Delaware Employment Law Blog

In Lozano v. City of Hazelton, the Third Circuit Court of Appeals ruled that the Hazelton, Pennsylvania ordinances regarding illegal aliens were unconstitutional.  The ordinances, which had been enjoined by a federal court before taking effect, were designed to keep illegal aliens out of the town by penalizing employers who employed them and landlords who rented to them.  The court found that the ordinance conflicted with federal immigration laws and therefore violated the Supremacy Clause. The ordinances operated in part through the sanction of suspending the business license of any person or entity who hired a worker not authorized to work in the U.S.

The court explained that the Immigration Reform and Control Act of 1986 (“IRCA”), the federal law that first prohibited the employment of undocumented workers, was carefully designed to minimize the burdens imposed on both employers (who did not want to be involved in the enforcement of federal immigration laws) and on authorized workers, who might erroneously be perceived as illegal aliens and discriminated against. Accordingly, IRCA limited the types of complaints against employers that the government would investigate, the measures that employers would have to take to assure that workers are authorized to work in the U.S., and the workers to which it would apply (IRCA applies to employees only, not to independent contractors). Congress also included an anti-discrimination provision in IRCA to reduce the burden imposed on authorized workers.

Continue reading "3d Cir. Finds Anti-Illegal-Alien Ordinance Unconstitutional" »

Claims of sexual harassment made by males has been on the rise. Allegations of male-to-male harassment, especially, are becoming increasingly common. Female-to-male harassment claims, though, are less common. And that's why a recent decision from the Ninth Circuit is particularly noteworthy for employers.

In EEOC v. Prospect Airport Services, Inc., the male plaintiff and the female alleged harasser both worked as passenger assistants (helping passengers who need wheelchairs) at McCarran International Airport. The plaintiff, Rudolpho Lamas, was a recent widower.  His alleged harasser, Sylvia Munoz, was married.

After Munoz propositioned Lamas repeatedly, Lamas reported her conduct to the company’s assistant manager.  The manager responded that Lamas (the victim), should tell Munoz to stop and let management know if she didn’t stop. Lamas had already told Munoz that he was not interested, but, following his supervisor’s advice, he told her again. This did not work; Munoz gave Lamas a second note expressing interest in a relationship with him and then tried to give him a picture of herself. Lamas next asked his immediate supervisor for help, but she did nothing.

Munoz gave Lamas a third note that was even more aggressive and explicit. By this time, Munoz had told other co-workers of her interest in Lamas, and they began lobbying him on her behalf. He told them he was not interested, and began feeling embarrassed. Lamas went to the next supervisor up the chain, gave him the note, and asked him to make Munoz stop. The supervisor said he did not want to get involved in personal matters but he agreed to speak to Munoz as a “favor” to Lamas, acknowledging that the latest “love letter” was a violation of the company’s sexual harassment policy. The supervisor spoke to Munoz and warned her to stop, but she didn’t stop.

Munoz began making suggestive remarks and gestures whenever she was around Lamas, on a daily basis. Lamas began to feel oppressed and offended by the constant pressure from Munoz. She had co-workers tell him that she was going to “get him” no matter what. Co-workers began to speculate that Lamas was gay because of his negative response to Munoz. Lamas consulted a psychologist about his emotional distress; he felt helpless and cried.

Lamas complained to four different managers. The company’s general manager said the situation was a joke and that Lamas should walk around singing to himself, “I’m too sexy for my shirt.”

Continue reading "Stereotyping and “Reverse” Sexual Harassment" »

Federal contractors and subcontractors are subject to a new posting requirement.  Federal contractors and subcontractors (except for acquisition contracts worth less than $100,000 and subcontracts worth less than $10,000) have until June 21, 2010, to post a new notice telling their employees about their rights under the National Labor Relations Act (NLRA), the federal law that governs the relationships between private sector employers and unions. The posting describes the rights of employees to organize into unions and collectively bargain for a contract with their employer. It also describes union and employer conduct that is deemed to be unfair interference with employee rights, and tells employees to contact the National Labor Relations Board if they believe their rights have been violated.

Contractors will be able to download the notice from the Department of Labor’s website and print it out for posting. If the contractor also posts notices to employees electronically, it must also post this notice electronically through a link to the Department of Labor’s Office of Labor-Management Standards (OLMS) website. If a significant number of a contractor’s employees do not speak English well, the contractor must post translated versions of the notice, which will be provided by the OLMS.

The text of the notice and certain other provisions must now also be inserted into federal contracts and subcontracts. The text is available at 29 C.F.R. Part 471 Appendix A (scroll down to page 52).

The Department of Labor’s OLMS has published a Fact Sheet that explains the new posting requirements in detail. Contractors and subcontractors who fail to comply with the requirements risk suspension or cancellation of current contracts and debarment from future contracts

As noted by Michael Fox in a recent post on his Employer's Lawyer blog,, an OFCCP Administrative Law Judge (ALJ) just released a 66-page decision in a case that began with an audit notice in 1993. The case was bogged down in large part due to the bank’s contention that it was not selected for audit in accordance with its constitutional right under the Fourth Amendment to be free from unreasonable searches and seizures. That claim was ultimately unsuccessful. As a result of the delay, though, the bank found itself litigating claims about hiring practices dating back to 1993. Not surprisingly, the recollections of key witnesses such as the recruiters were foggy on some points.

But, in essence, the trial boiled down to a battle of the experts, who each advocated his or her own method of statistically analyzing the hiring data. The analysis of the OFCCP’s labor economist/statistician disregarded several of the bank’s legitimate business reasons for rejecting applicants because of evidence provided by the recruiters regarding how they coded applicants.

For each applicant, the recruiters were to use a code to indicate the outcome of the application. For example, they used a certain code to indicate that the applicant was not interested in working the hours that were available, and another code to indicate that the applicant had failed the credit check. Unfortunately, the recruiters testified that they did not use the code consistently.

If someone told the recruiter that her or she was not interested in the hours and/or the wages being offered, the recruiters sometimes used the code for “no position available” rather than the code used to indicate that the hours or wages were not acceptable to the applicant. To the OFCCP’s expert, this justified treating the hours code as entirely unreliable.

He also disregarded the code the recruiters used to indicate that the applicant was rejected based on his or her credit report for several reasons: (1) the recruiters did not have a consistent system for screening based on a credit report, (2) there was no evidence validating the use of credit reports as a test for success in the job, (3) the bank stopped using credit reports in 1994, and (4) the use of credit reports as a screening device adversely impacted African-Americans. The bank had not retained copies of the credit reports, so it was not possible to determine whether the recruiters used the credit reports in a consistent way as between white and African-American applicants.

When the employer’s expert analyzed the hiring decisions and excluded the people who had been rejected based on hours preferences or the credit check, the outcome was that there was no statistically significant evidence of discrimination. When the OFCCP’s expert analyzed the same hiring decisions but included the applicants who had been rejected based on the hours and credit check results, there was strong statistical evidence of discrimination.

The ALJ also rejected the bank’s expert’s opinion that the bank had hired more African-Americans for the jobs in question than would be predicted if the analysis had been based on the overall availability statistics for the Charlotte metropolitan statistical area for 1993. The ALJ wrote that “it is well established that the applicant flow data, which documents the actual labor pool relevant to the hiring decisions at issue, is ‘highly relevant evidence of an employer’s labor market.’”

This proposition is one that, in my experience, is theoretically appealing but completely out of sync with reality. The reality is that applicants’ self-identification of race and gender by applicants is voluntary, and a large number of them do not self-identify. Consequently, the employer, the courts and labor economists running statistical analyses will never have an accurate picture of the racial characteristics of the “applicant pool” from which the hires were made. Given that the information about the race and gender of the “applicant pool” is always incomplete and inaccurate, it is difficult to understand how applicant flow data can be more relevant and reliable than census data.

Anyway, this case still is not over. The ALJ has to decide what the damages number will be, and after that, if the case does not settle, appeals seem likely.

The EEOC published a press release a few days ago about the distribution of a $6.2 million settlement it had reached with Sears, Roebuck & Co. The lawsuit had been filed in November 2004 in federal court in Chicago. The consent decree was entered and publicized on September 29, 2009 as the largest ADA settlement in a single case in EEOC history. The EEOC Regional Attorney handling the case stated:

The era of employers being able to inflexibly and universally apply a leave limits policy without seriously considering the reasonable accommodation requirements of the ADA are over. Just as it is a truism that never having to come to work is manifestly not a reasonable accommodation, it is also true that inflexible leave policies which ignore reasonable accommodations making it possible to get employees back on the job cannot survive under federal law. Today's consent decree is a bright line marker of that reality.

The EEOC had complained that “Sears maintained an inflexible workers’ compensation leave exhaustion policy and terminated employees instead of providing them with reasonable accommodations for their disabilities, in violation of the ADA.” The settlement resulted in payments averaging $26,300 to 235 former Sears employees.

This is not the only such case pursued by the EEOC. The EEOC filed a class action lawsuit suit against UPS in Chicago on August 27, 2009. According to the EEOC press release, the case was initially prompted by an investigation into a complaint that UPS had fired an employee with multiple sclerosis after she exhausted the twelve months off to which she was entitled under the UPS leave of absence policy. She had asked for 2 more weeks of leave so that her medications could be adjusted, but UPS allegedly refused to provide it.

In November 2009, the EEOC reached a settlement with JPMorgan Chase & Co. in a class action based on similar allegations. The EEOC alleged that Bank One, which later merged with Chase, had terminated some employees after they exhausted six-month medical leaves without first investigating on a case-by-case basis whether it was possible to accommodate their limitations so that they could return to work. As a result of the settlement, $2.2 million was to be distributed among 222 individuals who had taken long-term-disability leave and were then terminated.

Big companies that have leave policies, no matter how generous, that call for automatic termination of employees who exhaust the specified period of available time off, are prime targets for EEOC class action suits. Many courts have upheld claims by employees that their former employers violated their rights under the Americans with Disabilities Act by refusing to even consider extending their leaves of absence or providing other forms of reasonable accommodation. Employers should examine their long-term and short-term disability and medical leave policies to ensure that they comply with the ADA’s mandate that employers attempt, on an individualized basis, to accommodate employees’ disabilities before terminating their employment.

The U.S. Department of Labor (DOL), has been conducting an interesting online initiative designed to identify the best online job search and career advancement tools. They currently have 610 tools (!) posted on their site and are seeking input from people who have used the tools.

The tools fall into categories such as general job boards, niche job boards, career tools, career exploration guides, and web 2.0 / social-media sites that specialize in job searches or postings. Visitors to the site are encouraged to try the tools, comment on them, and recommend the ones they like. In a YouTube video on the website, Secretary of Labor Hilda Solis explains the initiative. The DOL promises to publish the tools that rank the highest on its website and also to encourage the creation of a nationwide network of “One-Stop Career Centers.” Voting ends on January 15.

Anything that the DOL can do to help job seekers is a good thing.

The U.S. Equal Employment Opportunity Commission (EEOC) reported that it a record number of discrimination charges in FY 2009, the second-highest number in its history. Race and sex discrimination continued to be the most frequently filed, but religion, disability and retaliation claims all reached new highs. EEOC investigates and enforces claims of discrimination under Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA).

Notable statistics relating to resolved claims (those resolved via settlement, withdrawal, and conciliation), include:

• EEOC resolved 85,980 charges.
• Resolved charges resulted in $294.2 million in relief for claimants. 
• Total relief represented a $20 million increase over FY 2008.

 

Notable statistics relating to "merit" lawsuits (suits filed by EEOC against employers who refuse to comply with information requests or who allegedly breach settlement agreements), include:

• EEOC filed or intervened in only 281 “merit” lawsuits
• This is the lowest number of new merit cases for a fiscal year since 1997, according to the EEOC’s online statistics, and is down from a high of 438 merit cases in 1999.
• EEOC resolved 321 “merit” cases, for a total of $82.1 million, a decrease of about $20 million from FY 2008.

The Delaware Department of Labor (“DDOL”) handles most discrimination charges filed against Delaware employers. The DDOL and EEOC have a work-sharing arrangement. The DDOL has a mediation program for newly filed charges in which employers can participate before filing a substantive response to the charge. Mediation can result in a low-cost settlement with a minimum of disruption and negative publicity. Neither the DDOL nor EEOC publicizes settlements reached during the administrative process--another reason to consider settlement at this stage of the dispute. Employers who are curious about the types of cases that the EEOC likes to file can review its press release page, where it publishes, on a daily basis, news releases about cases it has filed and settled.

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.

Many companies require high-level managers, salespeople, researchers and other key employees to sign confidentiality, non-solicitation and/or non-compete agreements, also known as “restrictive covenants.” These agreements are intended to prevent key employees from capitalizing on proprietary knowledge they learned or developed and relationships with customers and employees that they formed in the course of their employment for their own benefit or the benefit of competitors and against the interest of their former employers.

Continue reading "Why Restrictive Covenants Should Include Delaware Choice-of-Law and Forum-Selection Clauses" »

Two high-profile sexual-harassment cases are in the news.  One is just beginning, the other has come to a close.

Liza Minnelli settled a lawsuit brought five years ago by her former chauffeur M'Hammed Soumayah that had sought $100 million in damages. The amount of the settlement was not disclosed, but the settlement meant that Ms. Minnelli would not be required to give a deposition in the case. The chauffeur claimed that his boss got drunk, beat him, and forced him to have sex with her. These allegations, if true, would state a claim for sexual harassment under Title VII of the Civil Rights Act of 1964. This case shows that women are sometimes also accused of being sexual harassers.

In another interesting development, the U.S. Equal Employment Opportunity Commission has just filed a class action against a Brooklyn fish seller, M. Slavin & Sons, accusing it of harassing a group of African-American male employees based on their sex, race and/or national origin (African). This case is getting attention not because of the employer’s fame, but because of the sordid nature of the accusations.

According to the Complaint, the owners and managers engaged in a variety of uncouth acts, including grabbing, pinching and sticking fish hooks (!) into the buttocks of male employees, making crude sexually explicit comments to their employees, using racial slurs (including the “N” word), saying derogatory things about Africa, and retaliating against an employee who complained. This is a textbook example of what not to do, even in a rough-and-tumble workplace like a fish market, and is another case of sexual harassment that differs from the more common male on female pattern.