Clites Goes To Work For TeleTech And Signs An Arbitration Agreement

The plaintiff, Jill Clites, went to work for TeleTech in October 2004 as a Customer Service Representative. During new employee orientation, Clites met with a human resources representative for about 90 to 120 minutes, during which time Clites reviewed and signed a large number of documents related to the orientation. In the record before the West Virginia Supreme Court, there were disputes over whether individual documents were discussed with Clites and whether she was required to sing all the documents during the orientation session, but it appears that during that session Clites signed an arbitration agreement which TeleTech required of most or all new employees.

Clites remained employed at TeleTech until July 12, 2007, when she was terminated. She then filed suit for sexual harassment and retaliation. Clites alleged she complained about the sexual harassment, that TeleTech failed to take appropriate corrective action, and that TeleTech retaliated against her for the complaint by firing her.

Clites Files Suit In West Virginia Circuit Court

Clites filed suit in West Virginia Circuit Court in Morgantown. TeleTech then invoked the arbitration agreement by filing a motion to dismiss the lawsuit and by filing a separate lawsuit in federal court arguing that Clites waived her rights to a jury trial  by signing the arbitration agreement. In essence, TeleTech argued that Clites gave up her right to file suit and obtained a jury trail by signing the arbitration agreement, and that her only remedy was to file an arbitration proceeding (with the American Arbitration Association) pursuant to the arbitration agreement.

Judge Russell Clawges ruled that the arbitration agreement was a “contract of adhesion”, which simply means that it was a “standardized form, containing no individual terms, offered [by the employer] on essentially a take it or leave it basis.” Contracts of adhesion are usually described as contracts offered by the substantially more powerful party in a transaction as allowing for now negotiation–offered on a “take it or leave it” basis. Courts sometimes but not always scrutinize “adhesion contracts” more carefully, especially where they do in fact reflec substantial disparities in negotiation power.

Judge Clawges did not automatically conclude that the arbitration agreement was therefore not enforceable. He looked at the more controversial terms: requiring arbitration to take place in Denver, Colorado (instead of near the place of employment, Morgantown, West Virginia(, and requiring the parties to pay their own expenses incurred in the arbitration (which would make the arbitration proceeding significant more expensive for the plaintiff, compared to the cost of filing suit in West Virginia Circuit Court). Those terms would make arbitration significantly more burdensome and expensive for the plaintiff, compared to filing suit and seeking a jury trial. Those results would have made it signicantly more likely that a Court would decide the arbitration contract to be “unconscionable”, which would made it unenforceable.

TeleTech, to address these more burdensome terms of the arbitration agreement, stipulated (agreed) before Judge Clawges that the location of the arbitration would be Morgantown and that TeleTech would pay for all arbitration costs which would exceed what Clites would have had to pay to file suit in West Virginia Circuit Court.

Judge Clawges, based on the TeleTech stipulation, concluded that the arbitration agreement was not unconscionable, and there concluded it was enforceable.

Clites then appealed to the West Virginia Supreme Court.

The Federal Arbitration Act Does Not Preclude Review

The first issue for the Supreme Court was whether the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), precluded any scrutiny at all over the arbitration agreement in question. The United States Supreme Court has held that the “FAA” established the policy of favoring arbitration of disputes. Moses H. Cone Memorial Hospital v. Mercury Construction Corporation, 460 U.S. 1, 24 (1983). The US Supreme Court also held that the FAA preempts state laws which “undercut” the enforceability of arbitration agreements. Southland Corporation v. Keating, 465 U.S. 1, 11 (1984); Perry v. Thomas, 482 U.S. 483 (1987). This rule also applies to claims specifically created by state legislatures, such as the discrimination claims under the West Virginia Human Rights Act. Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985).

While the West Virginia Supreme Court in Clites recognized the fact that the FAA preempts state laws which would undercut the enforceability of arbitration agreement, it held that the “issue of whether an arbitration agreement is a valid contract if a matter of state contract law” and is “capable of state judicial review.”

The Abitration Agreement In Issue Was Not Unconscionable

So the West Virginia Supreme Court proceeded to review TeleTech’s arbitration agreement to determine whether it was enforceable under West Virginia law.

The standard for reviewing arbitration agreements was set out by the West Virginia Supreme Court as follows: An arbitration clause is “presumed” to be “bargained for” and is presumed to intend that the arbitration proceeding is the “exclusive means of resolving disputes arising under the contract”. However, where a party alleges that the arbitration agreement  was “unconscionable or was thrust upon him because he was unwary and taken advantage of, or that the contract was one of adhesion”, then the question is whether the arbitration agreement was “bargained for and valid”, and that question is a “matter of law for the court to determine by reference to the entire contract, the nature of the contracting parties, and the nature of the undertakings covered by the contract.” (quoting Board of Education of the County of Berkeley v. W. Harley Miller, Inc., 160 W. Va. 473, 236 S.E.2d 439 (1977) (Syllabus Point 3).

The West Virginia Supreme Court, like Judge Clawges at trial, concluded TeleTech’s arbitration agreement was a “contract of adhesion”. But that did not “necessarily means that it is invalid, and to determine its validity we look to other factors”

The next step was to determine “whether the Agreement is unconscionable or was thrust upon [the plaintiff] because [she] was unwary and taken advantage of.” An analysis of unconscionability “must focus on the relative positions of the parties, the adequacy of the bargaining position, the meaningful alternatives available to the plaintiff, and the existence of unfair terms in the contract.” (quoting Art’s Flower Shop, Inc. v. Chesapeake and Potomac Telephone Company of West Virginia, Inc., 186 W. Va. 613, 413 S.E.2d 670 (1991)).

The Supreme Court then focused on the fact that TeleTech’s human resources employee had a meeting of substantial length (90 to 120 minutes) with Clites, and Clites was required, like all other new employees, to sign an arbitration agreement. Furthermore, apparently because of TeleTech’s stipulation, the arbitration agreement required arbitration in Morgantown instead of Denver, and TeleTech agreed to pay the costs of arbitration beyond the costs of filing suit in Circuit Court.

The Court therefore held that TeleTech’s arbitration agreement was not unconscionable and was therefore enforceable. The result of the decision is therefore that Clites will be required to pursue her claim before the American Arbitration Association, and will not be allowed to proceed to a jury trial in West Virginia Circuit Court.

Importance Of The Clites Decision

The first important aspect of the Clites decision is that the reasonableness of an arbitration agreement should be examined in terms of the agreement itself plus any stipulations (agreements) by the employer that might soften the burdensome effects on the employee/plaintiff.  The fact that TeleTech’s arbitration agreement required the arbitration to take place in Denver, and required the employee to bear the substantially higher cost of arbitration, would likely have created problems for the enforceability of the agreement. But TeleTech’s stipulations essentially removed those issues.

Therefore, employers faced with troubling terms in an arbitration agreement, from the standpoint of enforcing it in court, may stipulate after the employee files suit to modify the arbitration agreement to make it more likely to pass judicial scrutiny concerning its enforceability.

The second important aspect of Clites is that the Supreme Court carefully limited its ruling to the facts of that case, and indicated that under other circumstances it would carefully scrutinize the arbitration agreements:

• There may be questions of whether “sufficient consideration was given in exchange for the” arbitration agreement. The Court noted that it had previously ruled that an employer’s “promise merely to review an employment application in exchange for a job applicant’s promise to submit employment-related disputes not associated with the application process to arbitration does not represent consideration sufficient to create an enforceable contract to arbitrate such employment disputes.” (quoting State ex rel. Saylor v. Wilkes, 216 W. Va. 766, 613 S.E.2d 914 (2005)).
• The Court notes that its precedent has “historically given close scrutiny to adhesion contracts that abrogate a party’s constitutional entitlement  to access to the courts.”
• The court would be “troubl[ed]” by forum selection clauses, contained in contracts of adhesion, which would require an employee to arbitrate disputes “in far-away jurisdictions, remotely removed from the employee’s actual place of employment or residence.”
• It would be “troubling” for an arbitration agreement to require the employee to be “subject to the substantive law of a far-away jurisdiction”.

This Clites decision is discussed in my chart of West Virginia Supreme Court decisions.

Prepared by Drew M. Capuder (contact information)

Click the line below to open the chart, which is an Adobe Acrobat PDF:

WV Supreme Court Employment Decisions

(click here to download the free Acrobat Reader, if you don’t already have it installed on your computer).

Prepared by Drew M. Capuder (contact information)

• $200,450 for past lost wages and benefits,

• $900,000 for future lost wages and benefits,

• $150,000 for humiliation,

• $150,000 for emotional distress, and

• $350,000 in punitive damages.

Under the West Virginia Human Rights Act (which prohibits age and other forms of discrimination in the workplace), Nagy’s counsel will file a motion additionally requesting attorneys’ fees and expenses.

Read the articles about the trial result in the Charleston Daily Mail and The Charleston Gazette and on WSAZ Television’s site.

James Nagy filed suit in Charleston in March 2008 against West Virginia American Water Company, alleging that he was fired in March 2007 because of his age at 53, after 23 years of employment.

James Nagy was represented by Maria W. Hughes and Stephen Weber at Kay Casto & Chaney PLLC. West Virginia American Water Company was represented by Mychal Schulz at Dinsmore & Shohl LLC.

The case is pending in Circuit Court in Kanawha County, West Virginia, before Judge Jennifer Bailey-Walker.

Prepared by Drew M. Capuder (contact information)

Within a few hours of President Obama’s announcement, the CATO Institute and The Heritage Foundation had significant articles devoted to attacking the nomination. Rush Limbaugh this afternoon called Judge Sotomayor a “racist”. Sean Hannity called her a “radical” who had made “outrageous” and “amazing” statements. The liberal sites raced out articles attacking the attackers and defending Judge Sotomayor (Talking Points Memo and The Huffington Post).

The first item that has been circulating about Judge Sotomayor is a statement she made about appellate courts making “policy” during a panel discussion at Duke University in 2005 (note: this clip is lengthier, and provides much more context, than the clips played on most news sites):

This statement is being used to characterize Sotomayor as an “activist” judge who doesn’t recognize that judges “interpret” (but do not “create”) law. Personally, I think that argument is nonsense. Judges all the time analyze statutory and constitutional issues by considering the impact in the real world of their potential decisions. Those are “policy” considerations. For example:

• If an employee has to file a charge of discrimination with the EEOC within 300 days of the “unlawful employment practice”, does that mean 300 days of the negative performance review that results in lower pay for the employee, or within 300 days of each pay check the employee receives pursuant to the negative performance review? That was the issue in Ledbetter v. Goodyear Tire & Rubber Company, 550 U.S. 618, 128 S. Ct. 2162 (2007).The Supreme Court in Ledbetter made a number of policy-based arguments in favor of its limitation rule, including discussion of a “policy of repose” which makes it “unfair” for the wronged party not to put the employer on notice of a claim within a specific period of time. See my discussion in this blog of the decision.
• If employment discrimination law prohibits retaliation against an employee who opposes discriminatory conduct, what is the level of severity of the employer’s action that is necessary for the courts to recognize a retaliation claim? That was the issue in Burlington Northern & Sante Fe Railway Co. v. White, 548 U.S. 53 (2006).  The Supreme Court examined a broad range of policy considerations that focused on the burdens on employers of various possible rulings, and whether employee complaints would be encouraged or discouraged by possible rulings. See my discussion in this blog on the decision.

There is simply no bright (or muddy) line between “law” and “policy”, and judges routinely formulate the most appropriate rule of law by examining how the various options are consistent with or promote various policy considerations.

By the time a case gets to the level of a court of appeals, the judges are frequently presented with competing policy considerations which the parties will argue undergird a proposed interpretation of a statute or a constitutional provision. For example, in Ledbetter v. Goodyear Tire & Rubber Company, 550 U.S. 618, 128 S. Ct. 2162 (2007), the Supreme Court had to interpret a provision of Title VII of the CIvil Rights Act of 1964 which dealt with when a person has to file a charge of discrimination with the EEOC. Within 300 days of a discriminatory performance review in (for example) 2001 which supressed a woman’s pay checks compared to her male peers, or within 300 days of a discriminatory pay check she received in 2008 as a consequence of that performance review? It would be intellectually dishonest to suggest that the answer was crystal clear from the language of the statute. So the Courts, routinely, examine the policy consideration behind the statute in question. In Ledbetter, here is an incomplete list of the competing policy considerations that were relevant to the Court’s decision, and all of these policies are unarguably reflected in the statute (Title VII) and relevant legal principles:

• The policy that Title VII should provide a remedy to the employee for discriminatory decisions by employers.
• The policy that Title VII should act as a deterrent to prevent future discrimination by employers.
• The policy that claims should be presented with reasonable promptness to give defendants fair notice of the claims.
• The policy that claims should be presented with reasonable promptness because claims can be adjudicated more competently before witnesses, memories, documents, or other evidence fade or disappear.

The Supreme Court in Ledbetter focused on the policies relating to prompt presentation of claims, and ruled that Ledbetter was required to file her charge with the EEOC within 300 days of the discriminatory performance review. The dissent in Ledbetter focused on the remedial and preventive policies in Title VII. Congress then overruled the Ledbetter decision and concluded that the Supreme Court had misinterpreted the relevant provisions in and policies of Title VII. The Supreme court, in its decision, by any reasonable definition, “made policy” in the result it reached. So did Congress.

Stay tuned, and I’ll discuss the Sotomayor nomination in coming days and weeks.

Prepared by Drew M. Capuder (contact information)

This was an age discrimination case under the Age Discrimination in Employment Act, (ADEA). The plaintiff was a member of a union, and the collective bargaining agreement (union contract) required submitting age discrimination claims to binding arbitration.

The US Supreme Court had previously ruled, but not in a labor union setting, that arbitration agreements for ADEA claims were enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26-33 (1991)). So the real issue in Penn Plaza was whether there would be a different result because of the union contract setting and the National Labor Relations Act.

The Supreme Court in Penn Plaza, in a divided decision (5-4), held that the arbitration agreement contained in the union contract was enforceable.

The enforceability of arbitration agreements for employment disputes has been a political hot potato, and The Arbitration Fairness Act of 2009 (H.R. 1020) was introduced in the US House on February 12, 2009. The bill has 36 co-sponsors, and has been referred to the House Committee on the Judiciary. If it passes, it would essentially overrule Penn Plaza and other cases which have held that employment pre-dispute arbitration agreements are enforceable.

Prepared by Drew M. Capuder (contact information)

Many people have the incorrect understanding that, in West Virginia, an employer is legally required to allow an employee to review the employee’s personnel file. There is currently no such legal requirement, but the pending HB 3032 will change that if it is passed.

You can review the full text of the bill, and monitor its status on the Legislature’s site.

Prepared by Drew M. Capuder (contact information)

Appointments to these federal judicial positions require the confirmation by the US Senate. The Democrats control at this time 58 votes in the Senate, through 56 Democrats and 2 Independents (Joe Lieberman, CT; Bernie Sanders VT) who caucus with the Democrats. If Al Franken eventually is declared the winner in Minnesota, which is expected, the democrats will have 59 votes. President Obama only needs 51 votes to confirm one of his judicial nominations. If the Republicans chose to filibuster any of President Obama’s nominations, the Democrats need 60 votes for cloture to cut off the filibuster and force a vote (cloture requires a three-fifths vote of the voting Senators). If the Democrats will be starting with 59 votes, they will likely frequently be able to “peel off” a Republican or two to break the filibuster.

Federal court of appeals nominations are usually made from lawyers with significant prior judicial experience. So the pool of lawyers to be considered will likely by the current federal district judges, and, less likely, current state court judges.

Given Presidential history since 1980, the substantial majority of federal judges are appointees of Republican Presidents (20 years of Republican presidency versus 8 years of Democrat presidency).

Of the current 11 judges on the Fourth Circuit, 6 were Republican appointees and 5 were Democrat appointees (although Judge Gregory was a “hybrid” having originally been appointed by President Clinton and then re-appointed by President GW Bush). You can view a chart on Wikipedia that sets out the lineup of current judges and the Presidents who appointed them

Assuming President Obama fills all 4 current vacancies, then we will have a realignment on the Fourth Circuit to: 9 Democrat appointees, and 6 Republican appointees.

Prepared by Drew M. Capuder (contact information)

There are currently only 2 members, so there are 3 vacancies. Wilma Liebman is considered liberal and pro-union. Peter Carey Schaumber is considered conservative and pro-management.

President Obama will be able to fill the 3 vacancies, with a likely significant shift in labor law in the United States.

Prepared by Drew M. Capuder (contact information)

Ms. Crawford Responds to an Investigation into Sexual Harassment

Here is what happened: Rumors started circulating about sexually inappropriate behavior by a male supervisor, Gene Hughes, at “Metropolitan Government of Nashville and Davidson County” (“Metro”). A human resources employee started investigating, and asked Vicky Crawford whether she had seen any inappropriate behavior by Mr. Hughes. Crawford responded yes, and described several instances of sexually inappropriate behavior. For example, Ms. Crawford had asked Mr. Hughes “what’s up”, and he responded by grabbing his crotch and saying “you know what’s up”. On another occasion, Mr. Hughes grabbed Ms. Crawford’s head and pulled it toward his crotch. The human resources employee talked to two other employees who similarly reported sexually harassing behavior from Mr. Hughes.

Although all 3 of those employees reported, in response to questions by Metro’s human resources investigator, sexually offensive behavior by Mr. Hughes, none of them initiated any sexual harassment complaint themselves.

As a result of its investigation, Metro took no action against Mr. Hughes, the harasser. On the other hand, Metro fired Ms. Crawford and the other two employees who answered the HR employee’s questions–all 3 were fired shortly after the investigation into Mr. Hughes was concluded. Ms. Crawford had been employed at Metro for 30 years.

Case Dismissed: Ms. Crawford Didn’t “Oppose” Sexual Harassment

Ms. Crawford then filed a charge of discrimination with the Equal Employment Opportunity Commission, and then filed suit in federal court in Tennessee, claiming she had been fired in retaliation for her reporting of Mr. Hughes’ sexual harassment.

The Trial Court dismissed her lawsuit, and the US Court of Appeals for the Sixth Circuit affirmed the trial court’s decision. The Sixth Circuit agreed that the lawsuit should be dismissed because Ms. Crawford did not initiate her own sexual harassment complaint, but instead simply responded to questions initiated by Metro in Metro’s investigation into the rumors about Mr. Hughes.

Supreme Court Reinstates Ms. Crawford’s Case, Defining “Opposition”

The US Supreme Court concluded that Mr. Crawford satisfied the retaliation provision of Title VII and reinstated her case. This is why.

Title VII’s retaliation provision, 42 U.S.C. § 2000e-3(a), makes it “an unlawful employment practice for an employer to discriminate against” an employee because:

• the employee has “opposed any practice made an unlawful employment practice ” by Title VII (this is called the “opposition clause”), or
• the employee has “made a charge, testified, assisted, or participated” in any “investigation, proceeding, or hearing”under Title VII (this is called the “participation clause”).

In addressing the “opposition clause”: The Sixth Circuit concluded Ms. Crawford didn’t “oppose” any discriminatory practice because she didn’t file any complaint herself, and because “opposition” requires “active, consistent” opposition activities. Merely responding to the HR employee’s questions, according to the Sixth Circuit, was not “opposition”, so the employer was free to take adverse or retaliatory action against Ms. Crawford. The US Supreme Court rejected this reasoning, as I will discuss below.

The Sixth Circuit also addressed the “participation clause” and concluded Ms. Crawford had no protection against retaliation because she had not “participated” in any complaint proceeding under Title VII. The Supreme did not address this ruling.

The US Supreme Court rejected the Sixth Circuit’s reasoning on the “opposition clause” and reinstated Ms. Crawford’s case.  The US Supreme Court said the word “oppose” in Title VII should be given its “ordinary meaning”, in part based on a dictionary definition, to “resist or antagonize”, or to “contend against; to confront; resist; withstand”.

The US Supreme Court easily found that Ms. Crawford’s responses to the HR employees questions constituted “opposition” to Mr. Hughes’ sexually inappropriate behavior. There was “no reason to doubt” that a person can “oppose” by “responding to someone else’s question just as surely” as by “provoking the discussion”, and nothing in Title VII requires a “freakish rule” (“ouch!!” says the Sixth Circuit) protecting an employee who “reports discrimination on her own initiative but not one who reports the same discrimination in the same words when her boss asks a question”.

Because the US Supreme Court found Ms. Crawford’s case should be reinstated because she satisfied the “opposition clause,” the US Supreme Court did not address the question of whether her statements satisfied the “participation clause”.

Justices Alito and Thomas, in their opinion concurring in the result, agreed with the “primary” rationale in Justice Souter’s majority opinion, but were concerns that some of the language in the majority opinion (referencing part of a dictionary definition) could protect an employee who “silently” opposed discriminatory behavior. They thought there would have to be some public manifestation of the opposition, and they thought Ms. Crawford did so.

Prepared by Drew M. Capuder (contact information)

This blog by Drew Capuder will be the location on Capuder Fantasia PLLC’s web site for news on employment law. We will cover important court decisions, especially from the West Virginia Supreme Court and the United States Supreme Court. Our current employment news page will gradually be transitioned to this blog site.

The link to this blog is: www.capuderfantasia.com/blog

The Gap In the Federal Employee Section of the ADEA

This was the problem under the ADEA: The ADEA’s main section, in prohibiting discrimination against employees 40 and older, only deals with private industry employees and state government employees. I will call this section of the ADEA, the “private and state employee sections”.

To address age discrimination against federal government employees, the ADEA has a separate section, 29 U.S.C. § 633a, which contains a separate statement of the prohibitions against age discrimination. While the private and state employee sections of the ADEA contain expressly an anti-retaliation provision (29 U.S.C. § 623(d)), the federal employees section does not. The original ADEA was passed in 1967, but the federal employees were not covered until the statute was amended in 1974 to cover them.

So that gets us to US Postal Service employee Myrna Gomez-Perez in Puerto Rico, who asked for a transfer. The transfer was refused so she filed a complaint of age discrimination (she was 45). After she filed the age discrimination complaint, she claimed she was subjected to various forms of retaliation. So she eventually filed suit in the United Stated District Court for the District of Peurto Rico, claiming retaliation. Ms. Gomez-Perez’s lawsuit was dismissed for a different reason (sovereign immunity), and she then appealed to the United States Court of Appeals for the First Circuit (“First Circuit”). The First Circuit ruled in her favor on the sovereign immunity issue, but said her case was properly dismissed for a different reason–she was a federal employee and the ADEA’s federal employee section (29 U.S.C. § 633a) did not prohibit retaliation. Under the First Circuit’s logic, nothing ADEA prohibited retaliation against federal employees.

The US Supreme Court Fills the Gap

So Ms. Gomez-Perez appealed to the US Supreme Court, which ruled that the federal employee section of the ADEA prohibits “discrimination based on age” (29 U.S.C. § 633a(a)), and that implicitly prohibits retaliation that arises out of prior complaint of age discrimination. The controversey between the majority opinion and the dissenting judges was whether it was appropriate to read into the age discrimination prohibition a corresponding prohibition for retaliation related to an age discrimination complaint. The majority relied on prior decisions which had done precisely the same thing in the context of other anti-discrimination laws.

For example, in Jackson v. Birmingham Board of Education, 544 U. S. 167 (2005), Title IX of the Education Amendments of 1972 prohibited “discrimination” on “the basis of sex” in connection with any education program receiving federal aid. The controversy in that case was over retaliation after a complaint of sex discrimination, and that statute, like the federal employee sections of the ADEA, did not expressly prohibit retaliation again someone who complained about sex discrimination. The US Supreme Court there concluded that “retaliation” was covered by the sex discrimination prohibition. In essence, the US Supreme Court held that if you retaliate against someone who has complained about sex discrimination, then the retaliation is an act of sex discrimination.

So the US Supreme Court for Ms. Gomez-Perez applied the same logic for the ADEA: Since the ADEA prohibited age discrimination against federal employees, then it was an act of age discrimination to retaliate against someone who complained of age discrimination.

The real issue then, in a setting where a statute does not expressly prohibit age retaliation, is whether retaliation is a subset of age discrimination (and therefore covered by the prohibition against age discrimination); or whether the retaliation is conceptually and analytically different. The US Supreme Court, for Ms. Gomez-Perez, and in comparable discrimination settings, has found concluded that retaliation is a subset of the broader prohibition of discrimination.

Prepared by Drew M. Capuder (contact information)

The employer (Sprint) contended that evidence of other alleged age discrimination victims was not admissible where the decision-makers for those other victims were different from the decision-makers who took action against the plaintiff.

The Supreme Court rejected the employer’s argument and said that the evidence of other victims might be admissible, even if different decision-makers were involved. The trial court should conduct a “balancing test” for admissibility of discrimination against other employees by different supervisors, where the relevance of the other employees’ situation is balanced against unfair prejudice to the employer.

Prepared by Drew M. Capuder (contact information)

The plaintiff was a pilot, Rao Zahid Khan, who alleged that his co-workers subjected him to frequent derogatory and insulting comments about his national origina and religeon (he was Arabic). The West Virginia Supreme Court ruled that Colgan Air (a) was not liable for harassment because it had policies and procedures prohibiting harassment and took swift and decisive action after learning about the harassment, and (b) was not liable for retaliation because Colgan Air terminated the employee (Mr. Khan) for a legitimate and non-discriminatory reason–he failed to pass a mandatory FAA proficiency test for pilots.

Colgan Air was a 3-2 decision. Justices Davis, Maynard, and Benjamin joined in the “per curiam” majority opinion, and Justice Albright dissented and wrote an opinion, and Justice Starcher also dissented and wrote an opinion. Both Justices Albright and Starcher agreed with the majority that Mr. Khan properly lost his job because of his failure to pass the FAA proficiency test, but dissented because they believed that Colgan Air was properly held liable for the harassment (based on religion and national origin).

Summary prepared by Drew M. Capuder

Ledbetter’s Claims of Sex Discrimination and Lower Pay, and the Trial Result

Ledbetter filed a charge of sex discrimination with the EEOC in 1998 and then later in the year retired. She claimed that, years earlier in her career at Goodyear, male supervisors gave her bad performance reviews compared to what men received. She claimed that Goodyear awarded raises based on those performance reviews, so that her pay raises were reduced as a result of the discriminatory performance reviews.

Ledbetter went to trial and persuaded the jury that the performance reviews, years before she filed her EEOC charge, were discriminatory based on her sex, and the jury found her rights had been violated and awarded her damages based on her lower paychecks throughout her career. The trial judge entered a “judgment” in Ledbetter’s favor based on the jury’s verdict. So Ledbetter won at trial on her sex discrimination claim under Title VII. The Eleventh Circuit Court of Appeals threw out the jury verdict and trial court judgment for Ledbetter, and entered a judgment in favor of Goodyear, based on her failure to file her EEOC charge within 180 days of when the performance reviews had been conducted. The United States Supreme Court affirmed, meaning that Goodyear won.

The Problem for Ledbetter Under Title VII Limitations Provisions

Here is the problem for Ledbetter: Title VII of the Civil Rights act, which governs sex discrimination in the workplace under federal law, says that an employee must file a charge of discrimination within 180 days (or, depending on the state, 300 days) after the discrimination occurred about which the employee is complaining. The Courts, in examining when the discrimination occurred (for purposes of figuring out when that 180 day “clock” starts to run), have focused on the “discrete” employment “decision” that caused some consequence (usually pay check-related) for the employee. Based on when Ledbetter filed her EEOC charge in 1998, for it to be timely, she had to be complaining about “decisions” which occurred within the 180-day window preceding the charge. But the discriminatory evaluations had occurred years before that, even though the reduced paychecks about which she complained continued into that 180-day window.

US Supreme Court: Ledbetter Loses Because She Didn’t File Her Complaint Quick Enough

The Supreme Court held that, in a situation where a decision (such as a performance review) was made that discriminated against a female employee by paying her less, the employee was required to file a charge of discrimination with the EEOC within 180 days of when the decision was made and communicated to her. That, for Ledbetter, would have been within 180 days after the bad performance reviews were conducted and the results were communicated to her. Since she did not file EEOC her charge until years later, the charge was not timely under Title VII. The consequence is that she loses all rights under the EEOC charge process, and she loses all rights to file suit on the same claims in Court under federal law.

The Supreme Court’s decision was a 5-4 vote that illustrates the ideological divide on the Court. The 5 vote majority consisted of the “conservative”; block on the Court (Alito, Roberts, Scalia, Kennedy, and Thomas), and the 4 vote dissent consisted of the “liberal” block on the Court (Ginsburg, Stevens, Souter, and Breyer).

The Backlash, and Congress Overrules the Supreme Court

The decision got a great deal of press attention, being both praised (Kiplinger Business Resource Center) and condemned (New York Times Editorial). The criticism of the decision generated political movement for Congress to revise the law to undo the decision (NYT editorial and story discussing those efforts). On April 24, 2008, the bill that would have overturned the decision failed to receive the 60 votes required in the Senate to begin consideration of the bill (NYT Article), so the bill died for the time being.

But then after the November 2008 election, where the Democrats gained seats in the Senate, Congress passed, and President Obama signed into law (on January 29, 2009), the Lilly Ledbetter Fair Pay Act (Pub. L. 111-2, sec.1, 123 Stat.5), which overturns the US Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). You can review the history of the law on the Library of Congress THOMAS site.

For Supreme Court Groupies

The Supreme Court’s decision in Ledbetter is a good opportunity to study the significance of and controversy generated by the US Supreme Court’s decisions. Read the press accounts when the decision was issued from the New York Times and the Washington Post. You can also listen, on the Oyez site, to the oral argument in the case before the Supreme Court, and the announcement at the Supreme Court of the decision and dissent. Or read the transcript of the oral argument. You can also read the briefs in the case at FindLaw.com. Read a summary of the decision in the Harvard Law Review.

Summary prepared by Drew M. Capuder

The Supreme Court broadened retaliation claims in 2 ways:

First: Retaliatory conduct is not limited to employer’s action at the workplace, and it is not limited to action taken while the plaintiff is still working for the employer.

Second: Action by the employer may violate the anti-retaliation provision even if it does not cause a tangible loss, such as pay, for the plaintiff. The conduct may violate the law if it is “materially adverse” (as opposed to “trivial”) to the employee, and might dissuade a “reasonable worker” from “making or supporting a charge of discrimination”. So, for example, transfers to different positions, even though they involve no loss in pay or benefits or promotional opportunities, might constitute unlawful action because, if the transfer is to what a reasonable worker would view as a less attractive job, that might dissuade a reasonable worker from complaining of discrimination.

Summary prepared by Drew M. Capuder