Supreme Court Routs Title VII in 2007: Goodyear Wins Right to Discriminate Based on Gender

Employment attorneys seem to agree that the most controversial decision in 2007 was the Supreme Court’s ruling in Lilly Ledbetter v. Goodyear Tire & Rubber Co. Let’s review what happened:

In 1979, Lilly Ledbetter began working as a supervisor at Goodyear’s tire assembly department in Gadsden, Alabama. During her first weeks of employment, her wages were identical to those of her male counterparts. Twenty years later, a rift in pay between Ms. Ledbetter and her male colleagues had become painstakingly clear.

In 1998, Ms. Ledbetter received an anonymous letter, which revealed that she made about $15,000 less than her male co-workers at Goodyear. Inexplicably, Ms. Ledbetter’s pay was not even on par with recent hires with far less job experience. Ms. Ledbetter filed a discrimination charge with the Equal Employment Opportunity Commission less than a month after receiving the anonymous tip. At trial, her attorneys highlighted the disparity in pay between males and females doing the same work at the Gadsen Goodyear plant. The jury ultimately sided with Ms. Ledbetter, awarding her over $3.5 million in damages, which the district judge later reduced down to $360,000.

Title VII requires discrimination complaints to be made within 180 days of the employer’s discriminatory conduct. Goodyear appealed, arguing that the jury should not have considered each of the annual salary reviews that Ms. Ledbetter had received throughout her 20 year career with Goodyear. Citing Title VII, Goodyear maintained that the jury should only have evaluated the lone annual salary review that Ms. Ledbetter received in the 180 day limitations period before Ms. Ledbetter filed her complaint, despite the fact that the pay disparity had occurred over nearly two decades.

The U.S. Court of Appeals for the Eleventh Circuit, in part, agreed with Goodyear’s argument and held that the jury should have not have been allowed to evaluate Goodyear’s discriminatory pay decisions over Ms. Ledbetter’s entire career in light of Title VII’s 180 day limitations period. In doing so, the Eleventh Circuit ignored the vital fact that Ms. Ledbetter had not learned of the pay disparity until 1998.
Determined to seek redress, Ms. Ledbetter appealed to the United States Supreme Court, which granted certiorari. In a 5 – 4 decision, the Supreme Court ruled that Ms. Ledbetter’s claim was time-barred by Title VII’s 180 day limitations period. In a scathing dissent, Justice Ruth Bader Ginsburg called the majority’s ruling “a cramped interpretation of Title VII, incompatible with the statute’s broad remedial purpose” and suggested that “the Legislature may act to correct this Court’s parsimonious reading of Title VII.”

The Supreme Court’s decision in Ledbetter provides a sobering example of how quickly years of progress can unravel through “cramped interpretations” and “parsimonious readings” of statutes designed to ensure equality across genders.

In response to the outrage surrounding the Ledbetter decision, a bipartisan bill called the Fair Pay Restoration Act (S. 1843) has emerged in the Senate. Among others, the bill is supported by Senators Kennedy (D-MA), Snowe (R-ME), and Specter (R-PA). Click here to urge your Senator to support the Fair Pay Restoration Act.

Age Discrimination Highlighted in Boston Business Journal

Today, the Boston Business Journal featured an interesting article discussing age discrimination in the workplace. Entitled (ironically), Age does have its advantages in today’s job market, the article’s author, Matthew Youngquist, writes:

Whether overt or covert, age-related discrimination is a fact of life in the modern hiring process and a phenomenon beyond any plausible denial.

When it comes to avoiding liability, employers are much more sophisticated than they were decades ago. Direct evidence of discrimination these days is rare. Generally speaking, age discrimination cases are often built through circumstantial evidence. Let’s take downsizing for instance. Company A decides it needs to cut a percentage of its workforce due to the downturn in the economy. 40% of Company A’s workforce is 40 years old or older. During its reduction in force (RIF), 75% of those employees terminated by Company A happen to be 40 years old or older. This certainly raises an inference of age discrimination based on circumstantial evidence. The employer, of course, can always offer legitimate, non-discriminatory reasons for the disproportionate number of older workers affected by the RIF.

Youngquist’s article, however, indicates that older workers may have trouble just getting their foot in the door, let alone surviving a RIF:

Not only will you almost never see a published job listing asking for more than seven to 10 years of experience, but in recent years, I’ve heard employers and recruiters talk about their desire to locate “early-career professionals” or “candidates with a long runway” — both euphemisms I took to mean “older workers need not apply.”

The Bureau of Labor Statistics forecasts the number workers over 55 years old growing at an annual rate of 4% — about four times quicker than the labor force as a whole. It doesn’t take an MBA to know that evaluating and rewarding employees based on their productivity, instead of their age, makes good business sense. Time will tell how Corporate America reacts to its aging workforce.

Employment Contracts For Executives: 8 Things to Consider

Employment contracts must be drafted with care. Paula Barran, an attorney specializing in employment law in Oregon, wrote a great article on the 8 areas that well-drafted employment contracts should address: (1) duties, (2) obligations, (3) timing, (4) payment, (5) extra benefits, (6) parting, (7) prenuptials, and (8) disagreements.

Unless otherwise specified, employment in Massachusetts is “at will.” This means that employees can be terminated for any reason or no reason, so long as the termination is not motivated by the employee’s status within a protected class such as age, race, gender, national original, or handicap. In other words, an employer can not fire you because you are female, 40 years old or older, require medical leave, or because you’re black.

This also means that an employer can legally fire you for an arbitrary and capricious reason. To illustrate the concept of “at will” employment, suppose you are a Red Sox fan. You’ve been with Company A for 20 years. Unbeknownst to you, your new boss is a Yankees fan. You send out a company-wide e-mail celebrating the Red Sox second World Series Championship in just three years. Angered and embarrassed, your boss terminates your employment because you sent the e-mail. Illegal? Not if you’re an “at-will” employee.

Employment contracts create the opportunity to leave behind the precarious world of “at will” employment, at least until the contract the expires. An employment contract should be seen as the equivalent to tenure. The employment contracts that I have negotiated, for instance, typically include a “cause” provision, stating that an employee can only be terminated for “good cause” or “just cause.” As you’ve probably guessed, sending an e-mail celebrating a Red Sox victory would not meet the “good cause” standard.

As Attorney Barran points out in her article, a thorough employment contract will fill many holes, giving both sides security and predictability should the relationship unravel. Regarding payment, for example, a host of questions arise from the employer’s perspective:

When it comes to the payment part, employee compensation, be as rigorous and careful as you can possibly be because sloppy drafting gets expensive. If the employee quits on Jan. 1, are you still obligated to pay the bonus for the previous year when you close the books? Is the employee going to be entitled to a stream of commission income after quitting? Did you promise a “guarantee”? Does that mean the same thing as severance pay, and do you have to pay it after you fire the employee for stealing from you?

Given the complexity and breadth of issues that many employment contracts address, its not a bad idea to have your contract reviewed by an attorney specializing in employment law. You can bet that your company’s attorney has already tinkered with it. Your interests should be protected as well.
The Law Office of Alan H. Crede, P.C.

Gender Discrimination Class Action Certified by Ninth Circuit Against Wal-Mart

Wal-Mart is just not getting it: gender discrimination in the workplace really is illegal. From coast to coast, Wal-Mart is learning this principle one case at a time. This past summer, in Haddad v. Wal-Mart, a Berkshire County jury in Massachusetts awarded nearly $2 million to a former Wal-Mart pharmacist who was paid less then her male counterparts and later fired in retaliation for complaining. More recently, on December 11, 2007, the Ninth Circuit in Dukes et al. v. Wal-Mart Stores, Inc. affirmed a class certification order. With the decision, Wal-Mart finds itself in the familiar position of defending claims of gender discrimination.

The case began in 2000. Betty Dukes, a 54-year-old Wal-Mart employee in California, worked for the company for six years. During her tenure, she received excellent performance reviews. Notwithstanding her stellar performance, Ms. Dukes was consistently passed up for promotions and salary increases that went to lesser qualified males. The deeper her attorneys dug, the more they realized that Ms. Dukes’ experience was not an isolated occurrence.

Dukes v. Wal-Mart Stores, Inc. has become the largest civil rights class action suit in United States history, seeking redress for approximately 1.6 million women who work or have previously worked in a Wal-Mart store since December 1998. To say the least, this case is being closely followed.

Family Medical Leave Act (FMLA) Expanded

Today, Congress passed the 2008 National Defense Authorization Act, which included provisions that expand the Family Medical Leave Act (FMLA). The amendments include: (1) up to six months of leave for family members caring for military veterans injured while on active duty in the U.S. Armed Forces, and (2) up to twelve weeks of leave to family members of service members called up to active duty under certain circumstances.

The amendments constitute the first revisions to the FMLA since its passage in 1993. The FMLA’s original requirements, which include the duty to return employees to the same position or an equivalent position with substantially similar duties and responsibilities, will apply to the two new categories of leave.

Age Discrimination in Employment

The Age Discrimination in Employment Act (ADEA), which prohibits workplace discrimination against employees 40 years old or older, celebrates its 40th birthday this month. With the ADEA came the prohibition of mandatory retirement and mistreatment in the workplace based on age.

Today, all baby boomers — those born between 1946 and 1964 — in the workforce are protected under the ADEA. Currently, boomers make up about one-third of the U.S. workforce. By 2010, estimates reveal that workers aged 45 to 54 will increase 21%; the number of workers aged 55 to 64 will increase 52%.

Although the ADEA has been around for nearly half a century, signs of age discrimination have shown no signs of abating. In 2006, the federal government received approximately 16,500 age discrimination complaints, collecting $51.5 million in settlements. More recently in 2007, Best Buy Co. settled a class action age discrimination lawsuit brought by 44 former IT employees in 2004.

As baby boomers inch toward retirement, age discrimination suits will undoubtedly continue to rise unless employers change their perception.

Madison Square Garden Settles Sexual Harassment Suit

The Knicks are having a bad year. Isiah Thomas’s bad karma isn’t helping. In October 2007, a New York jury returned a verdict against Thomas and Madison Square Garden (MSG) for sexual harassment. In a rare move only reserved for the most egregious of cases, the jury levied a punitive damages award of $11.6 million. In doing so, MSG received a clear message to clean up their act.

In 2000, the plaintiff, Anucha Browne Sanders, was hired by the New York Knicks as a marketing executive. In 2002, she received a promotion to Senior Vice President of Marketing. Thomas’ tenure commenced in December 2003. Shortly thereafter, the sexual harassment began. In January, MSG fired Sanders after she repeatedly reported Thomas’ inappropriate conduct.

Declaring the verdict a “travesty of justice,” MSG vowed to appeal. The case was slated to resume in early-December before U.S. District Judge Gerard E. Lynch. Among the issues to be decided were Sanders’ compensatory damages, which would involve a combination of lost back wages and future loss of income. Looming overhead was also the millions of dollars in legal fees that the Knicks would have to pay to Sanders’ attorney.

Realizing that their defense didn’t have a leg to stand on, the Knicks wisely chose to settle the matter instead. In settling, MSG avoided paying Sanders’ legal fees and amassing more legal fees of their own. Reports indicate that MSG didn’t catch much of a break on the punitive damages award. The final figure is rumored at $11.5 million — only about $100,000 less than the jury’s verdict.