Kentucky Employment Law Blog

Tender-Back Doctrine Inapplicable to Title VII and Pregnancy Discrimination Claims, Sixth Circuit Rules

The common law tender-back doctrine does not apply to Title VII and pregnancy discrimination claims the Sixth Circuit ruled recently in McClellan v. Midwest Machining Inc.

Jena McClellan had established herself pretty well as a telemarketer at Midwest Machining until she had to report that she was pregnant. Her supervisor commenced a litany of negative comments and, about three months later, she was fired. When McClellan was fired she was made to meet with the company president, Philip Allor, who, McClellan claimed, pressured her into signing an agreement releasing all her claim in exchange for $4,000.  McClellan did sign the agreement.

McClellan was paid the severance money and later filed a pregnancy and sex discrimination lawsuit. About three weeks after the suit was filed and before any answer was due, McClellan paid back the $4000 she'd been paid to release her claims. The district court allowed limited discovery  as to whether McClellan had entered the severance agreement knowingly and voluntarily. The corporation moved for summary judgment; although the district court observed that there were disputed issues of fact regarding whether McClellan had entered the agreement knowingly and voluntarily, it gave the corporation a summary judgment because McClellan didn't pay the $4000 back before she filed suit.

The "tender-back doctrine" is from contract law and holds that "contracts tainted by mistake, duress, or even fraud are voidable at the option of the innocent party" but "before the innocent party can elect avoidance, she must first tender back any benefits received under the contract." But if the innocent party fails to do so within a reasonable time of learning that she can rescind the contract, she ratifies the contract and makes in binding.

The Sixth Circuit reversed, explaining that "requiring recently-discharged employees to return their severance before they can bring claims under Title VII ... would serve only to protect malfeasant employers at the expense of employees' statutory protections at the very time that those employees are most economically vulnerable" and held that "the tender-back doctrine does not apply to claims" brought under Title VII.

Robert L. Abell
www.RobertAbellLaw.com

Front Pay in Discrimination Cases for the Younger Plaintiff

"Front pay" or future economic damages ("lost future wages" being another way to put it) is an available remedy in employment discrimination and retaliation cases.  Their determination is more complicated when the plaintiff is younger, has a long working career ahead and may not yet have a much-developed work history.  But a plaintiff's "young age" does not preclude "front page" as the Sixth Circuit ruled recently in Varlesi v. Wayne State University, a pregnancy discrimination and retaliation case.

The plaintiff, Tina Varlesi, an excellent student working on her M.S. in Social Work at Wayne State, was subjected to pregnancy discrimination and eventually ejected from the graduate program rendering her unable to complete the requirements for her degree. Her dismissal from the program not only kept her from getting her degree, but she was unable to enroll in another graduate program and a previous job offer contingent upon her completion of the program evaporated. A jury awarded her $848,890 in damages including $200,000 in future economic losses or "front pay."

On appeal, Wayne State University argued, among many other things, that "any award of future damages would be too speculative as a matter of law due to Varlesi's young age." This argument, along with all the others advanced by the employer, was most emphatically rejected by the Sixth Circuit:

The defendant cites several cases of support for the proposition that Varlesi's young age necessarily rendered any future damages unavailable as a matter of law, but none of those cases actually holds (or even suggest) that her "young age" is determinative. And that is not the law. The law requires that, because future damages (a.k.a. front pay) are "often speculative," the District Court must have "flexibility and wide discretion" in crafting such a remedy. Shore v. Federal Express, 42 F3d 373, 378 (6th Cir 1994). And there are certain factors that must guide the award of future damages, including mitigation of damages, "the availability of employment opportunities, the period within which one by reasonable efforts may be reemployed, the employees working life expectancy, [and] the discount tables to determine the present value of future damages," among others. Roush v. KFC, 10 F3d 392, 399 (6th Cir 1993). Varlesi provided evidence about, and the District Court considered, these factors, including her mitigation efforts, her inability to enroll in other graduate programs after her failure at WSU, her job search and the prior job offer, and Bureau of Labor statistics.

Robert L. Abell
www.RobertAbellLaw.com

 

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The Business-Judgment Instruction in Discrimination and Retaliation Cases

The business-judgment jury instruction used in discrimination and retaliation cases is to the effect that an employer has discretion over business judgments even if exercised wrongly. It is a means by which employers seek to obfuscate issues (such as by jurors confusedly equating exercised wrongly with exercised unlawfully) and escape liability for discriminatory and/or retaliatory employment practices. But are employers entitled to the business-judgment instruction as a matter of course? "No" answered the Sixth Circuit recently in Varlesi v. Wayne State University, a pregnancy discrimination and retaliation case in which a jury awarded the plaintiff $848,690 in damages.

The plaintiff, Tina Varlesi, was working on her M.S. in Social Work at Wayne State University, a two-year graduate degree program consisting of both classroom and "field" work at an agency. Varlesi was a star student in her first year. She received "excellent grades in her classes" and perform so well and her fieldwork that "one agency even offered her a job, to commence after she obtained her degree." arlesi became pregnant following her first year, "although she was not married, and during her placement in the fall semester of her second year, the trouble started (though her classroom grades remained excellent)."

The "trouble," despite Varlesi's repeated complaints and despite her continued excellence in her class work, resulted eventually in her being dismissed from the program. She filed suit claiming pregnancy discrimination and retaliation in violation of Title IX and Michigan's Elliott-Larsen Civil Rights Act. The jury awarded her damages of $898,690 ($148,690 economic; $200,000 future; and $500,000 non-economic).

On appeal, the employer, Wayne State University, argued, among other things, that the District Court erred in rejecting its request for a "business-judgment instruction, i.e., Wayne State had discretion over its business judgments, even if they are wrong." This argument was summarily rejected by the Sixth Circuit which explained:

But the decision to discriminate and retaliate against a student and then cover it up, is not a business judgment.

The Sixth Circuit's opinion was authored by Circuit Judge Alice Batchelder, who is not known as generally receptive to plaintiffs in employment discrimination cases, joined by Circuit Judges David McKeague and Jane Stranch.

Robert L. Abell
www.RobertAbellLaw.com

 

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Pregnancy Discrimination - An Employer Must Accommodate A Pregnant Employee As Done Other Employees "Similar In Their Ability or Inability To Work," Supreme Court Rules

The Pregnancy Discrimination Act requires an employer to accommodate a pregnant employee as the employer accommodates other employees "similar in their ability or inability to work" the Supreme Court ruled today in Young v. UPS.  The Court's 6-3 ruling reinstated Peggy Young's suit while remanding the case to the Fourth Circuit.

The Court's opinion outlined the parameters of a pregnancy discrimination case.  At the initial stage, a pregnant employee must prove that she belongs to the protected class (which means that she is pregnant), that she sought accommodation (that for some pregnancy-related reason she requested some alteration of her job duties or tasks), that the employer did not accommodate her, and that the employer did accommodate others “similar in their ability or inability to work.”  This doesn't require much: the Court again emphasized that this burden is "not onerous."  

This requires the employer to come up with some passably legitimate explanation for not accommodating the pregnant employee.  But the employer's reason, the Court stated, must consist of more than "simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those ('similar in their ability or inability to work') whom the employer accommodates."  

But of course it does not end there, the pregnant employee must demonstrate the employer's explanation to be largely nonsense, to be pretextual in the lexicon of employment discrimination litigation.  This is done by "sufficient evidence that the employer's policies impose a significant burden on pregnant workers, and that the employer's 'legitimate, nondiscriminatory' reasons are not sufficiently strong to justify the burden, but rather -- when considered along with the burden imposed -- give rise to an inference of intentional discrimination."  Young had done so with proof that UPS accommodated most employees who had restrictions because of some reason other than pregnancy but did not accommodate any pregnant employees.  

Robert L. Abell
www.RobertAbellLaw.com

 

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Linda Greenhouse for the New York Times offers an excellent essay on the evolution of pregnancy discrimination law, the Pregnancy Discrimination Act and the case, Young v. UPS, recently argued in the Supreme Court: Heavy Lifting: The Supreme Court and Rights of Pregnant Workers.

Robert L. Abell
www.RobertAbellLaw.com

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The Pregnancy Discrimination Act and Justice Ginsburg Come Full Circle

Back in the 1970's Justice Ruth Bader Ginsburg (the "Notorious RBG") litigated and lost pregnancy discrimination cases in the Supreme Court; then skillfully advocated for Congress to pass what became the Pregnancy Discrimination Act. Now, in a new case, Young v. UPS, the Pregnancy Discrimination Act is again before the Court. Dorothy Samuels discusses this interesting confluence of history in the New York Times: Deja Vu Pregnancy Discrimination. 

Robert L. Abell
www.RobertAbellLaw.com

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Pregnancy Discrimination: Who Is Similarly-Situated?

A prima facie case of pregnancy discriminationhas four elements: (1) that the plaintiff was pregnant, (2) that the plaintiff was qualified for her job, (3) that the plaintiff was subjected to an adverse employment action; and, (4) that there is a nexus between her pregnancy and the adverse employment decision. One way the plaintiff can establish the causation nexus is by proof regarding "another employee who is similarly situated in her or his ability or inability to work [and] received more favorable benefits." But who is similarly situated? Is an employee with a work-related restriction similarly situated? This question the Sixth Circuit again answered in Latowski v. Northwood Nursing Center, No 12-2408 (December 23, 2013).

Jennifer Latowski was employed as a certified nursing assistant by Northwoods nursing center. She became pregnant and, as a result of her pregnancy, her doctor imposed a 50 pound lifting restriction. When Latowski's doctor did not rescind the lifting restriction, she was fired. She filed a wrongful termination suit claiming pregnancy discrimination. A federal district court granted summary judgment to the employer. The Sixth Circuit reversed.

The Sixth Circuit held that Latowski had presentedsufficient proof of a nexus between her pregnancy and her termination through proof "that Northwood treated other CNAs with similar lifting restrictions more favorably by assigning them to 'light duty.'"the court further observed that while "these employees differed from Latowski because their medical conditions were work-related, they were similarly situated in their ability to work because they were placed under lifting restrictions of up to 50 pounds." This followed the Sixth Circuit's earlier holding in Ensley-Gaines v. Runyon, 100 F3d 1220, 1226 (6th Cir 1996), where it held that "the Pregnancy Discrimination Act requires only that the employee be similar in his or her ability or inability to work."

This is an important distinction: it is a violation of the Pregnancy Discrimination Act for an employer to discriminate in its treatment of an employee with a work-related restriction (such as an employee was suffered a work injury) and a pregnant employee that has a similar restriction. As long as the two are similar in their ability or inability to work, they are similarly situated for proof purposes under the Pregnancy Discrimination Act.

The Sixth Circuit's decision in Latowski was also discussed in a previous post: Pregnancy Discrimination: Do Pregnancy-Related Restrictions Mean That the Employee Is No Longer Qualified for Job?

Robert L. Abell
www.RobertAbellLaw.com

 

 

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Jennifer Latowski, a Certified Nursing Assistant (CNA), was terminated after she told her employer, Northwoods nursing center, both that she was pregnant and that she had a 50 pound lifting restriction as a result. Management at the nursing home told Latowski that she could continue working only if her Dr. rescinded in writing the 50 pound lifting restriction; otherwise, Latowski would be deemed to have "resigned" her employment. Latowski's doctor did not alter her restrictions, and she was terminated.

After being fired, Latowski filed suit claiming pregnancy discrimination along with other claims.the district court granted a summary judgment to the employer finding, among other things, that Latowski could not present even a prima facie case of pregnancy discrimination, because she could not show she was "qualified" to do her job given her pregnancy-related lifting restriction. The Sixth Circuit reversed, Latowski v. Northwood Nursing Center, No 12- 2408 (December 23, 2013).

One of the elements of a prima facie case of pregnancy discrimination is that the employee was "qualified for her job." In Tysinger v. Police Dept. of Zanesville, 463 F2d 569 (6th Cir 2006), the Sixth Circuit ruled as to the qualifications element of the prima facie case as follows: "For purposes of the prima facie case analysis, a plaintiff's qualifications are to be assessed in terms of whether he or she was meeting the employer's expectations prior to and independent of the events that led to the adverse action." in other words, in assessing whether or not a plaintiff has presented a prima facie case of discrimination, the employee's ability to do her job – whether or not she was "qualified" – should be determined based on what she could and could not do prior to and independent from any pregnancy-related restrictions. So the district courtmade a basic error.

Robert L. Abell
www.RobertAbellLaw.com

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Pregnancy Discrimination Harms Perpetuated By Supreme Court

The United States Supreme Court on Monday in its decision in AT & T Corp. v. Hulteen perpetuated the decades-in-accruing harms of pregnancy discrimination. The Court ruled 7-2 that working women must continue to bear the harm and the lower pension benefits inflicted by systematic pregnancy discrimination prior to enactment of the Pregnancy Discrimination Act in 1979. 

The case arose from the method by which AT & T calculated service credit time toward determining an employee's pension benefits. Basically, an employee received service credit time toward his or her pension for all leaves of absence caused by medical conditions, except those caused by pregnancy. The plaintiffs, four women who were or are life-long employees of AT & T, claimed that this method exclusing pregnancy leave from the calculation of service credit time discriminates against them based on their female sex.

The Court rejected their argument based principally on its 1976 decision in General Electric Company v. Gilbert, 429 U.S. 125 (1976), which held that a disability benefit plan excluding disabilities related to pregnancy was not sex-based discrimination within the meaning of Title VII. The Gilbert decision departed from the decision of every appeals court that had ruled on the issue. Just two years later, Congress enacted the Pregnancy Discrimination Act "so as to make clear that it is discriminatory to treat pregnancy-related conditions less favorably than other medical conditions."

But the Court ruled that the Pregnancy Discrimination Act did not help, because the Court majority held that the PDA applied only prospectively and did not ameliorate the discriminatory practices that Gilbert sanctioned. And so 31 years after the PDA was enacted, the Supreme Court disregards Congress's efforts to correct the Gilbert decision and perpetuates the discrimination that the PDA was intended to eliminate.  

Robert L. Abell
www.RobertAbellLaw.com

Pregnancy Discrimination Act Marks 30 Year Anniversary

Today marks the 30 year anniversary of the Pregnancy Discrimination Act.  In recognition of this milestone, the National Partnership for Women and Families has released a report, The Pregnancy Discrimination Act: Where We Stand 30 Years Later, on the PDA's effects and proposes some improvements.  Highlights include the following:

• charges of pregnancy discrimination to the EEOC increased 65% from 1992 to 2007 with this increase disproportionately attributable to pregnancy discrimination aimed at women of color
• working in a historically female occupation does not significant decrease the likelihood of pregnancy discrimination
• pregnancy discrimination complaints have risen at a rate faster than that by which women have entered the workforce
• overt, direct pregnancy discrimination was not as uncommon as other forms of discrimination with cases including a hotel manager who was repeatedly demoted after announcing her pregnancy and a senior management representative stated that pregnant women were inappropriate for management positions and missed to much work, a maternity clothing specialty store settled a lawsuit based on its policy of not hiring pregnant applicants and a rising star at another company was told to consider her options and had her management training canceled after she announced her pregnancy
• social science research has revealed predominant social attitudes that pregnant women should favor family over their job

Robert L. Abell
www.RobertAbellLaw.com