Allyn & Fortuna LLP
Paula Lopez, May 28, 2014.
On April 22, 2014, the Court of Appeals for the Sixth Circuit, in EEOC v. Ford Motor Co., rejected Ford’s position that its employee’s presence at the workplace is necessary to perform her essential job functions and found that Ford failed to establish that telecommuting, in this instance, would impose an undue hardship on an employer obligated to provide a reasonable accommodation under the Americans with Disabilities Act (ADA). In doing so, the Sixth Circuit upended the typical deference given to an employer’s business judgment regarding the essential functions of a job.
Title I of the ADA requires employers to provide reasonable accommodations to qualified employees with a disability, so long as such accommodation does not impose an undue hardship on the employer. A reasonable accommodation is a modification to the workplace or job function that enables a disabled employee to perform the essential job requirements. In an action brought against an employer as a result of a denial of a request for an accommodation, the employee bears the burden of establishing that he or she is (1) disabled and (2) “otherwise qualified” for the position. An employee is “otherwise qualified” despite disability if it can be shown that the employee has the requisite knowledge, skill and experience to perform the essential job functions. If an employee can demonstrate the need for the requested accommodation and that he or she can still perform the job, an employer can lawfully deny a requested accommodation if it imposes an undue hardship on the employer’s business. The ADA has identified the following factors as relevant in determining whether an accommodation imposes an undue hardship on an employer: (1) “nature and cost of the accommodation”; (2) overall financial condition and number of persons employed at the employer’s affected facility; (3) overall financial resources and size of the employer entity; and (4) the employer’s type of operation taking into account the “structure and functions of [its] workforce.”
Ford involves the case of Jane Harris, a Ford employee holding the position of resale steel buyer. Ms. Harris suffers from irritable bowel syndrome and when her symptoms are aggravated, she suffers from incontinence. Harris requested permission to telecommute up to four days a week on an as needed basis, depending on the severity of her symptoms. After considering the request and determining that telecommuting was not appropriate for her position, Ford suggested alternative proposed accommodations, which Harris rejected as not adequately addressing her disability. Ultimately Ford terminated Harris because it determined that her presence in the workplace was necessary for her to perform essential job duties, which require steel resale buyers to “work as part of a team.” The EEOC sued Ford for failure to accommodate Harris’ disability and for retaliation, claiming she was fired as a result of filing a charge with the EEOC. The District Court dismissed the EEOC’s action, finding that attendance in the workplace is a basic job requirement, the absence of which renders an employee unqualified, and deferred to Ford’s business judgment as to what constitute essential job functions.
On appeal, the Sixth Circuit reversed the dismissal of the action. In doing so, the circuit court considered Ford’s assertion that it is within its business judgment that a resale steel buyer’s physical presence in the workplace is necessary to perform essential job functions requiring group interaction and group problem solving. However, the circuit court was not persuaded by Ford’s reasoning in this regard, finding that current technology minimizes the need for in-person contact to accomplish group interactions. The court went on to consider whether in-person interaction was essential in light of plaintiff’s actual prior work experience and noted that plaintiff regularly communicated with internal and external “stakeholders” via conference call. In addition, the court noted that Ford maintains an established telecommuting policy and has extended telecommuting options to other steel resale buyers under limited bases, undermining its argument that workplace presence is necessary for Ms. Harris to perform her essential job functions.
In reviewing the district court’s holding that Ms. Harris’s requested accommodation was unreasonable, the circuit court noted prior precedent holding that telecommuting does not constitute a reasonable accommodation and brought into question the continued applicability of such holdings in light of current technology. The court recognized that technical advancements have re-defined the “workplace” as no longer being the employer’s place of business but anywhere the employee can perform his/her job functions. In addition, the court reiterated an employer’s obligation to engage in an interactive process with an employee in order to identify reasonable alternatives to a requested accommodation rather than to outright reject a requested accommodation for being unreasonable.
For the same reasons that the circuit court determined that Ms. Harris’s request for telecommuting as an accommodation for her disability is reasonable, the court found that Ford failed to meet its burden of proving an undue hardship. In addition, the court pointed to the size of the company, its financial resources, and its already existing written policy allowing for telecommuting in some instances and agreeing to pay for the cost of implementing such approved arrangement.
The Sixth Circuit’s decision is in-line with existing EEOC guidelines requiring an employer to modify its policy of where work is to be performed, if the modification is needed as a reasonable accommodation and does not impose an undue hardship. While it will now be left to a jury to determine whether Ms. Harris’s request for a telecommuting accommodation is reasonable, as a result of the Sixth Circuit’s decision, telecommuting, previously not considered a reasonable accommodation except in the rarest circumstances, is now a viable accommodation that employers must carefully consider if requested by a disabled employee, or otherwise risk exposing themselves to liability under the ADA.
Megan J. Muoio, May 21, 2014.
Recent Supreme Court decisions and federal legislation have addressed the issue of when it is appropriate for employees to discuss pay and salary issues amongst themselves and what options, if any, do employers have to prevent disclosures made among employees. Many employers discourage or outright prohibit employees from disclosing or discussing pay and salary information. These prohibitions are often contained within employment handbooks or simply conveyed verbally to employees. However, despite their frequent use, pay and salary confidentiality rules have been prohibited by the National Labor Relations Board and the federal courts in nearly every circumstance.
The National Labor Relations Act prohibits unfair labor practices, which are practices that have an effect on the substantive rights of employees to self-organize and “engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a) of the NLRA prohibits unfair labor practices on the part of employers, regardless of whether their employees are unionized.
If an employee who has been subject to an adverse employment action as a result of pay or salary disclosure brings a complaint against his employer to the NLRB, the NLRB will first seek to establish whether the employee is subject to protection under the NLRA. The NLRB has determined that employees who discuss their salary and pay information are eligible for protection under the NLRA because pay and salary discussion can be classified as concerted activity and because the discussion is for the employees’ mutual aid and protection. The NLRB and the federal courts have held that discussion of pay disparities between employees can be the “grist on which concerted activity feeds” and such discussion can provide the basis for concerted employee action.
The employer will then have an opportunity to advance a legitimate and substantial business justification for limiting the employee’s rights to disclose wage and compensation information. There have only been a few legitimate business justifications accepted by the NLRB over the years. One such justification is when the wage information complied and kept as confidential information by the employer. For example, in an action before the NLRB, an employee of IBM had been terminated for distributing wage information to other employees. The wage information had been centralized by the employer and was classified as confidential. The employee had signed an agreement upon hiring that required him to agree not to disclose information that IBM had classified as confidential. The NLRB found that IBM had a legitimate business justification for the termination of the employee and that the employee was not entitled to protection under the NLRA. Had the employee simply discussed his own salary or pay information with another employee for the purposes permitted under the act, he would have been granted the protection of the NLRA.
This issue has received recent national attention, with President Obama signing an Executive Order on April 8, 2014, prohibiting government officers and contractors from retaliating against employees who disclose compensation information. The stated purpose of the Executive Order is to make as much salary and pay information available in an effort to make Federal contracting more efficient, and to enable the discussion of unlawful discriminatory labor practices so that compensation discrimination is discovered and remediated.
With the NLRB’s clear prohibition of pay and salary non-disclosure provisions and the Federal government’s current involvement in this area, why do employers still continue to use such provisions, either formally in their employee handbooks and manuals or informally? Perhaps it is because the NLRB complaint procedure is arduous for employees and may deter the filing of a substantial number of claims. Further, if the Board finds in favor of an employee, it can only order reinstatement and limited back pay, but the employee cannot recover additional damages. In addition, although an effort to strengthen the reach of the NLRB in this area has been made in recent years, possible legislative efforts such as the Paycheck Fairness Act have been defeated. Private sector employers who fear the ramifications of the widespread disclosure of pay and salary information may take the risk of adverse action and elect to continue to prohibit disclosure in their formal employment policies if they determine the benefits of such a prohibition outweigh the risk of rehiring a terminated employee and paying limited back pay as a result of the filing of a complaint with the NLRB.
Diana Uhimov, May 15, 2014.
Starting on June 2, 2014, businesses will have the option to choose an accelerated procedure for dispute resolution in New York’s Commercial Division. The new rule, Rule 9 of section 202.70(g) of the Rules of Practice for the Commercial Division, authorizes the court to apply the accelerated adjudication procedures with the parties’ express consent in writing. While new Rule 9 provides a prompt and efficient alternative to the choice between arbitration and prolonged litigation, it also curtails the scope of discovery and time to be ready for trial, and deems some significant rights to be waived.
All Commercial Division actions, except for class actions, qualify for the accelerated procedures. The new accelerated procedures can be adopted by contract or the filing of a stipulation adopting the rules. Parties are free to negotiate their own contract language to impose limitations on the accelerated process. Alternatively, the new rule provides a proposed provision that parties may insert into their contracts:
Subject to the requirements for a case to be heard in the Commercial Division, the parties agree to submit to the exclusive jurisdiction of the Commercial Division, New York State Supreme Court, and to the application of the Court’s accelerated procedures, in connection with any dispute, claim or controversy arising out of or relating to this agreement, or the breach, termination, enforcement or validity thereof.
Rule 9’s streamlined process requires that all pre-trial proceedings, including all discovery, pre-trial motions and mandatory mediation, must be completed and the parties ready for trial within nine months from the date of filing of a Request of Judicial Intervention (RJI). The rule is silent, however, on a time frame for holding the trial.
Under the new rule, discovery is limited to seven interrogatories, five requests to admit, and seven depositions per side, unless the parties come to a different agreement with respect to discovery. Further, document requests must be “restricted in terms of time frame, subject matter and persons or entities to which the requests pertain”. Electronic discovery must be “narrowly tailored to include only those individuals whose documents are reasonably expected to contain evidence that is material to the dispute.” The court may also deny requests where the costs and burdens of e-discovery are disproportionate to the amount at issue or to the relevance of the materials requested, or order the requesting party to shoulder the costs.
Parties to an accelerated action waive the following rights:
- Any objections based on lack of personal jurisdiction or forum non conveniens;
- The right to a jury trial
- The right to recover punitive or exemplary damages; and
- The right to interlocutory appeal.
These rights can have a substantial impact on the outcome of the dispute. Personal jurisdiction can normally be challenged on the basis that the party does not have “sufficient minimal contacts” with the state and, as a result, the court’s rulings cannot be enforced upon that party. Additionally, defendants in non-accelerated litigation may move to dismiss an action on the ground of forum non conveniens, which means that although the plaintiff properly invoked the jurisdiction of the court, it is inconvenient for the court and the defendant to have a trial in the original jurisdiction. In a jury trial, a jury of peers makes the decision, whereas in a bench trial, a judge or panel of judges makes all decisions. Many believe that a jury is likely to provide a more sympathetic or fair hearing, but this is debatable. Punitive damages—awarded only in special cases—are intended to deter the conduct that is the basis of the lawsuit, and are often imposed where compensatory damages are deemed inadequate. Finally, waiver of the right to interlocutory appeal precludes, for example, appeals from the denial of a motion to dismiss, a temporary restraining order, preliminary injunction, or other interim relief.
Businesses should determine whether to select the accelerated adjudication procedure based on the types of disputes that are foreseeable in connection with a particular contract. A party that anticipates being a plaintiff is likely to benefit from the accelerated procedure if, for example, it is a lender that seeks prompt collection from a delinquent borrower. On the other hand, in matters where a jury trial or the threat of punitive damages would be effective, a plaintiff would not want the accelerated procedure. Likely defendants must weigh the advantages of limited discovery and no punitive damages against the disadvantages of waiving the right to certain objections and interlocutory appeals.
Regardless of what side of the conflict an entity may find itself on, all companies should exercise caution in reviewing contracts, since language regarding accelerated procedures may subject parties to the new Rule 9 process, which eliminates several important procedural rights. Including an accelerated adjudication clause merits serious consideration when entering into a contract that establishes New York state court as the forum for dispute resolution.
Paula Lopez, May 8, 2014.
As the trend of e-commerce and the offer of goods and services through websites and mobile applications have increased, the Department of Justice (DOJ) has stepped up enforcement under the Americans with Disabilities Act (ADA) to ensure that individuals with disabilities have equal access to sites offering such goods and services online.
Title III of the ADA prohibits places of public accommodation from discriminating against disabled individuals with respect to access to goods, services, programs, and facilities offered by such public accommodations. The ADA further requires, with limited exceptions, places of public accommodations to make reasonable accommodations so that disabled individuals may have equal access to such goods and services.
The ADA identifies 12 categories of private entities that qualify as public accommodations: (1) places of lodging (hotels/inns/motels); (2) establishments serving food or drink (restaurants/bars); (3) places of exhibition or entertainment (movie theaters, concert halls, stadiums); (4) places of public gathering (convention centers/auditoriums); (5) sales or rental establishments (retail stores/grocery stores/shopping centers); (6) service establishments (banks/dry cleaners/laundromats/travel services/pharmacies/doctor’s offices/hospitals); (7) stations used for specified public transportation (terminals/depots); (8) places of public display or collection (museums/libraries); (9) places of recreation (park/zoo/amusement park); (10) places of education (grade school/high school/undergraduate/ post graduate schools); (11) social service center establishment (day care facility/senior center/homeless shelter/food bank); and (12) places of exercise or recreation (gymnasium/health spa/bowling alley/golf course).
When Title III of the ADA was enacted, places of public accommodations were brick-and-mortar structures and did not exist on the internet. Since 1990, many of the enumerated places of public accommodations have turned to offering their goods and services via the internet through websites designed for online shopping, banking, travel booking and video streaming. Individuals can even obtain educational degrees and certifications online as well as file their taxes and complete stock trades. While the ADA has not been amended to require website accessibility or implement technical standards, Title III has been held to require non-discrimination by places of public accommodations in the offering of all goods and services, including those offered on their websites.
The concept of “cyber accessibility” is not novel. The World Wide Web Consortium (W3C) publishes website content accessibility guidelines (WCAG) 2.0, which when implemented make websites accessible through the use of screen reader software. Such software works by converting website text to an audio format by reading the display screens and guiding a blind or visually impaired internet user through the site’s prompts. While WCAG 2.0 has not been formally adopted by the DOJ, it is used by the Federal government and private sector entities in making their websites accessible to individuals with disabilities. In addition, the DOJ has required compliance with WCAG 2.0 as part of a rising number of enforcement actions targeting non-ADA compliant websites.
Some notable DOJ settlements addressing the accessibility of websites have been entered into with Hilton Worldwide, Inc., Charles Schwab and most recently, H&R Block. The H&R Block lawsuit was initially filed by the National Federation of the Blind of Massachusetts and two of its members. The DOJ then filed a motion to intervene on the ground that it has a significant protectable interest in enforcing the ADA. The claims related to accessibility issues with www.hrblock.com website that prevented blind and/or visually impaired individuals from accessing all the benefits offered by the site, namely the ability to prepare and e-file their taxes. In March, H&R Block entered into a consent decree with the DOJ that also settled the private lawsuit.
The consent decree is valid for a term of 5 years and requires H&R Block to, among other things,
- comply with a timeline for bringing its website, online tax preparation products, and mobile applications into compliance with the WCAG 2.0 AA success criteria;
- designate a web accessibility coordinator; implement a web accessibility policy;
- appoint a web accessibility committee to monitor the website, online tax preparation products and mobile application’s compliance with WCAG 2.0 AA;
- train its customer service representatives to escalate calls from users with disabilities having problems using the website or online tax preparation products;
- provide annual mandatory web accessibility training to web content personnel;
- select an automated accessibility testing tool, approved by the private plaintiffs and the U.S., to evaluate conformance of web content with WCAG 2.0 AA;
- retain an independent web accessibility consultant, approved by the private parties and the U.S., to provide an annual evaluation of the website’s, online tax preparation tool’s and the mobile application’s conformance with WCAG 2.0 AA and implement any recommendations from the consultant within specified time periods; and
- comply with periodic reporting requirements.
As part of the settlement, H&R Block also agreed to pay each of the plaintiffs $22,500.00 and was assessed a civil penalty, payable to the DOJ, in the sum of $55,000.00.
The civil penalties under Title III have since been amended and the maximum civil penalty for such violations occurring on or after April 28, 2014 have increased to $75,000 from $55,000 for first offenses and to $150,000 from $110,000 for a second violation. This can have a significant effect on small businesses operating online in light of the DOJ’s recent focus on the accessibility of websites by individuals with disabilities and willingness to either initiate enforcement actions and/or intervene in private lawsuits brought under Title III. Therefore, even in the absence of an amendment to the ADA or the adoption of web accessibility guidelines by the DOJ, it is important for businesses to audit their websites and mobile applications to ensure that they are compliant with Title III if they offer goods and services.
Nicholas Fortuna, April 29, 2014.
On April 22, 2014, in the case Schuette v. Coalition to Defend Affirmative Action the U.S. Supreme Court voted 6-2 to uphold a voter referendum outlawing affirmative action at Michigan’s public universities. In five separate opinions, the justices set out starkly conflicting views. The majority more or less said that policies affecting minorities that do not involve intentional discrimination should be decided by the voters not judges. Seven other states, including California, Arizona, and Florida have already stopped using preferences for racial minorities in college admissions. According to University of Michigan, Black enrollment dropped 33 percent from when the ban on affirmative action first took effect in 2006.
Justice Anthony M. Kennedy wrote for the majority. He stated that the “case is not about how the debate about racial preferences should be resolved. It is about who may resolve it. There is no authority in the Constitution of the United States or in this court’s precedents for the judiciary to set aside Michigan laws that commit this policy determination to the voters.” The court specifically stated that because this was not a challenge to race-conscious admissions, the Equal Protection Clause and two previous Supreme Court decisions, Gutter v. Bollinger and Fisher v. University of Texas at Austin were not at issue.
A federal appeals court, the U.S. Court of Appeals for the Sixth Circuit, had struck down Michigan’s ballot measure, relying primarily upon the concept that it is unconstitutional for voters to change the public policies that are developed to make it more difficult to adopt or keep policies that protect racial minorities from discrimination. This approach, known as “political-process theory,” is traced mainly to a 1982 Supreme Court ruling in Washington v. Seattle School District that overturned a Washington ballot measure barring the use of busing to achieve racial desegregation in the City’s public schools.
The Court rejected out of hand that theory, implicitly overruling part of the 1982 case. The political-process theory, Justice Kennedy wrote, was not essential to the result in the 1982 case, and was itself a form of encouraging a tendency to group minority individuals together as if they commonly shared the same views on public policy. Doing so, according to Kennedy, would require the courts to classify groups based upon “demeaning stereotypes.” By contrast, Kennedy said that voters can be trusted to decide racial preferences issues at the polls.
At the heart of the political-process doctrine, according to Seattle, is that the Equal Protection Clause prohibit laws that “subtly distort governmental processes in such a way as to place special burdens on the ability of minority groups.” The majority and concurring opinions abandon the Equal Protection analysis in preventing communities from undermining permissible affirmative action programs for a more simplistic and superficially appealing approach: the Equal Protection Clause permits race-conscious programs in admissions when certain conditions are met, but does not require it.
Historically, however, one of the major justifications for judicial remedies to discrimination was that the majority of the citizenry was unwilling and in many circumstances sought to prevent minorities from equally participating in the rights and privileges afforded to the majority. Putting the determination of whether permissible affirmative action programs may be implemented back in the hands of the citizens and out of the courts eliminates an important venue for minorities to protect the programs that allow them to meaningfully overcome disadvantages of past discrimination and participate as well as advance within the ranks of society.
Justice Sonia Sotomayor wrote a passionate and sometimes mocking dissent, so much so that Chief Justice Roberts defensively responded to Justice Sotomayor in a concurring opinion. Sotomayor stated that the Constitution required special vigilance in light of the history of slavery, Jim Crow, and recent examples of discriminatory changes to state voting laws. Her opinion ran 58 pages, longer than the other four combined. It was at once personal in that it reflected her experiences with affirmative action and outrage at the erosion of protection of minorities, but included a cogent analysis of how the majority distorted and ignored precedent to reach the result it did. She stated that “the Constitution does not protect racial minorities from political defeat…But neither does it give the majority free rein to erect selective barriers against racial minorities.” The Justices voting with the majority did not believe that the result of this decision was injurious to minorities.