SUMMER 2007 NEWSLETTER - EMPLOYMENT LAW UPDATE

By Joshua Skinner

United States Supreme Court

• Arbaugh v. Y & H Corporation d/b/a The Moonlight Cafe, 546 U.S. 500; 126 S. Ct. 1235 (February 22, 2006)

The requirements of Title VII only apply to an “employer” as that term is defined in the statute. In order to qualify as an “employer,” a defendant must meet an employee-threshold of at least fifteen (15) employees. The question of whether a defendant meets the employee-threshold is an element of the plaintiff’s claim, but the defendant must dispute whether it meets the employee-threshold before the close of trial or the question is waived.

Arbaugh brought a Title VII sexual harassment claim against her former employer, Y & H Corporation. After trial on the merits and a jury verdict in favor of Arbaugh, Y & H filed a motion to dismiss alleging, for the first time, that it had fewer than fifteen (15) employees. Y & H further argued that the employee-threshold in Title VII was a jurisdictional issue that cannot be waived and can be raised at any point in the litigation. The district court granted the motion to dismiss and the Fifth Circuit Court of Appeals affirmed.

The Supreme Court reversed the decision of the Fifth Circuit and held that because Congress did not indicate in Title VII that the fifteen (15) employee threshold is jurisdictional, it should be treated as an element of a plaintiff’s claim for relief. As a result, if a defendant does not raise the issue before the close of trial, it is waived.

Further Note: In Minard v. ITC Deltacom Communications, Inc., 447 F.3d 352 (5th Cir. April 18, 2006), the Fifth Circuit applied Arbaugh to the employee-threshold in the Family Medical Leave Act (FMLA). The Fifth Circuit held that the employee-threshold in the FMLA is an element of the plaintiff’s claim and the employer can be estopped from challenging it if (1) the employer erroneously represented to the employee, with reason to believe that she would rely on the representation, that she was an eligible employee under the FMLA and (2) she did reasonably rely on the representation to her detriment.

• Garcetti v. Ceballos, __ U.S. __; 126 S. Ct. 1951 (May 30, 2006)

The First Amendment does not protect a government employee from discipline based on speech made pursuant to the employee’s official duties.

Ceballos was an assistant district attorney who wrote a memorandum for his supervisor in which he contended that a warrant in a pending criminal case had been obtained based on false representations. Ceballos contended that he was subsequently subjected to a series of retaliatory employment actions. Ceballos brought suit, but summary judgment was entered against him because the memorandum was written pursuant to his employment duties. On appeal, the Ninth Circuit Court of Appeals reversed, holding that Ceballos’ allegations of wrongdoing in the memorandum were protected speech under the First Amendment.

The Supreme Court reversed the decision of the Ninth Circuit, holding that Ceballos’ memorandum was not First Amendment speech because it was written pursuant to his employment duties. The Supreme Court distinguished between actions done as a citizen, even if one with special knowledge, and actions done as an employee. Ceballos’ memorandum was provided to his supervisors as part of his responsibilities as an assistant district attorney, not as a citizen reporting on the misconduct of government officials.

Further Note: In Williams v. Dallas Ind. Sch. Dist., __ F.3d __ (5th Cir. February 13, 2007), the Fifth Circuit applied Garcetti to an Athletic Director who made internal complaints about financial misconduct of a school principal. While the Fifth Circuit noted that the memorandum in Williams was not required by the plaintiff’s employment, it was nevertheless written pursuant to his employment responsibilities because it related to financial misconduct that was affecting his ability to fulfill his duties as Athletic Director.

• Burlington Northern & Santa Fe Railway Company v. White, __ U.S. __; 126 S. Ct. 2405 (June 22, 2006)

Title VII prohibits retaliating against any employee or job applicant who opposes a practice made unlawful by Title VII or who takes part in a Title VII proceeding or investigation. This prohibition does not apply solely to actions by the employer related to employment or that occur at the workplace. Instead, it applies to any materially adverse action that would be harmful to the point that a reasonable employee or job applicant would be dissuaded from making or supporting a charge of discrimination.

White was employed by Burlington Northern as a track laborer and assigned to operate a forklift. After White made a successful sexual-harassment complaint against a supervisor, the task of operating the forklift was reassigned to another track laborer. In addition, she was subsequently suspended for 37-days without pay. A jury found for White and the Sixth Circuit Court of Appeals affirmed the entry of judgment by the district court, holding that the evidence was sufficient to establish a materially adverse change in the terms and conditions of employment. The Fifth Circuit Court of Appeals had a more restrictive standard that required a plaintiff to show an “ultimate employment decision;” in other words, an action such as hiring, granting leave, discharging, promoting, or compensating. Some Circuits, however, such as the Seventh and District of Columbia Circuits, only required the plaintiff to show that the employer’s action would have been material to a reasonable employee.

The Supreme Court affirmed the decision of the Sixth Circuit, but held that the standard used by the Seventh and District of Columbia Circuits was the correct standard because Title VII does not limit the application of its anti-retaliation provision to employment related conduct. As a result, the anti-retaliation provision applies to any materially adverse action that would be harmful to the point that a reasonable employee or job applicant would be dissuaded from making or supporting a charge of discrimination.

Fifth Circuit

• Dean v. City of Shreveport, 438 F.3d 448 (5th Cir. January 25, 2006)

Even if a race conscious hiring process was constitutional under the Equal Protection Clause when it was adopted, it must continue to be justified by a compelling government interest and must be narrowly tailored to further than interest. Moreover, even if the hiring process is constitutional under the Equal Protection Clause, it may violate Title VII.

The Fifth Circuit reversed the grant of summary judgment to the City on Equal Protection and Title VII challenges to the City’s race conscious hiring process that was created in order to comply with a 1980 consent decree drafted to end discriminatory hiring practices in the City’s fire department and to remedy the effects of past discrimination. The Fifth Circuit held that while the policy was not per se unconstitutional, on remand the district court should consider whether the consent decree and hiring procedures were still justified by a compelling government interest and whether they were narrowly tailored to further that interest. In addition, the Fifth Circuit held that, even if the hiring process does not violate the Equal Protection Clause, it does violate Title VII.

• Int’l Brotherhood of Elec. Workers v. Miss. Power & Light Co., 442 F.3d 313 (5th Cir. March 2, 2006)

In order to make a claim for disparate impact under Title VII, the plaintiff must prove that he proposed an acceptable alternative employment practice and the employer refused to adopt the alternative employment practice.

The Fifth Circuit reversed the judgment in favor of the plaintiffs who challenged the defendant’s method of determining eligibility for particular positions. The Fifth Circuit held that because the plaintiffs presented no evidence to establish that there were any acceptable alternative employment practices, the judgment of the district court should be reversed and judgment in favor of the defendant was entered.

• Pacheco v. Mineta, 448 F.3d 783 (5th Cir. May 5, 2006)

For purposes of exhaustion of remedies under Title VII, it is insufficient for a plaintiff to exhaust a disparate-treatment claim if the plaintiff ultimately attempts to bring a disparate-impact claim as well.

Pacheco filed an EEOC charge alleging that he was not promoted for racially discriminatory reasons. In his lawsuit, however, Pacheco also alleged that the hiring policy had a disparate impact on certain racial groups. The district court granted summary judgment against Pacheco on his disparate treatment claim and dismissed his disparate impact claim for want of jurisdiction because he failed to exhaust his administrative remedies with the EEOC. The Fifth Circuit affirmed.

• Loving v. Johnson, 455 F.3d 562 (5th Cir. July 7, 2006)

A prison inmate who works for the prison, either in or outside the prison, is not entitled to the legal minimum wage under the Fair Labor Standards Act (FLSA). If the prisoner works for a private firm, however, the prisoner is an FLSA employee of the private firm if he is working outside the prison, but is not an FLSA employee of the private firm if he is working in the prison.

• Gelin v. Hous. Auth. of New Orleans, 456 F.3d 525 (5th Cir. July 18 2006) and Barrow v. Greenville Ind. Sch. Dist., __ F.3d __ (5th Cir. February 26, 2007)

A public official is not a policymaker for a governmental entity, and thus able to make the governmental entity liable under Section 1983 for his actions, if the public official does not create the entity’s policies. If the public official’s discretionary decisions are constrained by policies not of the official’s making, those policies, rather than the decision-maker’s departure from them, are the act of the governmental entity. Moreover, if it is possible for another person to review the public official’s actions, whether by reversing the actions or terminating the public official’s employment, the public official cannot be a policymaker in regard to those actions.

Texas Supreme Court

• Matagorda County Hosp. Dist. v. Burwell, 189 S.W.3d 738 (Tex. February 24, 2006)

A statement in a personnel policy manual that “employees may be dismissed for cause” does not constitute an agreement that dismissal may be only for cause nor does it modify the at-will employment relationship.

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