Gibbons Law Alert

Gibbons Law Alert

Author: Richard S. Zackin

The Third Circuit Goes Its Own Way on ADEA Disparate Impact Claims

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Posted in Discrimination

On February 15, 2017

The Age Discrimination in Employment Act (ADEA) protects from discrimination of employees who are at least 40 years of age. Recently, in Karlo v. Pittsburgh Glass Works, the United States Court of Appeals for the Third Circuit departed company with three of its sister Circuits by holding that plaintiffs asserting a claim of “disparate impact” under the ADEA may establish a disparate impact with comparisons between subgroups of employees and need not show that a challenged employment practice has had an adverse impact on employees 40 years of age or older compared to its impact on employees under 40. Thus, the Court permitted to go forward with a disparate impact claim based on a comparison between employees at least 50 years of age with employees under 50. The decision will have a profound impact on employers’ assessments of their potential ADEA liability for disparate impact claims and on the way ADEA disparate impact claims are litigated in the Third Circuit. Background To establish a claim of disparate impact discrimination under the ADEA, a plaintiff must show, through statistical evidence, that the employers implemented a facially age-neutral employment practice that fell more harshly on the protected group. If this showing is made, the employer can defeat the claim by demonstrating that the practice in question is...

Ninth Circuit Holds Class Action Waivers Illegal Under the NLRA

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Posted in Alternative Dispute Resolution

On August 30, 2016

On August 22, 2016, in Morris v. Ernst & Young, LLP, the Ninth Circuit Court of Appeals joined the Seventh Circuit Court of Appeals in holding that class action waiver provisions in arbitration agreements governing employment disputes are illegal under the National Labor Relations Act (NLRA or the Act) because these waivers interfere with the right of employees to engage in concerted activity protected by Section 7 of the Act (Section 7). The holdings of these courts are in indirect conflict with an opinion of the Fifth Circuit Court of Appeals, which upheld the validity of such waivers in the face of a challenge under Section 7. Employers in jurisdictions whose courts have not yet decided this issue, and who employ such waivers in their arbitration agreements or otherwise, should be prepared for attacks on their arbitration agreements by employees seeking to bring class or collective actions or by the National Labor Relations Board (NLRB).

N.J. Supreme Court Invalidates Agreements to Shorten the LAD’s Statute of Limitations

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Posted in Discrimination

On June 20, 2016

On June 15, 2016, the New Jersey Supreme Court, in Rodriguez v. Raymours Furniture Company, Inc., held that an agreement by an employee to bring claims against his employer within six months of the allegedly wrongful employment action was unenforceable insofar as the agreement applied to claims brought under the New Jersey Law Against Discrimination (“the LAD”). In 1993, the Court had held that New Jersey’s general two-year statute of limitations for personal injury actions provides the appropriate limitations period for LAD claims. In Raymours, the Court ruled that the employer’s attempt to reduce this limitations period to six months undermined the LAD’s specific enforcement scheme for the elimination of discrimination and thus, for public policy reasons, could not be judicially sanctioned. In addition, the Court found that the particular agreement at issue, set forth as part of the boilerplate in the employer’s standard employment application form, constituted an unenforceable contract of adhesion.

Second Circuit Rejects the Department of Labor Test for the Lawful Employment of Unpaid Interns

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Posted in Wage and Hour

On August 17, 2015

In a much anticipated decision in Glatt v. Fox Searchlight Pictures, Inc., the United States Court of Appeals for the Second Circuit recently adopted the “primary beneficiary” test for determining whether individuals performing services for no compensation have been properly classified as “unpaid interns” or are, in fact, “employees” who have been improperly denied wages mandated by the Fair Labor Standards Act (FLSA). The district court, in an opinion that received a great deal of attention, had ruled that the plaintiffs were employees for FLSA purposes, applying the factors enumerated in the test proposed by the U.S. Department of Labor (DOL). The Second Circuit rejected the DOL’s test and, accordingly, reversed the district court’s order granting the plaintiffs’ motion for partial summary judgment and their motion to certify a collective action.

Supreme Court Rules an Employer’s Failure to Accommodate a Job Applicant’s Religious Practice Violates Title VII Without Proof the Applicant Requested An Accommodation

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Posted in Discrimination

On June 4, 2015

In its much anticipated decision in Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc., the U.S. Supreme Court has held that a prospective employee who was turned down for a job because she wore a headscarf, which the employer suspected was worn for religious reasons, can proceed with her claim of religious discrimination under Title VII of the Civil Rights Act of 1964, although when she applied for the job the applicant never requested permission to wear the headscarf as an accommodation to her religious practices. Employers should be aware that the Court’s decision (1) imposes on an employer an affirmative obligation to reasonably accommodate the religious practices of its employees and prospective employees and (2) exposes an employer to potential liability for intentional discrimination, and thus for compensatory and punitive damages, for failing to make such accommodations.

Supreme Court Rules ERISA Statute of Limitations Does Not Bar Breach of Fiduciary Duty Claim Challenging 401(k) Plan Investments Made More Than 6 Years Before Filing of the Claim

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Posted in Employee Benefits

On May 27, 2015

The statute of limitations governing breach of fiduciary duty claims brought under the Employee Retirement Income Security Act (“ERISA”) provides that such claims are untimely if not brought within 6 years after “the date of the last action which constituted the breach or violation” or “in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation” (29 U.S.C. § 1113). In Tibble v. Edison International, the U.S. Supreme Court ruled that ERISA’s statute of limitations did not bar plaintiffs from pursuing their breach of fiduciary duty claim arising out of investments made by their employer’s 401(k) plan, although the investments were made more than 6 years before plaintiffs filed their claim. The Court held that ERISA plan fiduciaries have an ongoing duty to monitor plan investments and to remove imprudent investments. As long as the alleged breach of this continuing duty occurred within 6 years of suit, a claim challenging a fiduciary’s failure to act will be timely. The Court rejected the argument that only “a significant change in circumstances” triggers the duty to remove imprudent investments.

Sixth Circuit Upends EEOC Victory in Telecommuting Case

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Posted in Disability

On May 13, 2015

We previously reported on a decision by a panel of the United States Court of Appeals for the Sixth Circuit in Equal Opportunity Employment Commission v. Ford Motor Co., in which the panel held that the EEOC was entitled to a jury trial on its claim that Ford discharged an employee in violation of the Americans with Disabilities Act (“ADA”) after it denied her request to work from home 4 days per week as an accommodation for her irritable bowel syndrome (“IBS”). In an en banc decision the Sixth Circuit has now reversed the original panel’s decision, concluding that the district court properly granted Ford’s motion for summary judgment on the ADA claim. In so ruling, the Court credited Ford’s business judgment that the employee’s presence in the work place was an essential function of her job, and thus her request to telecommute four days per week was not a request for a reasonable accommodation to which Ford had to accede. The EEOC had heralded the original panel’s decision as a major victory. The Sixth Circuit’s en banc reversal of that decision should be cause for equal celebration by employers.

U.S. Supreme Court Requires EEOC to Attempt Conciliation Before Suing

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Posted in Discrimination

On May 5, 2015

In Mach Mining LLC v. Equal Employment Opportunity Commission, the United States Supreme Court was presented with the issue of whether the EEOC must attempt to conciliate an employer’s alleged violation of Title VII of the Civil Rights Act of 1964 before initiating a lawsuit against the employer and, if so, to what extent a court may review those conciliation efforts. The Court concluded that the EEOC must attempt to engage in conciliation, but that the scope of a court’s review of the EEOC’s efforts is narrow. Post-Mach Mining, an employer that attempts to challenge a lawsuit brought by the EEOC on the grounds that the agency’s conciliation efforts were insufficient will be fighting an uphill battle.

Supreme Court Upholds Department of Labor’s Authority to Issue Interpretive Rules Without Public Notice or Comment

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Posted in Wage and Hour

On March 25, 2015

Rules promulgated by agencies of the federal government can be divided into those which have the force and effect of law and those which are merely “interpretative” or provide general statements of policy concerning the agency’s view of the law. When an agency wishes to promulgate rules having the force and effect of law it must comply with the requirements of the Administrative Procedures Act (APA) by, among other things, publishing the proposed rules in advance, allowing sufficient time for public comment and responding to significant comments received. In Perez v. Mortgage Bankers Association, the United States Supreme Court addressed the issue of whether the Department of Labor (the “DOL”) was free to reverse itself about the proper interpretation of the laws over which it has enforcement responsibility without giving notice or allowing public comment of the proposed change. The Court unanimously held that the DOL was free to do so.

Federal Court of Appeals Addresses Testing Employees for Lawful Prescription Drug Use

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Posted in Disability

On September 23, 2014

The Americans with Disabilities Act (“ADA”) makes it unlawful for an employer to either require its employees to undergo medical examinations or make disability-related inquiries that cannot be justified as “job related and consistent with business necessity.” The statute, however, expressly provides that testing an employee for illegal drug use is not a “medical examination” that must be justified under this standard. But what about an employer, who, because of safety concerns, requires employees to be tested for substances for which the employee has a valid prescription? Does such a test constitute a medical examination or a disability-related inquiry? In Bates v. Dura Automotive Systems, Inc., the United States Court of Appeals for the Sixth Circuit recently undertook to provide guidance on this issue. The Court concluded that whether testing for prescription drugs constitutes a medical examination or a disability-related inquiry for ADA purposes depends on the specific facts of the case at hand and, ultimately, may be an issue for a jury to resolve. It is clear that this is an area where employers must tread carefully. The difficulty of implementing a prescription drug testing program that will comply with the ADA suggests that such testing should be used only as a last resort when other safety measures have proved insufficient.

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