CRST Van Expedited, Inc. v. EEOC: SCOTUS Grants Review of Case on EEOC Conciliation Requirements

On December 4, 2015, the Supreme Court of the United States granted review in CRST Van Expedited, Inc. v. EEOC, which raises the following issue:

Whether a dismissal of a Title VII case, based on the Equal Employment Opportunity Commission’s total failure to satisfy its pre-suit investigation, reasonable cause, and conciliation obligations, can form the basis of an attorney’s fee award to the defendant under 42 U.S.C. § 2000e-5(k).

The Court's web page for the case is here, and the SCOTUSblog page for it is here. FYI, SCOTUSblog is the world's best resource for all things SCOTUS.

Teamsters v. Washington Department of Corrections: Female Gender is a Bona Fide Occupational Qualification for Certain Correctional Officers in Female Prison

In Teamsters Local Union No. 114 v. Washington Department of Corrections, ___ F.3d ___ (9th Cir. 6/12/15), the Department of Corrections (DOC) designated a "limited number of female-only correctional positions—specifically, 110 positions to patrol housing units, prison grounds, and work sites." The local union for correctional officers sued the DOC under Title VII, alleging that its policy discriminated against male correctional officers. The district court granted summary judgment in favor of the State, the union appealed, and the Ninth Circuit affirmed, holding as follows:

While Title VII prohibits employment practices that discriminate on the basis of sex, a facially discriminatory employment practice is allowed if sex is a bona fide occupational qualification (BFOQ) for the position. 

To justify discrimination under the BFOQ exception, an employer must show, by a preponderance of the evidence, that: (1) the "job qualification justifying the discrimination is reasonably necessary to the essence of its business"; and (2) "sex is a legitimate proxy for determining" whether a correctional officer has the necessary job qualifications.

"Judgments by prison administrators that are the product of a reasoned decision-making process, based on available information and expertise, are entitled to some deference." The DOC in this case underwent an exhaustive process to determine that sex was a BFOQ for the positions at issue, and the DOC's judgment was entitled to deference.

Female gender was a BFOQ for the positions at issue. The DOC identified several reasons for placing only women into these positions: improving security, protecting inmate privacy, and preventing sexual assaults. Placing only women in these positions was reasonably necessary to the essence of prison administration. The employees' sex was a "legitimate proxy" for determining whether officers had the necessary job qualifications to meet these goals, and alternatives to the sex-based classification were "reasonably considered and refuted."

The opinion is available here. 

EEOC v. Abercrombie & Fitch: In Title VII Disparate Treatment Action, Job Applicant Need Not Show that Employer Actually Knew of Need for Accommodation or that Applicant Requested Accommodation

Title VII of the Civil Rights Act of 1964 prohibits a prospective employer from refusing to hire an applicant in order to avoid accommodating a religious practice that it could accommodate without undue hardship. The question presented is whether this prohibition applies only where an applicant has informed the employer of his need for an accommodation. 

EEOC v. Abercrombie & Fitch Stores, Inc. (6/1/15) ___ U.S. ___.

Samantha Elauf, a practicing Muslim who wears a headscarf for religious purposes, applied for a job at Abercrombie & Fitch (A&F). A&F staff assumed that Elauf wore the headscarf for religious purposes, but they did not know for sure and they did not ask. A&F rejected Elauf, believing her wearing a headscarf at work would violate its "Look Policy." 

The EEOC sued on Elauf's behalf, alleging that A&F violated Title VII. The trial court granted summary judgment for Elauf on liability, a jury awarded her damages, and the court entered judgment. The Tenth Circuit reversed, holding that A&F could not be liable because it did not know if Elauf actually needed a religious accommodation. 

The US Supreme Court granted certiorari and reversed the Tenth Circuit, holding that a plaintiff may prevail in a Title VII disparate treatment action without showing that the defendant had actual knowledge of his or her need for a religious accommodation. Instead, an employer may be liable "even if he has no more than an unsubstantiated suspicion that accommodation would be needed" and even if the applicant does not request religious accommodation.

The Court rejected the argument that a claim based on an applicant's religious practice must be raised as a disparate impact claim. "[R]eligious practice is one of the protected characteristics that cannot be accorded disparate treatment and must be accommodated."

An employer may be liable even if its policies treat religious practices no less favorably than similar secular practices. 

Title VII does not demand mere neutrality with regard to religious practices—that they be treated no worse than other practices. Rather, it gives them favored treatment, affirmatively obligating employers not “to fail or refuse to hire or discharge any individual . . . because of such individual’s” “religious observance and practice.” An employer is surely entitled to have, for example, a no-headwear policy as an ordinary matter. But when an applicant requires an accommodation as an “aspec[t] of religious . . . practice,” it is no response that the subsequent “fail[ure] . . . to hire” was due to an otherwise neutral policy. Title VII requires otherwise-neutral policies to give way to the need for an accommodation.

Justice Scalia wrote the opinion, with Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan joining. Justice Alito wrote a concurring opinion, and Justice Thomas dissented. The opinion is available here. 

Anderson v. City and County of San Francisco: Ninth Circuit Rules on "Bona Fide Occupational Qualification" Exemption to Title VII Prohibition on Sex Discrimination

In Anderson v. City and County of San Francisco, ___ F.3d ___, (9th Cir. 7/2/14), the Ninth Circuit considered the "bona fide occupational qualification" (BFOQ) exception to Title VII's prohibition of sex discrimination. 

Plaintiffs, current and former deputies of the San Francisco Sheriff’s Department (“SFSD”), appeal the district court’s order granting summary judgment to the City and County of San Francisco (the “County”) on their challenge to SFSD’s policy prohibiting male deputies from supervising female inmates in the housing units of SFSD’s jails. The district court concluded that SFSD’s policy did not violate Title VII’s prohibition on sex discrimination because it fell within the statute’s “bona fide occupational qualification” exception, 42 U.S.C. § 2000e-2(e)(1). We reverse the district court’s grant of summary judgment to the County on the sex discrimination claims and vacate the denial of summary judgment to plaintiffs on those claims.

Slip op. at 5. 

Title VII permits employers to discriminate on the basis of sex where sex is a BFOQ. 

To justify discrimination under the BFOQ exception, an employer must “prove by a preponderance of the evidence: 1) that the job qualification justifying the discrimination is reasonably necessary to the essence of its business; and 2) that [sex] is a legitimate proxy for the qualification because (a) it has a substantial basis for believing that all or nearly all [men] lack the qualification, or . . . (b) it is impossible or highly impractical . . . to insure by individual testing that its  employees will have the necessary qualifications for the job.”

Slip op. at 13. 

While judgments by prison administrators are entitled to some deference in court, such decisions must be based on a “reasoned decision-making process, based on available information and experience.” A material issue of genuine fact arose as to whether the Sheriff's decision here met that standard. Slip op. at 14-18. 

The County set forth four rationales to justify its sex-based policy: (1) protecting female inmates from sexual misconduct by male deputies; (2) maintaining jail security; (3) protecting inmate privacy; and (4) preserving the ability of female inmates to rehabilitate. 

Each such rationale related to a job qualification "reasonably necessary to the essence of" operating SFSD's jails: (1) not posing a threat to the safety of female inmates due to a likelihood of perpetrating sexual misconduct against them; (2) not posing a threat to jail security; (3) not posing a threat to female inmates’ privacy; and (4) not posing a threat to female inmates’ ability to rehabilitate. Each such rationale thus satisfied the first prong of the BFOQ exemption test. Slip op. at 18-19. 

To satisfy the second prong of the exemption, the County would have to show that excluding all male deputies is a “legitimate proxy” for excluding deputies who lack one of these four qualifications. The County could do so by showing that there is: (a) “a substantial basis for believing that all or nearly all [men] lack the qualification”; or (b) “it is impossible or highly impractical . . . to insure by individual testing” whether or not a male deputy has the qualification. The County did not do so on the record before the Court. Slip op. at 20-25. 

The opinion is available here. 

State of Arizona v. ASARCO: Court Reduces $300,000 Punitive Damage Award in Title VII Action

In State of Arizona v. ASARCO LLC (9th Cir. 10/24/13), the Ninth Circuit considered whether a $300,000 punitive damage award in a Title VII sexual harassment suit violated constitutional limits where the jury awarded no compensatory damages and only one dollar in nominal damages. 

Angela Aguilar worked for ASARCO at a copper mining and refining facility in Arizona. She alleged that two supervisors harassed her, and management failed to remedy the situation. At trial, the jury awarded her no compensatory damages, one dollar in nominal damages, and $868,750 in punitive damages. The district court reduced the punitive damages to $300,000, the statutory maximum under Title VII for an employer of ASARCO’s size. 42 U.S.C. § 1981a(b)(3)(D). 

The Court of Appeal reversed after examining the "guideposts" for determining excessiveness of a punitive damage award: (1) “the degree of reprehensibility of the defendant’s conduct”; (2) “[the] ratio to the actual harm inflicted on the plaintiff”; and (3) “civil or criminal penalties that could be imposed for comparable misconduct.” BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). 

First, the Court held that the district court did not err in finding that ASARCO's conduct was reprehensible and would support "a very large punitive award." Slip op. at 9-13. 

Second, the Court considered whether the punitive damage award bore "a reasonable relationship to compensatory damages." Slip op. at 13-16. The Court found that this requirement "suggested" that the damages should be reduced. Slip op. at 16. 

Third, the Court held that Title VII's $300,000 punitive damage cap is a "civil penalty" that gives defendants "fair notice . . . of the severity of the penalty that a State may impose" and supports a $300,000 punitive damage award. Slip op. at 16-17. 

The Court concluded that the Constitution did not bar the imposition of a "substantial punitive award," but that the 300,000 to one ratio was excessive. Slip op. at 18-20. Finding no discrimination case upholding a ratio greater than 125,000 to one, the Court held that $125,000 was the highest award that would maintain a "reasonable relationship" between compensatory and punitive damages.  Slip op. at 20. 

The Court remanded and ordered that the district court could order a new trial unless the plaintiff accepts a remittitur to this level. 

The opinion is available here. 

Dukes v. WalMart: On Remand from Supreme Court, District Court Denies Certification of Scaled-Down Gender Discrimination Class

Betty Dukes and others sued Wal-Mart in 2001, alleging that it discriminated against its female retail store employees in promotion and pay decisions, in violation of Title VII. In 2004, District Judge Martin Jenkins certified a nation-wide class of all women employed by Wal-Mart in its retail stores who were or may have been subjected to the alleged discriminatory pay and management track promotions policies and practices. Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137 (N.D.Cal.2004) slip op. at 84 (available here).

After the Ninth Circuit largely affirmed, Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (2010), the Supreme Court reversed, Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011) (discussed here), holding, inter alia, that the plaintiffs failed to identify a common question, the resolution of which would help resolve their discrimination claims.

On remand, the plaintiffs have sought certification of a number of smaller-scale class actions across the country. In the Northern District of California, where the court originally certified the nation-wide class, the plaintiffs asked the court to certify a class covering approximately 250 stores and 150,000 female employees in the "California regions."

On August 2, District Judge Charles R. Breyer denied certification, finding that the plaintiffs' certification effort failed in two fundamental respects:

First, though they have cut down the raw number of proposed class members significantly, Plaintiffs continue to challenge four different kinds of decisions across hundreds of decision makers, inviting failures of proof at multiple points in each region. Second, though Plaintiffs insist that they have presented an entirely different case from the one the Supreme Court rejected, in fact it is essentially a scaled-down version of the same case with new labels on old arguments.

Slip op. at 2. 

On the disparate treatment claim, the court held that the plaintiffs failed to introduce "significant proof that Wal-Mart operated under a general policy of discrimination," as required by the Supreme Court. While the plaintiffs' statistical evidence constituted "some evidence in support of their claim," they failed to identify "statistically significant disparities in even a majority of the relevant decision units in any region across the challenged pay and promotion decisions." Slip op. at 6-7. Evidence that Wal-Mart's CEO made gender-biased statements in 2004 was ambiguous and did little to meet the required showing. Slip op. at 8-9. Though the plaintiffs "succeeded in illustrating attitudes of gender bias held by managers at Wal-Mart," this evidence also failed to meet the test announced by the Supreme Court. Slip op. at 9-11. Finally, anecdotal evidence from 86 people in a putative class of 150,000 did not "meaningfully improve" the plaintiffs' showing. Slip op. at 11-12.  

On the disparate impact claim, the court held that each of the "specific employment practices" identified by the plaintiffs as "guiding local managers' discretion" and being "responsible for the promotion and pay disparities" either: (1) "did not actually apply across the proposed class for the proposed class period," or (2) boiled down to "delegating discretion, which the Supreme Court held could not provide the commonality necessary to certify a class." Slip op. at 12-16. The court held that the plaintiffs failed to demonstrate class-wide practices of: requiring candidates for promotion to relocate; failing to post job openings; or promoting from within. Slip op. at 13-14. Finally, the court held that evidence that Wal-Mart used common subjective criteria to select candidates for promotion and enumerated criteria that managers were to consider in making pay decisions simply challenged "Wal-Mart’s practice of delegating discretion to local managers, which the Supreme Court specifically held was not a specific employment practice supplying a common question sufficient to certify a class."  Slip op. at 14-16.  

The court ended by stating that the plaintiffs would have been better off identifying an employment practice and building a class around it, rather than continuing "to challenge the discretionary decisions of hundreds of decision makers, while arbitrarily confining their proposed class to corporate regions that include stores in California, among other states." Slip op. at 17.  

University of Texas Southwestern Medical Center v. Nassar: Supreme Court Requires "But-For" Causation In Title VII Retaliation Actions

In University of Texas Southwestern Medical Center v. Nassar, ___ U.S. ___ (6/24/13), the Supreme Court considered the plaintiff's burden of proof in a Title VII retaliation action. In an opinion written by Justice Kennedy, with Chief Justice Roberts and Justices Scalia, Thomas, and Alito joining, the Court began with the premise that "causation in fact—i.e., proof that the defendant's conduct did in fact cause the plaintiff's injury—is a standard requirement of any tort claim." 

The Court then reviewed the history of Title VII's enactment in 1964, its amendment in 1991, the cases on the proof required in Title VII discrimination and retaliation claims, and its decision in Gross v. FBL Financial Services, Inc., 557 U. S. 167 (2009), which required the plaintiff to demonstrate but-for causation in an action under the Age Discrimination in Employment Act (ADEA). 

The Court then held that Title VII's anti-retaliation provision, like the ADEA, requires proof of but-for causation: 

[Title VII] like the [ADEA], makes it unlawful for an employer to take adverse employment action against an employee "because" of certain criteria. Cf. 29 U. S. C. §623(a)(1). Given the lack of any meaningful textual difference between the text in this statute and the one in Gross, the proper conclusion here, as in Gross, is that Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the challenged employment action.  

The Court rejected the argument that the "motivating factor" standard, which applies in Title VII discrimination cases, should apply equally in Title VII retaliation cases:

It must be acknowledged that because Title VII defines "unlawful employment practice" to include retaliation, the question presented by this case would be different if §2000e-2(m) extended its coverage to all unlawful employment practices. As actually written, however, the text of the motivating-factor provision, while it begins by referring to "unlawful employment practices," then proceeds to address only five of the seven prohibited discriminatory actions—actions based on the employee's status, i.e., race, color, religion, sex, and national origin. This indicates Congress' intent to confine that provision's coverage to only those types of employment practices. The text of §2000e-2(m) says nothing about retaliation claims. Given this clear language, it would be improper to conclude that what Congress omitted from the statute is nevertheless within its scope.

The Court then made a number of public policy arguments for adopting the more narrow but-for causation standard, including noting that retaliation claims "are being made with ever-increasing frequency" and that the lower standard "could also contribute to the filing of frivolous claims."

Finally, the Court considered the EEOC's "long-standing agency views" that the motivating-factor standard should apply. The Court held that the EEOC's views "lack the persuasive force that is a necessary precondition to deference" under Skidmore v. Swift & Co., 323 U. S. 134 (1944).  

The dissent, written by Justice Ginsburg and joined by Justices Breyer, Sotomayor, and Kagan, argues for a number of textual and public policy reasons that the Court should apply a motivating factor standard to retaliation cases. The dissent concludes: 

The Court holds, at odds with a solid line of decisions recognizing that retaliation is inextricably bound up with status-based discrimination, that §2000e-2(m) excludes retaliation claims. It then reaches outside of Title VII to arrive at an interpretation of "because" that lacks sensitivity to the realities of life at work. In this endeavor, the Court is guided neither by precedent, nor by the aims of legislators who formulated and amended Title VII. Indeed, the Court appears driven by a zeal to reduce the number of retaliation claims filed against employers. See ante, at 18-19. Congress had no such goal in mind when it added §2000e-2(m) to Title VII. See House Report Part II, at 2. Today's misguided judgment, along with the judgment in Vance v. Ball State Univ., post,p. 1, should prompt yet another Civil Rights Restoration Act.

I think it goes without saying that Congress is not likely to pass any such legislation any time in the near future.  

University of Texas Southwestern Medical Center v. Nassar is here. The SCOTUSblog page for it is here.  

Vance v. Ball State University: Supreme Court Limits Employer Liability In Title VII Actions

In Vance v. Ball State University ___ U. S. ___ (6/24/13) the Supreme Court considered who qualifies as a “supervisor” for purposes of establishing vicarious liability in a Title VII discrimination and harassment action. Here is the case in a nutshell, taken from the majority opinion written by Justice Alito (joined by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas): 

In this case, we decide a question left open in Burlington Industries, Inc. v. Ellerth, 524 U. S. 742 (1998), and Faragher v. Boca Raton, 524 U. S. 775 (1998), namely, who qualifies as a "supervisor" in a case in which an employee asserts a Title VII claim for workplace harassment? 

Under Title VII, an employer's liability for such harassment may depend on the status of the harasser. If the harassing employee is the victim's co-worker, the employer is liable only if it was negligent in controlling working conditions. In cases in which the harasser is a "supervisor," however, different rules apply. If the supervisor's harassment culminates in a tangible employment action, the employer is strictly liable. But if no tangible employment action is taken, the employer may escape liability by establishing, as an affirmative defense, that (1) the employer exercised reasonable care to prevent and correct any harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided. Id., at 807; Ellerth, supra, at 765. Under this framework, therefore, it matters whether a harasser is a "supervisor" or simply a co-worker. 

We hold that an employee is a "supervisor" for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.... 

Slip op. at 1-2.  

What does it mean to be "empowered by the employer to take tangible employment actions against the victim"?  Funny you should ask.  

Citing Ellerth, the Court held that one is so empowered when one may effect a "significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits." Slip op. at 9. The Court rejected the position adopted by the EEOC and several lower courts that a supervisor is one with the ability to "exercise significant direction over another's daily work." Ibid.  

Writing in dissent, Justice Ginsburg (joined by Justices Breyer, Sotomayor, and Kagan) argued that the Court should follow the approach adopted by the EEOC after Ellerth and Faragher that a supervisor is either: (1) an individual authorized "to undertake or recommend tangible employment decisions affecting the employee," including "hiring, firing, promoting, demoting, and reassigning the employee"; or (2) an individual authorized "to direct the employee's daily work activities."  

The opinion is available here.  

University of Texas Southwestern Medical Center v. Nassar: SCOTUS to Consider "But For" and "Mixed Motive" Causation in Title VII Retaliation Action

In Nassar v. University of Texas Southwestern Medical Center, 674 F.3d 448 (5th Cir., 2012) (available here), the Fifth Circuit Court of Appeals held that the plaintiff in a Title VII retaliation action need not prove that discriminatory animus was the sole cause of an adverse employment action, but could prevail on evidence that his race was "a motivating factor."  

The Supreme Court of the United States granted certiorari on January 18, 2013, sub nom University of Texas Southwestern Medical Center v. Nassar (Case No. 12-484).  The petitioner framed the issue as follows in its petition for review:  

Whether the retaliation provision of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), and similarly worded statutes require a plaintiff to prove but-for causation (i.e., that an employer would not have taken an adverse employment action but for an improper motive), or instead require only proof that the employer had a mixed motive (i.e., that an improper motive was one of multiple reasons for the employment action).  

The Court has not yet set oral argument.  I assume it will hear Nassar in April.  The Supreme Court's web page for the case is here, and SCOTUSblog has a page here.  

Nassar of course brings to mind the pending California Supreme Court case of Harris v. City of Santa Monica.  Like Harris, I have added Nassar to our Watch List, and we (the State Bar of California Labor and Employment Law Section) will present a webinar on it within two weeks of the decision being issued.  

As always, stay tuned.  

Vance v. Ball State University: SCOTUS Hears Oral Argument in Title VII Supervisor Liability Action

On November 26, 2012, the Supreme Court of the United States heard oral argument in Vance v. Ball State University (Case No. 11-556). The question in Vance is whether, "as the Second, Fourth, and Ninth Circuits have held, the Faragher and Ellerth 'supervisor' liability rule (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim’s daily work, or, as the First, Seventh, and Eighth Circuits have held (ii) is limited to those harassers who have the power to 'hire, fire, demote, promote, transfer, or discipline' their victim."

The transcript is here. SCOTUSblog reported on oral argument here. SCOTUSblog concludes that the Court may DIG the case (deny certiorari as improvidently granted) because the plaintiff could not show under either test that the alleged harasser was her supervisor.  

Vance v. Ball State University: US Supreme Court to Determine Scope of Title VII Supervisor Liability

On June 25, 2012, the Supreme Court of the United States granted certiorari in Vance v. Ball State University (Case No. 11-556) to decide the following issue:

In Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), this Court held that under Title VII, an employer is vicariously liable for severe or pervasive workplace harassment by a supervisor of the victim. If the harasser was the victim’s co-employee, however, the employer is not liable absent proof of negligence. In the decision below, the Seventh Circuit held that actionable harassment by a person whom the employer deemed a “supervisor” and who had the authority to direct and oversee the victim’s daily work could not give rise to vicarious liability because the harasser did not also have the power to take formal employment actions against her. 

The question presented is: Whether, as the Second, Fourth, and Ninth Circuits have held, the Faragher and Ellerth “supervisor” liability rule (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim’s daily work, or, as the First, Seventh, and Eighth Circuits have held (ii) is limited to those harassers who have the power to “hire, fire, demote, promote, transfer, or discipline” their victim.

The Court will hear the case in the term that begins in October, 2012, and we can expect a ruling by the end of June, 2013. The Court's docket is here.

Joaquin v. City of Los Angeles: Court of Appeal Issues Retaliation Decision

Joaquin v. City of Los Angeles (1/23/12) --- Cal.App.4th ----, 2012 WL 171723, concerns a difficult area of discrimination, harassment, and retaliation law: Balancing the rights of employees who have suffered harassment, discrimination, or other unlawful conduct, against the rights of those who are subjected to false allegations of such conduct, and the rights of employers who may have to decide who's telling the truth.

Richard Joaquin was a police officer who complained of sexual harassment by a superior officer, Sands. The Department investigated and found Joaquin's complaint unfounded. After a seven day hearing, a Board of Rights found Joaquin guilty of retaliating against Sands by filing a false complaint of harassment. The Board recommended Joaquin be terminated, and the Department accepted the recommendation.

Joaquin filed a petition for writ of mandate. The Superior Court concluded that the Board of Rights' findings were not supported by the weight of the evidence, granted the petition, and ordered Joaquin reinstated. Interestingly, the court found:

The uncontradicted evidence is that some or all of the events reported by Joaquin actually occurred. Joaquin provided a detailed and consistent account of conduct which made him feel uncomfortable or offended. In the face of these allegations, Sands did not completely deny the shooting range [fn. omitted] or weight room incidents, or calling the front desk. He had a different explanation for the field impound location and Olympics incidents, but again did not deny that they occurred. He was contradicted on the basketball game incident, for he contended he was a member of the team long before Joaquin when Joaquin started the team and had always been one of the two coaches.

Slip op. at 5.

Joaquin then sued the City of Los Angeles, alleging that the City terminated him in retaliation for filing his sexual harassment complaint in violation of the Fair Employment and Housing Act (FEHA). The jury found that Joaquin's complaint of sexual harassment was a motivating reason for the termination and awarded him more than $2 million for lost wages and emotional distress. The City appealed, and the Court reversed, holding that Joaquin "did not present substantial evidence that his termination was motivated by retaliatory animus, a necessary element of his claim." Slip op. at 1.

After a lengthy recitation of the facts, the Court found that Joaquin had established a prima facie case of retaliation, and that the City had articulated a legitimate, nonretaliatory reason for the termination.  Slip op. at 8.  Relying on cases interpreting Title VII and another state's laws, the Court held:  

[I]n appropriate circumstances, an employer may discipline or terminate an employee for making false charges, even where the subject matter of those charges is an allegation of sexual harassment. In such a case, the disciplinary action is subject to the burden-shifting analysis articulated by the United States Supreme Court in McDonnell Douglas Corp. v. Green, supra, 411 U.S. 729, and adopted by our Supreme Court in Yanowitz v. L'Oreal USA, Inc., supra, 36 Cal.4th 1028, 1042, and other cases. Under that analysis, the ultimate question for the fact finder is whether the employer's stated reason for discipline (i.e., that the employee was untruthful during an investigation) was pretextual or whether there is other evidence that, “as a whole supports a reasoned inference that the challenged action was the product of discriminatory or retaliatory animus.”  

Slip op. at 12.  Perhaps more importantly, the Court held that an employer in such a situation need not prove "more than its good faith belief that a false statement was knowingly made..."  Slip op. at 11.  

[The] employer can lawfully act on a level of certainty that might not be enough in a court of law. In the workaday world, not every personnel decision involving a false statement (or a cover-up) has to be treated as something like a trial for perjury. Therefore, an employer, in these situations, is entitled to rely on its good faith belief about falsity, concealment, and so forth.

Ibid.  The Court then held that Joaquin failed to introduce substantial evidence of retaliatory animus.  Slip op. at 12.  Although Joaquin alleged that Sands wanted Joaquin disciplined for having made a sexual harassment complaint, he apparently did not argue the cat's paw theory of liability (see Staub v. Proctor Hospital, 562 U.S. ___, 131 S.Ct. 1186 (2011)), and the Court found that Sands' animus, if any, was irrelevant to the Board's recommendation and the Department's decision.  Slip op. at 12-13.  The Court dealt similarly with the other evidence relied on by Joaquin.  Slip op. at 13-14.  

Finally, the Court held that CACI 2505 fails to set forth the retaliatory animus factor and urged the Judicial Council to revise the instruction and verdict form "to clearly state that retaliatory intent is a necessary element of a retaliation claim under FEHA."  Slip op. at 15.  

Some have expressed concern that Joaquin would allow unscrupulous employers to conduct sham investigations, find that the complaints are false, and fire the complaining employees. Yet California law still protects employees who may good faith, but mistaken complaints of illegal conduct. See, e.g., Barbosa v. IMPCO Technologies, Inc. (2009) 179 Cal.App.4th 1116 (blogged here). Some have suggested that the key distinction between Joaquin and the typical retaliation case is the Board of Rights’ finding that Joaquin intentionally fabricated his complaints, but I do not know that trial courts will apply such a distinction. I assume that Joaquin will petition for review, and others will petition for depublication, but I have little doubt that we will see more cases dealing with these issues.  

The opinion is available here.

Ellis v. Costco: On Remand Following Dukes, Ninth Circuit Vacates Order Granting Certification in Discrimination Action

The theory of liability in Dukes v. Wal-Mart (discussed here) is that a company's policy of allowing local decision-makers to make hiring and promotion decisions can have a disparate impact on women and violate Title VII.  Brad Seligman, lead counsel for the plaintiffs in Dukes, has said that this is a very narrow and rarely used theory.  Regardless, the same theory is at issue in another of Seligman's cases, Ellis v. Costco Wholesale Corporation, 657 F.3d 970 (9th Cir. 9/16/11). 


On remand following the SCOTUS decision in Wal-Mart, the Ninth Circuit vacated the district court's order granting class certification under Federal Rules 23(b)(2) and 23(b)(3).  The Court held as follows:

1. Because at least one named plaintiff (Sasaki) alleged a concrete injury that is both directly traceable to Costco's allegedly discriminatory practices and is redressable by both injunctive relief and monetary damages, the Court affirmed the district court's holding that she had standing to pursue the action.
2. The Court  vacated and remanded the district court's ruling as to commonality under Rule 23(a) because the district court failed to conduct the required “rigorous analysis” to determine whether there were common questions of law or fact among the class members' claims and instead relied on the admissibility of the plaintiffs' evidence to reach its conclusion on commonality.
3. The Court vacated the district court's ruling as to typicality under Rule 23(a) because the district court failed to consider the effect that defenses unique to the named Plaintiffs' claims have on that question. 
4. The Court affirmed the district court's ruling that Sasaki, a current employee who continues to be denied promotion, has incentive to vigorously pursue injunctive relief as well as monetary damages on behalf of all the class members and is an adequate class representative under Rule 23(a).  However, the Court vacated the district court's finding that the other named plaintiffs, as former employees with "no incentive" to pursue injunctive relief, could adequately represent the class. 
5. In light of Wal-Mart's rejection of the predominance test under Rule 23(b)(2), the Court vacated the district court's certification of the class under that Rule and remanded for the district court to consider whether the claims for various forms of monetary relief will require individual determinations and are therefore only appropriate for a Rule 23(b)(3) class. 

The opinion is available here.