New York Labor and Employment Law Report : New York Employment Lawyer & Attorney : Bond Schoeneck & King Law Firm : NY Labor Relations, Employee Benefits

An interesting case from the United States District Court for the Western District of Kentucky addresses a particularly difficult religious accommodation question: at what point can an employer prohibit an employee from expressing religious views in the workplace? According to the Court’s opinion, the case involved a nurse employed by the University of Louisville’s medical center. Based on her reading of portions of the Bible, the employee believed she had calculated the date for either the end of the world or the coming of the Antichrist, 12/21/2033. She also believed that she was compelled by her religion to share her views and her calculations with her co-workers. The co-workers complained to their manager that the employee would not stop talking to them about the subject, even when they asked her not to, and that she was scaring them. The manager had a conversation with the employee and told her to stop or face discipline. Although the employee was not disciplined, she submitted her resignation as a result of the conversation.

In granting the Hospital's motion for summary judgment, the Court first noted that the employee could not establish a prima facie case of failure to accommodate her religious beliefs because she had failed to show the employer took any adverse action against her. The Court went on, however, to conclude that even if the employee had been disciplined, she could not state a failure to accommodate claim, because the employer was not required to accommodate the employee’s religious beliefs under these circumstances. Although the case was brought under Kentucky state law, the Court relied on federal court precedent in Title VII cases to find that an employer does not have an obligation to accommodate an employee’s desire to impose her religious views on co-workers by harassing them. Were an employer required to provide such an accommodation, it would create an undue hardship because it necessarily infringes on the rights of co-workers.

This does not mean, of course, that an employer can prohibit all forms of religious expression in the workplace. But where the employee’s expression consists of attempting to proselytize co-workers who object to the conduct, and amounts to harassment, the employer can ask the employee to stop, and if she does not stop, impose discipline.
 

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In a 4-3 decision, the New York Court of Appeals ruled on July 1, 2010, that a non-resident cannot sue his employer under the New York State  and City Human Rights Laws, unless he can demonstrate that the alleged discriminatory conduct had an impact within the State or City of New York. The case, Hoffman v. Parade Publications, Inc. resolves a split of authority over the applicability of the State and City Human Rights Laws to non-residents. Prior to Hoffman, some courts had ruled that a non-resident plaintiff could assert a Human Rights Law claim when the termination decision was made in New York, even if the plaintiff otherwise had no connection to New York. The Hoffman case has been closely watched by New York employers who have employees working in other parts of the country. Plaintiffs’ attorneys often seek to take advantage of the State or City Human Rights Laws where possible, because those laws are often broader and more protective of employees than are federal law and the laws of many other states.

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Another federal court has recently decided that the New York State Human Rights Law (“NYSHRL”) and New York City Human Rights Law (“NYCHRL”) can protect employees who do not live or work in New York. In Rohn Padmore, Inc. v. LC Play Inc., the plaintiff, Ron Padmore, alleged discriminatory discharge based on sexual orientation. During the initial month of his employment, Padmore worked at defendant’s offices in New York City. Thereafter, he worked mainly from his home in Los Angeles, but returned to the employer’s New York City offices on three occasions. His employment was terminated by an e-mail generated from the employer’s New York City offices, which contained apparent evidence that the termination was based on sexual orientation.

The employer sought summary judgment dismissing the complaint on the ground, among others, that as a non-resident of New York, the protections of the NYSHRL and NYCHRL did not apply to Padmore. After a thorough review of the conflicting decisions that had previously considered the issue, the Court sided with the courts which have held that the two laws apply when a discriminatory act is committed in New York, even if the impact of the act is felt outside of New York. Because the employer’s offices were in New York City, the allegedly discriminatory termination decision was made in New York City and the e-mail evidencing discriminatory animus was sent from New York City, the Court found Padmore was protected by both the state and city laws.

The Padmore court’s interpretation of the geographic reach of the NYSHRL and NYCHRL is becoming the majority view, and is the view of New York’s Appellate Division, First Department. If Padmore is followed by other courts, potential plaintiffs across the country, even those who never set foot in New York, may be able to avail themselves of the generous protections of the NYSHRL and NYCHRL, so long as an arguably discriminatory decision was made in New York.
 

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The Equal Employment Opportunity Commission (“EEOC”) recently released statistics on its charge processing and litigation which include data from 1997 through 2009. As others, including the New York Times , have reported, the data shows overall charge filing down about two percent from 2008.  However, the continued high number of charges is the real story, because 2008 was a record year for charges. Thus, although there was a slight decrease in age discrimination charges in 2009, even those stayed close to the record levels of 2008. In fact, age charges for 2009 are up more than 42 percent over the last ten years. Harassment charges of all types also decreased significantly (5.8%), but again from the record 2008 levels. The subgroup of sexual harassment charges decreased at a greater rate, 8.4%. Interestingly, the percentage of sexual harassment charges filed by males stayed about the same, 16%.

Some types of charges did increase. Charges filed based on disability (up 10% from 2008), religion (up 3.5%) and national origin (up 5%) are at record levels. Charges alleging race discrimination and sex discrimination stayed very close to their record levels of 2008, and make up about 36% and 30% respectively of all charges filed. Overall, Commission charges have increased almost 16.8 percent from fiscal year 2000.

Paradoxically, the increase in number of charges over the last decade has not caused a corresponding increase in suits filed by the Commission. The number of lawsuits filed by the Commission in 2009 (314) represents a 32.5% decrease from the record setting year of 1999 (465).
 

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Employers forced to implement voluntary separation or early retirement incentives to deal with the recent economic downturn sometimes make a no-rehire policy part of the package. There may be sound business reasons for doing so, for example, to avoid paying a salary to someone who was supposed to leave employment and is receiving separation or retirement benefits. However, employers who include a no-rehire policy as part of a separation incentive package run the risk of having to defend an age discrimination lawsuit if the policy is later applied to prevent a rehire. Recently, the Equal Employment Opportunity Commission ("EEOC") filed such a suit in federal court in New York. EEOC v. AT&T, Inc., Civil Action No. 09 Civ. 7323 (S.D.N.Y. 2009).

EEOC’s complaint alleges that, among other things, a no-rehire policy violates the Age Discrimination in Employment Act because it has an adverse impact on employees and applicants who are age 40 or older. The theory is that older employees are more likely to be denied employment under a no-hire policy because they are more likely to have accepted a voluntary separation or early retirement incentive.

Whether such a disparate impact claim is even available in the context of a failure to hire is open to question. However, EEOC has obtained a favorable decision on that issue from at least one other court. In EEOC v. Allstate Insurance, Co.,   (8th Cir. 2008), the United States Court of Appeals for the Eighth Circuit considered a similar “no-rehire” policy that applied to “employee-agents” who were terminated as part of a corporate reorganization. Allstate’s policy prohibited the rehire of any terminated employee-agent for one year or for so long as that employee was receiving severance benefits, whichever period was longer. Ultimately, the Eighth Circuit held that the “rehire” policy was an “employment policy” and not a “hiring policy,” and that the policy was therefore subject to a disparate impact challenge under the ADEA. Allstate reportedly settled the case for $4.5 million.
 

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Eighteen months after it was first signed into law by President Bush, Title II of the Genetic Information Nondiscrimination Act of 2008, also known as GINA, will take effect this Saturday, November 21, 2009. Title II prohibits employment discrimination based on genetic information, and imposes confidentiality obligations on employers who obtain such information.  Title II's requirements are described below.

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According to a recent decision by the United States Court of Appeals for the Second Circuit, an employer is not necessarily insulated from liability for the discriminatory acts of its independent contractors. Halpert v. Manhattan Apartments, Inc., Slip Op. No. 07-4074-cv (September 10, 2009). The case arose when the plaintiff, Michael Halpert, interviewed for a position as a “Shower,” a person who shows apartments to potential buyers. The person who interviewed Halpert for the position was an independent contractor of the defendant Manhattan Apartments. He allegedly told Halpert that “they were looking for someone younger.” Halpert sued contending that he was not hired for the position because of his age in violation of the Age Discrimination in Employment Act (“ADEA”). Manhattan Apartments contended that it could not be held liable for any alleged discrimination because the person who made the decision was an independent contractor who was making the hiring decision for himself, rather than for Manhattan Apartments. Relying on the Second Circuit’s decision in Robinson v. Overseas Military Sales Corp., 21 F.3d 502 (2d Cir. 1994), the United States District Court for the Southern District of New York agreed, and granted summary judgment dismissing the complaint.

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Although many employers have put a freeze on hiring during these tough economic times, as we ease out of the current recession, many employers are moving from a hiring freeze mode to a hiring expansion mode. If you are one of those employers, it is a opportune time to remember that federal and state equal employment opportunity laws prohibit prospective employers from asking certain questions during the hiring process, whether on a job application or in an interview. Asking such questions can lead to potential liability for discriminatory hiring and to costly lawsuits. Below are twelve key subjects to avoid during the hiring process.

 

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Few human resource professionals look forward to workplace discrimination investigations. They can be contentious and uncomfortable, and often reveal the uglier side of individuals and, sometimes, even entire segments of the company.  Of course, allegations of workplace discrimination cannot be ignored. In fact, a proper and complete investigation can be critical to an employer’s defense of such claims, and a poor or incomplete investigation can be almost as harmful as no investigation.  Below are a few tips for conducting good investigations.

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On July 7, 2009, Governor Paterson signed into law legislation which became effective immediately and prohibits an employer from discriminating against an individual because of actual or perceived status as a victim of domestic violence or stalking. Specifically, the law prohibits an employer from refusing to hire or employ such individuals, barring or discharging them from employment, or discriminating against them with respect to their compensation or their terms, conditions and privileges of employment. As a result, New York Law now prohibits employers from discriminating against individuals on the basis of “age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status.”

According to the sponsor of the legislation, this amendment was necessary since many women stay with their abuser because they lack alternative financial resources for themselves and their children, and because escaping an abusive relationship often depends on financial independence, which means finding and keeping a job. Furthermore, according to the sponsor, it is not unusual for a victim of domestic violence to be terminated from her job or demoted because she needs time off or flexible hours as a protective measure. By making it unlawful for an employer to discriminate against victims of domestic violence in hiring or employment practices, the law’s goal is thus to help ensure the safety as well as the economic viability of victims.

Employers should also be aware that another existing New York law provides additional protection to victims of domestic violence. Section 215.14 of the New York Penal Law, a statute of general application, requires employers to provide employees with an unpaid leave to appear as a witness, consult with the district attorney, or exercise the employee’s statutory rights under the law. Obviously, a victim of domestic violence might need one or more of these types of leave. To use this leave, the employee may provide notice of the need for leave at any time prior to the actual day of leave. Employers are permitted to ask the party who sought the attendance or testimony of the employee to provide verification of the employee's service. Penalizing or discharging an employee for absences by reason of a required appearance as a witness in a criminal proceeding or consultation with the district attorney or exercise of his or her rights as provided under law constitutes a class B misdemeanor.
 

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On July 15, 2009, the EEOC issued additional guidance to employees and employers on the use of releases in employment severance agreements.  After acknowledging the current economic downturn and the resultant increase in workforce reductions, the EEOC noted that increasing numbers of employees are being presented with severance agreements containing release language and are wondering: “Is this legal? Should I sign it?”  The EEOC Guidance is designed to assist employees in understanding waiver agreements and answering these questions.  The Guidance is also useful to employers seeking to develop severance and release arrangements that will pass muster with the EEOC. 

The EEOC Guidance provides instruction on the general requirements for a valid release of discrimination claims, as well as on the additional requirements applicable to age discrimination waivers covered by the Older Worker Benefit Protection Act (“OWBPA”) amendments to the Age Discrimination in Employment Act (“ADEA”).  The EEOC has issued detailed regulations interpreting and implementing the OWBPA/ADEA waiver rules (29 CFR § 1625.22), and much has previously been written about the requirements that must be satisfied to obtain an effective age discrimination waiver.  See BS&K Information Memos: "EEOC Issues Final Regulation On Waivers Under The Age Discrimination In Employment Act"  (Jan. 2001); "Lack of Valid Employment Releases Can Lead To Lawsuits" (Apr. 1998).  The EEOC Guidance reaffirms these requirements.  Under the ADEA waiver rules:  workers must be advised in writing to consult with an attorney; be afforded specified minimum time periods to consider the waiver (at least 21 days, or 45 days if offered as part of an “exit incentive” or "other termination program”); be allowed at least seven days after signing the waiver to revoke it; and receive other information about the benefits they will be receiving and the rights they will be giving up in order for the ADEA waiver to be valid (See EEOC Guidance at pp. 5-15). 

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Somehow our legislature and Governor found time to amend the New York State Human Rights Law to expand the application of civil fines and penalties to include cases of employment discrimination occurring on or after July 6, 2009. N.Y. Exec. Law Sec. 297(4). Previously, the imposition of civil fines had been limited to cases of housing discrimination. With the enactment of the new law they may now be assessed in all cases of employment discrimination, which account for 80% of Division of Human Rights’ cases.  A fine of up to $50,000 may be imposed, or in the case where the conduct is found to be “willful, wanton or malicious,” a fine of up to $100,000. Where the employer has fewer than 50 employees, civil fines and penalties may be paid in installments by the employer.

The purpose of the amendment, according to the Division, is to:

…greatly advance the Division’s mission to exercise the police power of the State for the protection of the public welfare, health and peace of the people of this State, and in fulfillment of the provision of the constitution of this State concerning civil rights. N.Y. Exec. Law § 290.1. The fines imposed will further the goal of equal opportunity in New York State by acting to deter and reduce discrimination on the basis of race, color, creed, national origin, sex, age, disability, sexual orientation, marital status, military status, and other protected categories.

Furthermore, the imposition of such fines will be in addition to and will not reduce or offset any compensatory damages awarded to a prevailing complainant. The fines are payable to the State.

The law does not change the types of relief that may be awarded to the complainant. Complainants who prevail in an action under state law may be awarded affirmative relief from the employer (e.g., be hired, promoted or reinstated) and awarded compensatory damages (economic damages and emotional distress damages. However, there is pending legislation in New York which would allow individuals to also recover punitive damages and reasonable attorneys fees for human rights law violations.

There is presently little guidance on how the penalties will be applied. The Division promises future guidelines. It may be that the standards applied in housing discrimination cases will be considered relevant.  In housing discrimination cases, the factors that determine if civil fines and penalties are appropriate are: 1) whether the respondent previously committed unlawful housing discrimination; 2) the respondent’s financial resources; 3) the degree of respondent’s culpability; and 4) the goal of deterrence. The Division may also consider whether: 1) the employer has an established anti-discrimination policy; 2) the policy was distributed to employees; 3) there is an effective complaint procedure; and 4) employees have been trained in the law and the employer’s policies.

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In many workplaces, it is not uncommon for employees to speak with each other about politics. As managers and employees learn each others’ political views, some employees may get the impression—rightly or wrongly—that their employers are discriminating against them because of political disagreements. 

Sometimes, political discrimination can be overt. In the 2004 presidential campaign, there was a well-publicized incident in which an employer in Alabama told an employee that she was being discharged because she had a John Kerry bumper sticker on her car.   But even when the employer does not expressly state why it has taken an adverse action against an employee, the circumstances may support an inference that the reason was political.

Employers and employees often assume that employment discrimination on the basis of political beliefs is unlawful. After all, discrimination on the basis of such obscure categories as marital status and genetic predisposition is unlawful, and human resources professionals constantly stress that all personnel decisions should be based on merit.  However, surprising as it may seem, federal and New York law do not generally prohibit political discrimination in the private sector. The First Amendment restricts action against political dissentersby the government, but it does not restrict action by private actors. An employer that fires an employee because of a political bumper sticker may well be acting within its legal rights, reprehensible as such an action may seem. This blogpost examines the types of political discrimination that are plainly unlawful, as well as legal theories that can be argued when none of the well-established prohibitions applies.

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It’s a case that has been to the Second Circuit twice, resulting first in a win and then a “bonus” for the prevailing Defendants. After an approximately one-month trial in November 2005 before the United States District Court for the Eastern District of New York, the jury returned a verdict in favor of the Town of Huntington and an individual board member and dismissed Plaintiff’s claims of sexual harassment, discrimination, hostile work environment, and retaliation. The United States Court of Appeals for the Second Circuit affirmed the verdict. 

After winning the case, Defendants requested reimbursement for their “costs” incurred during the lawsuit, including copying costs, deposition transcripts, and daily trial transcripts, pursuant to Federal Rule of Civil Procedure 54(d) and a federal statute, 28 U.S.C. §1920. The request involved a significant amount of money. During the trial, the Defendants had ordered daily transcripts of the trial testimony from the court reporter. Those transcripts cost approximately $50,000 for over 3,000 pages of testimony generated during the course of the lengthy trial.

District Court Clerks have the power to award costs initially. The Clerk’s decision, however, is reviewable de novo by the District Court which tried the case. The Clerk denied Defendants’ request for the high cost of the daily transcripts, but the District Court reviewed the Clerk’s decision and granted the request – including fees for daily trial transcripts.

Such costs are not customarily awarded. Daily trial transcripts are taxable to the losing party as costs only if they are “necessarily obtained for use in the case.” 28 U.S.C. §1920. In this case, the District Court agreed with the Defendants that all relevant factors favored awarding the cost of daily transcripts. The District Court cited the length of the case, Plaintiff’s “confusing and muddled” presentation, the fact that Plaintiff’s credibility was a crucial issue in the case, and the fact that the Court and the Defendants’ counsel had to resolve confusion by pointing to the record, as factors requiring the use of daily transcripts. The Court also noted that the Plaintiff failed to make any affirmative showing that he was financially unable to bear the cost of the daily transcripts. In some cases, indigency may convince a District Court that a significant award of costs is not appropriate. Perks v. Town of Huntington, Slip Op. 99-cv-4811 (March 31, 2008).

Plaintiff appealed the award of costs to the Second Circuit, challenging the District Court’s award of costs as an abuse of discretion. On May 27, 2009, the Second Circuit issued a summary order affirming the District Court's decision. Perks v. Town of Huntington, Slip Op. 08-cv-2123 (May 27, 2009). As a result, the Defendants not only won their case but the Plaintiff was also required to pay them over $58,000 in costs.

The Defendant Town of Huntington was represented by Ernest R. Stolzer of Bond, Schoeneck & King, PLLC in Garden City, New York.

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In what appears to be the first reported decision of its kind, the United States District Court for the Northern District of New York recently interpreted an Equal Employment Opportunity Commission (EEOC) regulation to permit an employer’s efforts to control retiree health insurance costs by coordinating its retiree health insurance plan with Medicare. Lefevre v. Niagara Mohawk Power Corp., slip op. no. 1:06-CV-768 (N.D.N.Y. April 21, 2009). The employer provided health insurance benefits to retirees under a plan that required a Medicare eligible employee to apply for Medicare Parts A and B. Medicare then became the primary health insurance coverage, and the plan paid benefits to supplement the benefits paid by Medicare. Due to the terms of the plan, a Medicare eligible retiree’s share of the plan premium was somewhat greater than that of a non-Medicare eligible employee. 

Several Medicare eligible employees sued alleging that the higher premium share constituted age discrimination in violation of the Age Discrimination in Employment Act (ADEA). The ADEA prohibits discrimination based on age in terms and conditions of employment, including the terms of benefit plans. 29 U.S.C. §§ 623(a) & 630(l) However, the ADEA also authorizes the EEOC to create reasonable exemptions from the statute’s prohibitions when necessary and proper in the public interest. 29 U.S.C. § 628 EEOC created a coordination with Medicare exemption for employee benefit plans that provide health insurance benefits that are altered, reduced, or eliminated when the plan participant becomes Medicare eligible. 29 C.F.R. § 625.32(b) 

In the Lefevre case, the Court found that the regulation applied and required dismissal of the plaintiffs’ age discrimination claim. Because the premium differences were the result of the coordination with Medicare, they fell squarely within the regulatory exemption, even though they only impacted individuals who were age 65 (the age of Medicare eligibility) and older.

The Court also examined and applied a safe harbor provision within the ADEA which permits employers to implement a bona fide employee benefit plan which treats older and younger workers differently when either the costs are the same for both sets of workers, or the benefits are the same, the equal cost/equal benefit provision. 29 U.S.C. § 623(f)(2)(B)(1).  In Lefevre, the Court found that the equal cost provision did not apply – the employer was in fact trying to lower its retiree health insurance costs by coordinating benefits with Medicare – but that the equal benefit rule did apply because the Medicare eligible retirees received the same benefit as non-Medicare eligible retirees. The plan supplemented any benefit provided by Medicare to provide full coverage.

Because the plan fell within the EEOC’s regulatory exemption, as well as qualifying under the equal benefit rule, the Court granted summary judgment to the employer and dismissed the complaint. The employer was represented by Robert A. LaBerge and Louis Orbach of Bond, Schoeneck & King, PLLC, in Syracuse, New York.

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