Delaware Employment Law Blog

The EEOC announced last week that large grocery store chain Albertsons has agreed to pay $8.9 million to settle three lawsuits in which the EEOC alleged that it had engaged in race, color and national origin discrimination, and retaliation, at a distribution center in Aurora, Colorado.

According to the EEOC lawsuits and a news report, 168 minority employees were subjected to racist and anti-Semitic derogatory epithets, slurs and graffiti. Allegedly, supervisors were aware of and even participated in the harassing conduct. One African-American employee whose leg was broken by a piece of equipment at work was allegedly left lying on the warehouse floor for thirty minutes by a white supervisor who told him that was what he got for being black. Albertsons denied that it had engaged in discrimination or harassment.

The $8.9 million settlement will be divided among the 168 employees who complained about harassment between 1995 and 2008 (an average of about $53,000 per person).

The lesson for employers is clear, according to the EEOC’s press release. “EEOC Acting Chairman Stuart J. Ishimaru said, ‘Employers simply cannot overlook or tolerate this kind of outrageous discrimination and retaliation. The EEOC certainly won’t. We will aggressively pursue employers who violate the laws we enforce. And we’ll insist on substantial and meaningful relief for the victims before settling these cases.’” Albertsons also agreed to four years of court-supervised monitoring and a training program for its managers.

Employers who suspect or know about harassing behaviors in the workplace must act promptly to stop them to avoid liability, and should train all employees regarding compliance with equal employment opportunity laws.

The Delaware Department of Labor (DDOL), is the agency responsible for processing charges of discrimination filed under Delaware’s various discrimination statutes. Because the DDOL has a work-sharing agreement with the U.S. Equal Employment Opportunity Commission (EEOC), the Department has authority to process charges filed under state and federal discrimination laws.

Until now, the charge process, including applicable deadlines and controlling procedures, has not been regulated by state law. How a charge is handled by the DDOL, and the rules governing charging parties and responding employers have been available only in the form of proposed regulations for the past several years. But, last month, the DDOL published its first set of final regulations applicable to the charge process.

In this post, the new regulations are summarized and explained. A second, follow-up post will offer some commentary about these important changes.

The Charge of Discrimination

The regulations set forth what must be included in a charge of discrimination. A charge must identify:

• the basis for the DDOL to assert jurisdiction over the charge;
• the type(s) of discrimination alleged;
• the type(s) of adverse action alleged;
• the facts that support the claim;
• the laws that have allegedly been violated; and
• the reasons that the charging party believes support a finding of discrimination.

For the charge to be valid, the charging party must swear under oath that the allegations are true and correct and must sign the charge before a notary public.

Initial Processing of a Charge

Once a verified charge is filed, the DDOL must send a copy to the employer, by certified mail, within 14 days. The DDOL may also include a request for information with the charge, and, in its discretion, may invite the employer to participate in mediation. Even if the DDOL has not invited the employer to participate in mediation, the regulations permit the employer to request mediation in lieu of filing an answer.

The employer has 20 days to submit an answer, though the Administrator has the discretion to grant an extension of time to respond. The answer must respond “fully and completely” to the allegations asserted in the charge.

Preliminary Findings

The next step is the issuance of a preliminary finding. The Administrator must issue her preliminary finding within 60 days from the date the charge was served to the employer. The DDOL Administrator has three options. She can refer the case to mediation, refer the case for investigation, or recommend dismissal of the case.

The Administrator may dismiss a case in the following circumstances:

• the DDOL does not have jurisdiction over the case (because, for example, the employer has too few employees to be covered by the law or the employment was not located in Delaware);
• the charging party is not cooperating;
• the employer has filed for bankruptcy or relief is otherwise precluded;
• the charge was filed after the statutory deadline, or
• the charge does not allege facts that would, even if true, constitute a violation of the law.

Administrative dismissal is rare. And, even if dismissal is recommended, the charging party will be given the opportunity to provide additional evidence demonstrating that an investigation is warranted.

Mediation

The regulations also address the DDOL mediation process. The Administrator is authorized to refer a case to mediation at any time, after 20 days from service of the charge. The regulations make clear that mediation communications and records are confidential and may not be used against either party. The regulations preclude the mediation director and staff from participating in the investigation of any case that is unsuccessfully mediated. And, if the case is settled, the settlement agreement will be kept confidential unless there is an allegation that one of the parties has breached the agreement.

Investigation

If the parties do not mediate the charge or if the mediation fails, the charge will be referred for investigation. The employer has 20 days from the date it receives notice that the case has been referred for investigation to file its answer, if it has not done so already. If the employer did file an answer, the employer will have 20 days from the date of notice of investigative referral provide a supplemental response or to respond to any pending request for information.

The regulations include a lengthy description of the DDOL’s tools for investigating claims. The DDOL’s powers include obtaining information from the employer through written requests for information and documents, on-site visits and interviews. The DDOL can obtain information from third parties with subpoenas and depositions. The DDOL also has the authority to obtain information at a fact-finding conference.

A DDOL representative advises the parties in advance of the conference to bring specified witnesses and documents. During the fact-finding conference, the DDOL representative will question the witnesses and parties. The regulations state that “the parties shall not be entitled to cross-examine witnesses,” but the representative has the discretion to allow attendees to question the witnesses.

Determination and Findings

When the DDOL concludes its investigation, the Administrator will issue a determination. The determination can state that the Administrator either did or did not find reasonable cause to believe that the employer violated the law by discriminating against the charging party. A “no-cause” finding results in a dismissal of the charge. A finding of “cause,” on the other hand, means that the Administrator has determined that there is reasonable cause to believe that the employer unlawfully discriminated against the charging party.

In the event of a “cause finding,” the employer has 10 days to file a written request for reconsideration of the finding. The Administrator will determine whether the employer will be granted permission to submit additional information in support of its request. The Administrator’s decision will be issued within 10 days of the date the request for reconsideration is made.

Conciliation

If the reasonable-cause finding is not reversed by the Administrator, it is considered final. A final cause finding triggers the conciliation process. Similar to the mediation process, conciliation provides an additional pre-litigation opportunity for the parties to resolve the dispute.

If conciliation fails and the parties do not reach agreement, the DDOL will issue a Right-to-Sue Notice to the employee, which authorizes the employee to file a complaint in state court. At that point, the DDOL’s involvement in the case concludes. The DDOL will retain its file for two years. If litigation ensues, the parties will have the right to obtain copies of the witness statements and factual written data, reports and documents in the DDOL’s file by making a written request and serving a copy of the request on the other party or the other party’s attorney.

From the U.S. Department of Justice (DOJ), comes a new published Guidance relating to the use of E-Verify.  The recent, though short-lived excitement over the use of E-Verify for employment verification has now quieted down. Private-sector employees are back to the voluntary use of the system as a method for confirming that newly hired employees are authorized to work in the country.  

One of the concerns that was raised with the E-Verify program was its potential effect on discrimination in the workplace.  If, as a result of using E-Verify, an employer receives a no-match letter or a “tentative” no-match letter, he cannot terminate the employee without first trying to resolve the mismatch.  Failure to work with the employee to determine the cause of the mismatch could result in a claim for national-origin discrimination.

Anticipating the likelihood that employers would not want to engage in the additional steps of “working with the employee,” the DOJ issued guidelines outlining the step that an employer must take upon receiving information about a potential mismatch.  (See Antidiscrimination Guidance Concerning the DHS No-Match Rule).

See also:  E-Verify Employer Dos & Don'ts

Pregnancy Discrimination is back in the news, courtesy of the U.S. Supreme Court's grant of certiorari in the case of AT&T v. Hulteen, No. 07-543.  Employees who took maternity leave, pursuant to the company's decades-old policy, were not given the same credit towards their pension as employees who took other kinds of disability leave.

The Pregnancy Discrimination Act (PDA) was not enacted until 1979 and, since then, AT&T’s maternity leave has been credited toward retirement, in compliance with the law. At issue is whether AT&T must now give female retirees credit for maternity leave taken from 1968-1976, preceding enactment of the PDA.

The Ninth Circuit held that the benefits system violated the PDA.  AT&T appealed and the Solicitor General recommended that cert be granted.  The SCOTUS Blog covers AT&T v. Hulteen and provides more details as well as links to the previous filings.

A ruling against AT&T would seem to be contrary to the Court’s recent ruling in Ledbetter v. Goodyear, related to the timeliness of discrimination claims whose effects may not be apparent for many years later. Further, it is generally held that statutes are not retroactive absent statutory language otherwise. In light of these precedents, a ruling in favor of the employees in this case may signal a real interest in this type of discrimination. Stay tuned!

Good documentation practices during the hiring process can help employers avoid a failure-to-hire claim.  And that's a good thing, considering that failure-to-hire claims are costly. Just ask Perdue.  The poultry company has agreed to a pay out of more than $800k to settle a claim of disparate impact arising from what the DOL concluded to be systematic discrimination against non-Hispanic job applicants. 

Disparate Impact Claim

A Labor Department news release states an evaluation in 2005 and 2006 by the Office of Federal Contract Compliance Programs (OFCCP) found the Salisbury-based company failed to comply with federal employment laws at its poultry processing plants in Rockingham, N.C., Dillon, S.C., and Monterey, Tenn. (The OFCCP has jurisdiction because Perdue supplies poultry under a federal contract to the U.S. Department of Agriculture.)

The settlement agreement will require Perdue to pay $800,000 in back wages and interest to 750 women and minorities who were not hired during the relevant time period.  The company also will make employment offers to some of those who were not hired but who are still interested in employment with Perdue.  In those cases, the employees will receive retroactive company service dates for purposes of benefits and promotion rights. 

Documentation Regrets

Perdue officials denied the allegations on the basis that many applicants were unqualified for employment or withdrew from consideration for employment.  They stated that the company agreed to a settlement only to avoid protracted litigation, according to the company. The VP of HR said in a company statement:

Perdue is committed to treating all job applicants fairly. We regret we did not more carefully document our hiring process for production associates, which led to these concerns by the OFCCP and, ultimately, to this settlement.

Perdue has implemented new procedures to ensure it retains all relevant documentation of its selection processes and is also conducting training of its human resources staff to assure appropriate implementation of Perdue's hiring and employment practices, according to the company statement.

Interviewing Best Practices

Interviewing is one of the most neglected areas in employment law.  When I teach seminars on lawful interviewing, I will inevitably see faces filled with shock and despair as they realize just how many of the best practices have not been implemented in their organization. 

Documentation is key in hiring.  If you keep notes and records only on the people you hired, you will have nothing to refer to in a failure-to-hire claim.  And let's be honest, the ones you didn't hire are likely the ones who were the least memorable.  Can you remember candidates you interviewed and rejected in 2005 and 2006? 

Without an established and consistent documentation and record-retention policy for the hiring policy, a failure-to-hire claim can be nearly impossible to defend.  Just ask Perdue.

Source:  Delaware News Journal, Gwenn Garland

The City of Philadelphia seems to have had more than its fair share of civil rights lawsuits in the last several weeks. The EEOC has had a number of significant successes against employers in Philadelphia and the surrounding areas.

The month of May started on a difficult note for the city. First, there was the backlash when 15 city officers were videotaped beating a suspect just days after a fellow officer was killed in the line of duty.  4 of the officers were later fired for their involvement.

Moore v. City of Philadelphia

Then came the $10m jury verdict in favor of three former Philadelphia police officers.  The officers alleged that they were subject to unlawful retaliation when they opposed racial discrimination and harassment of African-American police officers in their squad.   

Lawrence vs. City of Philadelphia

Then, on May 29, 2008, The Third Circuit reversed and remanded a class action case brought by more than 250 "fire-service paramedics."  The plaintiffs allege that the city's fire department unlawfully withheld overtime pay by misclassifying them as exempt employees under the "fire-service exemption."  A case of indebtedness at the trial court level of the Appellate Court reversed finding that the exemption did not apply.  This narrow reading of FLSA exemption could have broad implications for the City of Brotherly Love.

EEOC vs. NutriSystem Inc.

Not to be outdone by its urban neighbor, Horsham, Pa. has had its own bit of discrimination news.  On May 21, 2008, the EEOC announced that NutriSystem, Inc., had agreed to settle a lawsuit filed by the Commission on behalf of the woman it allegedly fired because she was pregnant.  The pregnancy discrimination settlement cost NutriSystem $82,500.  The employee with initially hired as the temporary recruiter in the company's human resources department and would need a fulltime employee a year later.  One month after she was placed in a leadership training program and three weeks after she announced that she was pregnant, the employee was fired.

NutriSystem, again

The Horsham company saw more problems last week when a former employee and Philadelphia resident filed suit in Federal Court in a class action suit estimated to include that least 400 current and former employees.  The lawsuit alleges that the company violated The Fair Labor Standards Act by underpaying their call center employees.  The company responded that the employees had been properly classified as exempt.

Of course, the first case in this string of settlements was in early May, when Conectiv agree to pay $1.65m to Black workers after the EEOC filed suit against the energy company and its subcontractors for race discrimination.  (See my earlier post, Delaware-based Conectiv Settles Race Discrimination Suit with Philadelphia EEOC for $1.65m.)

The wise sages at the Workplace Professors Blog, (link to the site here), have posted an excerpt from an article-in progess by Franita Tolson (law clerk to Seventh Circuit Judge Ann Claire Williams).

The theoy of the paper rests on how the courts' involvement is needed to remedy unconscious discrimination. The article, The Boundaries of Litigating Unconscious Discrimination: Firm-Based Remedies in Response to a Hostile Judiciary, is availale on SSSN as an abstract. Here's an excerpt from the abstract:

Unconscious discrimination is actionable under Title VII ..., but scholars [agree] that court regulation of it has failed. Contrary to the alternatives suggested in the literature, placing the burden on the firm to regulate discrimination ex ante is more likely to minimize unconscious, discriminatory behavior, at least more so than tinkering with the ex post remedies available for those few violations that can be proven through Title VII. [T]his article proposes alternative mechanisms for addressing unconscious discrimination that account for its peculiar nature, mainly firm-based remedies that will be more successful than the courts have been in addressing this problem. The difficulty comes in incentivizing the Delaware courts [can incentive] ... firms to address unconscious discrimination ... [via] the duties of care and loyalty, corporate norms, and economic pressure from corporate giants like Wal-Mart.

Hat tip to the Workplace Profs Blog