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Did the Supreme Court Discriminate Against Victims of Age Discrimination?

The only good thing to say about the new age discrimination case of Gross v. FBL Financial Services, Inc. is that it will be gone in a flash. 

There are so many things wrong with it that it's hard to know where to begin, and because I really do believe that it will be legislatively overruled in the very near future, I don't want to beat it to death.

Let me say this. For those immersed in discrimination law, the opinion and the dissenting opinions are a must read.

For the rest of the country, I believe that the decision will have little impact and there are several reasons why that's so.

Case Background

The question before the Supreme Court was whether a plaintiff must present direct evidence of age discrimination in order to obtain a mixed motive instruction in a suit brought under the Age Discrimination in Employment Act.

It's a pretty dry academic issue with little to no practical effect in the real world of age discrimination litigation. 

For those interested in the background of the issues presented in the case, you can take a look at the article I wrote on the case when it was argued in March.

What The Court Did In The Gross Case

Instead of deciding the issue before it, the Court did two really strange things in this case:

1. It decided an entirely different issue than the question accepted for review -- one that was not properly presented or briefed.
   
2. The issue it chose to rule on manifested a complete disregard for Supreme Court precedent and Congressional intent.

Here's an attempt at an explanation.

Title VII of the Civil Rights Act of 1964 says that a person can't be discriminated against  in his/her employment "because of " his/her race, color, sex, religion or national origin.

The Age Discrimination in Employment Act ("ADEA") was passed in 1967.  Like Title VII, the ADEA prohibits discrimination in employment  "because of " age.

The Supreme Court has interpreted the "because of" language and so has Congress. 

The issue first came up for interpretation before the Supreme Court in the Price Waterhouse case in 1989.  In that case, Justice Kennedy pushed for a "but for" standard which meant that the plaintiff in a Title VII case would have to prove that "but for" his race (sex, national origin, religion, etc.) he would not have been terminated (demoted, transferred, etc.).

The Price Waterhouse decision rejected the "but for" standard and held that the plaintiff in a Title VII employment discrimination case bears the burden of  proving that membership in the protected class was a "motivating factor in the employment decision" in order to prove that he or she was discriminated against because of it.

Congress ratified the "motivating factor" interpretation when it passed the Civil Rights Act of 1991.The precise language of the statute is as follows:

An unlawful employment practice is established when the complaining party demonstrates that race, color religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice.

What happened in the Gross case last week is that the majority resurrected the"but for" standard and held that:

To establish a disparate treatment claim under the plain language of  the ADEA, the plaintiff must prove that age was the "but-for"cause of the employer's adverse decision.

It's important to point out that Title VII and the ADEA have previously been interpreted uniformly by courts throughout this country including the Supreme Court.

After all discrimination is discrimination, and it make no sense to use different methods, burdens, or standards of proof for age discrimination cases than sex or race discrimination cases, and it's not been done before.

 Why The Decision Makes No Sense

For all of the reasons why the majority opinion written by Justice Thomas (joined by guess who) is in my opinion, just  plainly wrong (there are other words I would love to use but I am constrained to be respectful) I recommend that you take a look at  Justice Stevens scathing dissent. Here's a glimmer:

The Court is unconcerned that the question it chooses to answer has not been briefed by the parties or interested amici curiae.  It's failure to consider the views of the United States, which represents the agency charged with administering the ADEA, is especially irresponsible.

Unfortunately, the majority's inattention to prudential Court practices is matched by its utter disregard our our precedent and the Congress' intent.

Not only did the Court reject the but-for standard in [Price Waterhouse], but so too did Congress when it amended Title VII in 1991. Given this unambiguous history, it is particularly inappropriate for the Court, on its own initiative, to adopt an interpretation of the causation requirement in the ADEA that differs from the established reading of Title VII.

The Court's endorsement of a different construction of the same critical language in the ADEA and Title VII is both unwise and inconsistent with settled law. 

I disagree not only with the Court's interpretation of the statute, but also with its decision to engage in unnecessary lawmaking. 

(Justice Souter agreed with Justice Stevens and also wrote a separate dissent. He raised additional problems with the "but for" language -- not the least of which is that it's a tort concept of causation that has no place in the actual context of a discrimination case and its proof.)

What's Coming

The talk has already started about a Congressional bill which will overturn the decision. As reported in the Washington Times  on Friday:

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Technology Company Hit With Billion Dollar Award

There isn't anything particularly interesting or novel about  Paul Chester's case as far as the law goes. It looks like a straightforward breach of contract case.

What  made me gasp when I read about the case was the size of the award: $4.1 billion !!!!! It's both amazing and unheard of. It's just  SO big.  

The Case

Here's what happened in the case according to the press release from Chester's lawyers.

Paul Thomas Chester was hired by iFreedom Communications, a provider of VoIP and WiFi technology, as its Chief Marketing officer in June of 2004.

The company promised Chester commissions and overrides on gross revenues, as well as the right to receive company stock and other compensation commensurate with Chester's experience in building marketing organizations.

When the time came to pay, iFreedom refused so Chester filed suit. The defendants moved to compel arbitration based on a provision in the employment contract which provided for arbitration in the event of a dispute.

Chester worked for iFreedom until the end of September, 2005 for a total of 15 and a 1/2 months of employment.

The Award

The arbitrator, a retired judge, heard the case and found:

• the defendants obtained Chester's services by means of false pretenses and fraud

• Chester was entitled to unpaid salary, commissions, travel expenses, compensation for unissued company stock and unreturned intellectual property

• the defendants were liable for statutory penalties, interest, attorney's fees, and punitive damages equal to three times the compensatory award

The total was 4.1 billion dollars.

The Los Angeles County Superior Court confirmed the award about ten days ago against iFreedom Communications International Holdings Limited, and it's founder, Timothy Ringgenberg and entered judgment against them.

Here's the breakdown from the court if you you want to look at it and copies of the opinions and awards. Thanks to the Dennis Westlind at World of Work for bringing it to us and for answering this question -- how did this guy get all of this money?

The employment agreement guaranteed him a salary of $12,000 a month plus commissions of 5 percent of gross sales; if he was fired without cause, he would continue to receive commissions. iFreedom also was supposed to provide Chester with 1.1 million shares of common stock upon hiring and another 600,000 shares if he met certain sales targets . Apparently, iFreedom did really, really well. Sales, stock and interest added up, and in a big way.

That's how it happened. The company was earning tons of money, much of it due to Chester -- and it refused to pay him what he was clearly entitled to receive. They also lied to him and stole from him.  It's pretty simple stuff  with very large numbers.

(For more about the case, you may  also want took at  Phillip Loree's article. He makes the point that the Arbitration Fairness Act of 2009, if passed, would render pre-dispute agreements which require arbitration of employment disputes --such as Mr. Chester’s dispute with iFreedom -- unenforceable. It's a good point, but  I have no reason to believe that the outcome in this case would have been any different.)

Lessons To Be Learned

So what can we say about this case?  What lessons can we learn? How about this:

• Chester was smart to have a really good employment contract
  

• iFreedom failed to fulfill its promises when it terminated Chester without cause which entitled Chester to the compensation promised in the contract

• iFreedom engaged in "a pattern of  despicable conduct" regarding Chester, including fraud and conversion, according to the arbitrator
  

• Despicable conduct can result in punitive damages -- whether it's awarded by a judge, jury or arbitrator  
  

• Successful companies can do really stupid things

It's not rocket science. It's just the way it is.

Image: http://www.freeclipartnow.com

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Stereotyped Statements As Discrimination Evidence

Employment decisions based on stereotyping can be illegal. For example, comments suggesting that "women should be home with children instead of working", or that "Hispanics are lazy", or that "older workers can't adapt to change" -- can be used as proof in discrimination lawsuits and sometimes are.

I wrote recently about the case of Chadwick v. Wellpoint. In that case Laurie Chadwick, the mother of four --including a set of triplets -- was denied a promotion because she had "too much on her plate." It's an example of a fairly typical case in which we see gender stereotyping at play.

There was no evidence that Ms. Chadwick's family obligations were actually interfering with her work. Rather, her superiors simply assumed this would occur. The court in Chadwick v. Wellpoint stated: "the assumption that a woman will perform her job less well due to her presumed family obligations is a form of sex-stereotyping and ... adverse job actions on that basis constitute sex discrimination."

What we haven't seen much of -- in fact, haven't seen any of -- are cases in which evidence of gender stereotyping has been used to prove discrimination against a man -- certainly not a man who has been accused of sexual harassment. That's why the new case of Sassaman v. Gamache from the Second Circuit Court of Appeals is so interesting and important.

Facts of the Case

The Workplace Relationship Leading to He-Said, She-Said Harassment Complaint.

Carl Sassaman worked for the Board of Elections for Dutchess County, New York. He worked with a woman named Michelle Brant. According to the evidence, Brant and Sassaman spent time together. They ate lunch together, smoked cigarettes together, and considered themselves to be friends.

At some point, Brant became Sassaman's boss and their relationship soured. According to the testimony, Sassaman asked Brant out for a drink. She said no, so he suggested they meet for coffee. She declined that offer too, but according to Sassaman, she began to reveal intimate aspects of her personal life to him.

During that same conversation, as the story goes, she asked Sassaman whether he wanted to have a one-time sexual encounter with her. His reaction to the overture was that it was not a good idea to be friends with her anymore.

Brant had a different recollection of the conversation. She testified that in response to Sassaman's changed demeanor towards her, she asked Sassaman whether "he was going to let their friendship go down the tubes because she did not want to have sex with him."

A couple of months and a few incidents later, Sassaman learned from David Gamache -- the Board Commissioner -- of Brant's complaint that he was harassing and stalking her. Gamache told Sassaman to stay out of the office.

The Employer's Inadequate Response to the Harassment Complaint.

Brant filed a written complaint against Sassaman, which Gamache referred to the Dutchess County Sheriff's Department for investigation. The sheriff's investigation found insufficient evidence to support any type of criminal charge.

Gamache did not refer the matter for an internal investigation. Instead, a week after the sheriff's report, Gamache called Sassaman and told him that he would be terminated unless he chose to resign.

The "Smoking Gun" Comments

According to the testimony, Gamache defended his decision with this explanation:

• "I really don't have any choice. Michelle knows a lot of attorneys; I'm afraid she'll sue me."
• "And besides you probably did what she said you did because you're a male and nobody would believe you anyway."

The Lawsuit

Sassaman resigned, feeling that he had no other choice, and then filed a lawsuit alleging that he was terminated on the basis of sex stereotyping in violation of Title VII of the Civil Rights Act of 1964. The District Court judge threw out the case on the grounds that Sassaman failed to provide any evidence of sex discrimination.

The Second Circuit reversed. It found that the evidence of stereotyping -- Gamache's statement that because Sassaman was a man he probably did sexually harass Brant as she claimed -- was sufficient to support Sassaman's sex discrimination claim. The court's decision was soundly based on precedent concerning sex stereotyping -- developed in cases brought by women.

Legal Background on Sex Stereotyping

Back in 1989, the Supreme Court of the United States decided the landmark case of Price Waterhouse v. Hopkins. In that case, Ann Hopkins, a senior manager at the accounting firm of Price Waterhouse, was considered for, but denied partnership.

Statements in the review process leading to that decision described Hopkins as "an outstanding professional" who had a "deft touch," a "strong character, independence and integrity." Clients described her as "extremely competent, intelligent," "strong and forthright, very productive, energetic and creative." Others had a different view -- and a sexist one at that:

• One partner described her as "macho."


• Another suggested that she "overcompensated for being a woman"


• A third advised her to take "a course at charm school."


• Several partners criticized her use of profanity; in response, one suggested that they objected to this only "because it's a lady using foul language."

Hopkins sued for sex discrimination under Title VII. The Supreme Court, for the first time, addressed the legal significance of sex stereotyping in the context of Title VII case:

As for the legal relevance of sex stereotyping, we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotype associated with their group ... "In forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes."

As applied to Ms. Hopkins, the Court went on to say:

It takes no special training to discern sex stereotyping in a description of an aggressive female employee as requiring "a course at charm school."

Nor. . . does it require expertise in psychology to know that, if an employee's flawed "interpersonal skills" can be corrected by a soft-hued suit or a new shade of lipstick, perhaps it is the employee's sex, and not her interpersonal skills, that has drawn the criticism.

While the Price Waterhousecase was hugely important at the time for victims of this type of discrimination, its main significance has had to do with technical issues regarding burdens of proof -- and little with to do with blazing a trail for litigation based on sex stereotyping evidence. So it came as a big surprise when the Second Circuit relied on the Price Waterhouse language above and reversed the district court in the Sassaman case.

Sex Stereotyping Sassaman As Likely To Harass female Employees

Holding no punches, the court in Sassaman stated that Gamache's decision to terminate Sassaman because men, as a group, have a propensity to sexually harass women, was "overt sex stereotyping." According to the Court:

Gamache appears to have defended his decision to credit Brant's allegations of sexual harassment by pointing to the propensity of men, as a a group, to sexually harass women. . .

A jury could reasonably construe Gamach's statement as persuasive evidence that he pressured Sassaman to resign because of his discriminatory assumptions about the propensity of men to sexually harass their female co-workers.

Failure to Investigate the Harassment Complaint

Compounding the problem for this employer was that it failed to investigate Brant's complaint. That too, according to the Court, constitutes evidence in support of Sassaman's claim. As the Court pointed out, when faced with a sexual harassment complaint:

The failure of an employer to conduct an adequate investigation or to undertake an appropriate response can constitute evidence in support of a Title VII plaintiff's allegations.

What's more, fear of a lawsuit , another defense raised by this employer, was also deemed to be a lousy excuse to terminate Sassaman. According to the Second Circuit:

An employer many not rely on an alleged fear of a lawsuit as a reason to shortcut its investigation of harassment and to justify an employment decision adverse to the putative harasser that itself violates Title VII.

This part of the decision is particularly interesting in light of the City Of New Haven's position in the Ricci case currently pending in the Supreme Court -- see Workplace Prof. Blog, suggesting that the employer in Sassaman may have felt in something of a bind, liable to the coworker if the allegations of harassment weren't taken seriously"; the Ricci decision is also at the center of the controversy surrounding the Sotomayer nomination.

Conclusions

In sum, Sassaman prevailed for two related reasons:

1. He presented evidence which constituted male sex stereotyping.
2. Because of such stereotyping, his employer credited the woman's version of the sexual harassment events and failed to properly investigate the charges she lodged against him.

While the law prohibiting sex stereotyping as the basis for an adverse employment decision has been around for a long time, there are a paucity of decisions that rely on it to substantiate favorable outcomes for the plaintiff.

There has never been a case that I know of where a sex stereotyping argument has been used in favor of a man who claims to have been improperly accused of sexual harassment. What this means is that men who have been victimized by false accusations of sexual harassment now have a powerful case to rely on that did not previously exist. Those deemed guilty of sexual harassment based on a "boys will be boys" knee-jerk reaction will finally have some relief.

Also, the defense of "we might get sued" may not carry the day to justify an unsubstantiated termination decision in such a situation. (We'll have to wait and see if the Supremes address this aspect of Ricci, in which the alleged discrimination may likewise have been motivated by fear of a lawsuit.) Employers, it seems to me, have a whole new can of worms to worry about.

Image: verbotomy.com

This post  originally appeared in George's Employment Blawg.

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For all employees who are subjected to a sexually hostile work environment, the recent case of Gallagher v.. C.H. Robinson  from the Sixth Circuit Court of Appeals is fantastic news -- and that's an understatement.

There are so many women who are faced with a regular onslaught of  dirty jokes, pornography, demeaning references about women, and sexual bantering in the workplace.  For those victims, this case is a godsend.

Here's what happened in the case. 

Julie Gallagher worked for C.H. Robinson Worldwide Inc. in a sales position in the Cleveland office. The area in which she worked had 20 employees and 3 support staff.

The sales staff worked in cubicles that were organized in pods in an open floor plan. Short dividers between the cubicles provided little privacy.

During the four months during which Gallagher worked at C.H.Robinson ("CHR") she described a “locker room” atmosphere characterized by unprofessional behavior and an environment that was hostile to women. 

According to the evidence the work atmosphere was filled with:

• Prevalent use of foul language
  

• References to female customers, drivers, and co-workers as" bitches, whores, sluts, dykes and cunts"
  

• Pornography and nude pictures of girlfriends in various sexual poses
  

• Dirty jokes and graphic discussions of sexual liaisons, fantasies and preferences on a daily basis

In addition, Gallagher was personally:

• Called a bitch in anger on several occasions
  

• Called fat and referred to as a “heifer with “milking udders”

• Told that by hiring her CHR covered it’s “girl quota and fat quota”

Gallagher complained frequently to the branch manager, Greg Quest, but things only got worse. Four months after starting, and following an incident during which some drunk male so-workers “flipped her off”, she finally quit and took a job working for a former employer.

Gallagher filed a case for hostile environment sexual harassment under both state (Ohio R.C. 4112.02)  and federal law (Title VII of the Civil Right Act of 1964).

What's truly shocking about this case is that the district court judge -- for reasons that I am at a complete loss to genuinely understand -- threw out the case.

Fortunately, the Sixth Circuit wrote a fantastic opinion reversing the district court judge. Here are the highlights and the meat of the decision -- all of which will be very helpful to other victims of this sort of disgusting conduct in the future.

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