective was then told by his supervisor to stop the investigation.  The person who left the noose in the break room was never identified.  The police investigation, which ultimately proved fruitless, was the only substantial step the university took after the noose incident.  Nothing in the record suggested that the noose incident was repeated after that.

7th Circuit Finds No Hostile Work Environment

The district court granted the defendants' motion for summary judgment, rejecting the hostile work environment claim, holding that (1) most of the hostile events were not based on Cole's race; (2) Cole had not produced evidence that the noose was intentionally left for him to find; and (3) Cole had not shown a basis for employer liability.

Harassment sufficiently severe or pervasive to alter the terms and conditions of employment is actionable under Title VII as a claim of hostile work environment.  To prove a claim for hostile work environment based on race, an employee must show:  (1) he was subject to unwelcome harassment; (2) the harassment was based on his race; (3) the harassment was severe or pervasive so as to alter the conditions of the employee's work environment by creating a hostile or abusive situation; and (4) there is a basis for employer liability.  Thus, as I mentioned at the outset of this article, a plaintiff has a large burden to meet and a lot of things to prove to meet their burden.

The crux of Cole's hostile work environment claim is the discovery of the noose.  The 7th Circuit found that the first and second prongs were easily met as the noose undoubtedly qualifies as "unwelcome harassment" and that given its disturbing history and status as a symbol of racial terror, the Court had no difficulty assuming that the harassment could be treated as based on race.

The Court agreed with the district court that the record in the case does not support a reasonable inference that most of the hostility Cole encountered was connected to his race as there was almost no evidence of racial animus in the record:  no hostile or ambiguous remarks, no racial slurs, nothing beyond the notable exception of the noose itself and the later secondhand report of a racist sign posted somewhere, at some unknown time by some unknown person.

With respect to the third prong, the Court held that they were hesitant to agree with the district court when they found that Cole count not produce evidence that the noose had been displayed or intentionally left for him to find.  The Court noted that a noose on display is generally likely to have more of an impact on employees than one hidden away in a co-worker's desk.  Thus, the Court decided not to lay down firm rules for when a noose in the workplace is or is not severe enough to be actionable.

No Employer Liability
The Court did find that Cole failed to present evidence to support the fourth element of his claim: a basis for employer liability.  Employers are strictly liable for supervisor harassment, but when a plaintiff claims that co-workers are responsible for the harassment, "he must show that his employer has 'been negligent either in discovering or remedying the harassment.'"  There was no evidence that a supervisor was involved in leaving the noose, so Cole had to present evidence allowing a reasonable jury to find that the university was negligent--which means in this context that it failed to take "prompt and appropriate corrective action reasonably likely to prevent the harassment from recurring."

A prompt investigation is the first step toward a reasonable corrective action.  The undisputed facts in this case, the Court held, show that Cole notified a supervisor of the discovery of the noose, the supervisor spoke to him about it and delivered her notes of the incident to the university police.  The supervisor also reported the incident to a couple university officials.  The Court held that in these circumstances, it was reasonable for the administration, having involved the university police, to leave the investigation to them.

The Court was also careful to make it clear that they were not holding that an employer necessarily fulfills its responsibility to take appropriate corrective action if it has reported an incident to some other party--such as university police.  The question is whether the employer took corrective action "reasonably likely" to prevent harassment from recurring.

The Court did conclude by stating that, "bad 'joke' or not, the presence of a hangman's noose in the workplace is not acceptable.  But based on the circumstances here, including Cole's reaction and the fact that the Building Services Department turned the matter over to the police for investigation...we see no basis for employer liability in this case."

Plaintiff's Race Discrimination and Retaliation Claims Likewise Failed

The 7th Circuit also upheld the district court's granting of summary judgment for the defendants on Cole's disparate treatment and retaliation claims finding that Cole presented no direct or circumstantial evidence of disparate treatment based on race and that Cole had not engaged in protected activity to survive a retaliation claim.  While these claims were not the highlight of this case, it is important to note that this decision cites a recent significant case, Ortiz v. Werner Enterprises, Inc., No. 15-2574, - F.3d -, -, 2016WL 4411434, at *4 (7th Cir. Aug. 19, 2016), which is a case that held that "evidence must be considered as a whole, rather than asking whether any particular piece of evidence proves the case by itself--or whether just the 'direct' evidence does so, or the 'indirect' evidence."  I blogged about this case previously.

The case is Jerome Cole v. Board of Trustees of Northern Illinois University, et al., No. 15-2305 (7th Cir. Sept. 27. 2016).

Tuesday, September 27, 2016

EEOC Loses Another Battle Against Employer's Wellness Program

Back in January I blogged about a case out of the Western District of Wisconsin whereby the federal district court there granted summary judgment against the Equal Employment Opportunity Commission ("EEOC") in their challenge to an employer's wellness program.  Undeterred, the EEOC continued with a suit it had previously filed in the Eastern District of Wisconsin against Orion Energy Systems, Inc., also alleging their wellness program violated the Americans with Disabilities Act ("ADA") and that Orion retaliated against an employee who chose to speak out against the program and opted out of the wellness program.  The judge in the Eastern District likewise ruled against the EEOC, but on very different grounds than the Western District, potentially giving rise to the 7th Circuit finally addressing this issue.

Facts

In 2008, Orion decided to switch from a fully insured health plan to a self-insured health plan, believing that a self-insured company can reduce or at least slow the increase of its health care costs by improving the health of its employees.  Toward that end, in the spring of 2009, Orion decided on a wellness initiative including three (3) components:
(1)  employees who elected to enroll in Orion's plan would have to certify that they did not smoke or pay a surcharge ($80/month for single coverage);
(2) employees would have to exercise sixteen (16) times per month on a range of motion machine located in Orion's fitness center or pay a surcharge ($50/month); and
(3) employees would have to either complete a health risk assessment (HRA) at the beginning of the insurance year or pay the entire monthly premium equivalent amount, which was $413.43 for single coverage, $744.16 for limited family coverage, and $1,130.83 for family coverage.  Employees who completed the HRA paid no premium equivalent, but still had to pay their own deductibles, co-pays and out-of-pocket expenses.

Wendy Schobert was an employee in Orion's accounting department from 2003 until May 18, 2009 when her employment was terminated.  Before ultimately opting out of the HRA in April 2009, Schobert raised questions about the new wellness initiative, including the HRA.  She questionied whether medical information collected in the HRA would remain confidential and also questioned how the premium amount was calculated, and believed it was excessive in light of the service fee Orion was paying its third-party administrator, Auxiant.  Due to privacy concerns in which Orion was conducting the HRA's, Schobert sent a letter to Orion's HR director, stating she elected not to participate in the HRA.  Sometime around April 2009, Schobert was "talked to" by her supervisor where Schobert claims she was told to keep her opinions about the new wellness program to herself.  On May 7, 2009, Schobert sent an email challenging and criticizing Orion's then CEO's request for information on how much time employees were using to get water and coffee in light of what Schobert believed were Orion's extravagant spending decisions on a variety of programs.  A few days later, the CEO instructed the CFO to terminate Schobert.

Legal Analysis

The EEOC alleged that Orion's wellness program violated Section 12112(d)(4)(A) of the ADA, which states that a covered entity "shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature of severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity."  Section 12112(d)(4)(B), however, permits employers to conduct "voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site."  The EEOC argued that the HRA was not "voluntary" under (d)(4)(B) given Orion shifted 100% of the health benefit premium to employees who opted out, and also given that Schobert was fired 3 weeks after opting out (she was the only employee to opt out).

Orion argued that its wellness program did not violate section 12112(d)(4)(A) for 3 reasons:
(1) the ADA's safe harbor provision relating to insurance applies to the challenged aspects of the wellness program;
(2) Orion did not "make inquiries" as prohibited by (d)(4)(A) where Orion received only anonymous, aggregated employee responses and results from the HRA; and
(3) the wellness program was voluntary because Orion's employees had a choice regarding whether to participate and sufficient time to make that choice.

The Safe Harbor Provision Found to Not Apply
The district court judge found that the safe harbor provision did not apply, but that the wellness program was voluntary even though Orion shifted 100% of the health premium to any employee that opted out. 

In arguing that their wellness program is protected by the safe harbor provision, Orion relied on Seff v Broward County, 691 F.3d 1221 (2012), and EEOC v. Flambeau, Inc., 131 F. Supp. 3D 849 (W.D. Wis. 2015), the case I mentioned back in January 2016 and cited above.  The EEOC argued that these cases were wrongly decided and the Eastern District noted that the EEOC had since created a new regulation on this issue, which should receive "Chevron deference," and the court agreed.  However, the court also held that even without relying on the regulation, the safe harbor provision did not apply to Orion's wellness program, declining to adopt the holdings of Seff and Flambeau, because Orion's wellness program was not use to underwrite, classify, or administer risk and, in short, Orion's wellness program was wholly independent from its insurance plan.

The Court Held Orion's Wellness Program to be Voluntary
An employer cannot conduct a medical examination or make medical inquiries of an employee, "unless such examination or inquiry is shown to be job-related and consistent with business necessity."  A medical examination or inquiry that is "voluntary" and part of a health program does not violate the ADA.  The Court found Orion's wellness program to be voluntary because, even though opting out means paying 100% of the premium cost, the court noted that "a hard choice is not the same as no choice," citing the U.S. Supreme Court case of United States v. Martinez-Salazar, 528 U.S. 304, 315 (2000).  Thus, the court granted Orion summary judgment as to the EEOC's claim that their wellness program, including the HRA, violated the ADA.

EEOC's Retaliation Claim Allowed to Move Forward
Because Orion's wellness plan was ruled lawful, they argued that the EEOC's retaliation and interference claims fail as a matter of law, because, Schobert did not therefore engage in protected activity.  The ADA's retaliation provision does not protect an employee's right to complain generally.  However, the court noted, it is well established that an employee may engage in protected activity even if the challenged practice is not actually illegal, so long as the employee has a sincere and reasonable belief that she is opposing an unlawful practice.  The court found Schobert's opting out of the HRA to be protected activity.  Therefore, given the conflicting evidence regarding who actually decided to terminate Schobert and why, and the timing of her termination, a fact question remained as to whether there was any causal link between Schobert's protected activity and her termination.

The case is EEOC v. Orion Energy Systems, Inc., September 19, 2016, Griesbach, W.

Wednesday, September 21, 2016

Illinois General Assembly Passes Legislation Limiting Use of Noncompete Agreements

A year ago popular sandwich maker Jimmy John's made news for their use of noncompete agreements for their employees, many of whom were low wage earners.  While many scoffed at these agreements, Jimmy John's fared well in court winning a defense to an injunction filed in federal court in Illinois.  In response, the Illinois General Assembly has passed legislation, the Illinois Freedom to Work Act, effective January 1, 2017, whereby an employer and a low-wage employee are prohibited from entering into any agreement that restricts the employee from performing work for another employer for a specified period of time or that restricts the employee from working in a particular geographic area or working for another employer that is similar to the low-wage employee’s work for the employer.  

A “low-wage” employee is defined as someone who earns $13 per hour or the local, state or federal minimum wage if it is greater than $13. For such workers, an agreement with restrictive covenants as described in the act will be “illegal and void.”

It'll be interesting to see if other states follow suit.  Currently, Wisconsin strongly disfavors noncompete agreements, but legislation was introduced by Republicans in the state to make them easier to enforce, though that legislation doesn't appear to have been passed.

Jury Awards $277,565 to Diabetic Fired by Dollar General After Consuming Juice to Prevent Attack

I had written about a similar case back in 2014 and am surprised to hear this current case went all the way to trial given how the other case survived summary judgment and the facts are fairly similar. 

The Equal Employment Opportunity Commission ("EEOC") announced that a federal jury has awarded their charging party $277,565 ($27,565 in back pay and $250,000 in compensatory damages) in a disability discrimination lawsuit under the Americans with Disabilities Act ("ADA") when Dollar General fired a former cashier, Linda K. Atkins, when she drank a juice, prior to purchase, in response to symptoms of a hypoglycemic attack and to protect the store, despite the fact she had informed the store previously about her condition.  As soon as the medical emergency passed, Atkins paid for the bottle of orange juice that cost $1.69 plus tax.  Later, the district manager and loss prevention manager appeared in the store to address inventory shrinkage and fired Atkins after she admitted to drinking orange juice prior to purchase.

From the article discussing the jury award:
According to EEOC's suit, a cashier at the an insulin-dependent diabetic, told her supervisor she was a diabetic and requested on several occasions that her supervisor allow her to keep juice near the register to prevent a hypoglycemic attack. At trial, the cashier testified that her supervisor told her that Dollar General did not allow employees to keep food or drink near the register. Although Dollar General had an accommodation policy that could have allowed the cashier to keep juice near the register, the employees, including management at the Maryville store, did not know about the policy.
...
EEOC Regional Attorney Faye A. Williams added, "This case highlights another employer who failed to train its employees on the reasonable accommodation requirements under the ADA. Dollar General represents one of the largest variety retailers in the country. Yet it failed to ensure that its employees and management staff knew about its reasonable accommodation policy. It was as if Dollar General had no policy at all. Instead of accepting responsibility for its inaction, Dollar General argued the employee did not need an accommodation. We hope this jury verdict sends a message to its employers, train your employees on the reasonable accommodation requirements under the ADA."
The case is EEOC and Linda K. Atkins v. Dolgencorp, LLC, dba Dollar General Corporation,
(Civil Action No.3:14-CV-441) in U.S. District Court for the Eastern District of Tennessee.