Reprinted with permission from the April 14th edition of The Legal Intelligencer. (c) 2021 ALM Media Properties. Further duplication without permission is prohibited.

42 U.S. § 2000e, et seq. (“Title VII”) imposes caps on damages that limit the recovery for plaintiffs in employment discrimination cases. The plaintiffs in Yarbrough, et al v. Glow Networks (United States District Court for the Eastern District of Texas, 4:19-cv-00905) employed an interesting theory to avoid those caps, and the strategy paid off. On February 18, 2022, a Texas jury returned a verdict of $70 Million Dollars for ten race discrimination and retaliation plaintiffs, who asserted claims pursuant to 42 U.S.C. § 1981 (“Section 1981”). The Yarbrough Plaintiffs asserted no claims under Title VII.

The Yarbrough Plaintiffs alleged discrimination in the workplace at Glow Networks. They alleged that Glow Networks treated Africans and African-Americans differently than other employees and subjected them to a hostile environment in several ways. For example, they alleged that Glow Networks monitored their workspaces in a manner that they did not monitor other employees; that they were written up and reprimanded for conduct that Glow Networks ignored in other employees; and, that they did not receive promotions despite recommendations from their managers, and that the promotions went to non-Africans and non-African Americans. The Yarbrough Plaintiffs included white managers of the African and African American employees who reported the alleged discrimination to management. The African and African American plaintiffs also asserted retaliation. Some of the employees were terminated, and others resigned, alleging a constructive discharge. Plaintiffs alleged one count of violation of Section 1981. The case was tried by a jury from February 7, 2022 through February 18, 2022, when the jury returned a verdict. For each of the ten plaintiffs, the jury awarded $2 Million in past pain and suffering damages; $1 Million in future pain and suffering; and $4 Million in punitive damages, resulting in a $70 Million verdict. On April 6, 2022, Glow Networks stated in a Response to plaintiffs’ Motion to Enter Judgment that it intends to file post-trial motions for judgment as a matter of law and for a new trial.

Courts generally analyze claims under Section 1981 and Title VII in the same manner, using the burden-shifting framework set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Castleberry v. STI Group, 863 F.2d 259, 263 (3d Cir. 2017). While both statutes prohibit discrimination on the basis of race, Section 1981 contains no damages cap. The most a plaintiff can recover in “non-economic” compensatory and punitive damages in a Title VII is $300,000.00. 42 U.S.C. § 1981a(b). The complaint in the Yarbrough case does not allege Glow Networks’ number of employees, but assuming the maximum would apply, the damages in the case would have been limited to $3 Million, instead of the $70 Million alleged. This difference alone requires race discrimination plaintiffs to consider asserting claims under Section 1981.

Reprinted with permission from the June 21st edition of The Legal Intelligencer. (c) 2021 ALM Media Properties. Further duplication without permission is prohibited.

Since its enactment in 1986, employers have used the federal Computer Fraud and Abuse Act, 19 U.S.C. §1030 (“CFAA”) to vindicate violations of the employer’s workplace policies regarding use of computers, email accounts, and other electronic information by departing employees. The CFAA inevitably appeared as a claim in an employer’s complaint to address such conduct as downloading information from work computers and email accounts, or wiping devices and removing valuable information. The CFAA potentially provided relief where the information taken might not meet the definition of a “trade secret” in the federal Defend Trade Secrets Act (18 U.S.C. §1986), or Pennsylvania’s Uniform Trade Secrets Protection Act (12 P.S. § 5302). Further, and perhaps providing leverage for employers, the CFAA provided a criminal remedy for such violations. In Van Buren v. United States, 592 U.S. ___ (June 3, 2021), the United States Supreme Court may have eliminated that claim for wronged employers.

The CFAA prohibits intentionally accessing a computer with or without authorization or exceeding authorized access of a computer. The Act defines “exceeding authorized access” as accessing a computer with authorization and using that access to obtain information in the computer to which the individual is not otherwise entitled. The CFAA imposes criminal liability for violations of these prohibitions. It also imposes civil liability through a private cause of action if there is “damage,” meaning, an impairment to the integrity or availability of data, a program, a system or information.

Reprinted with permission from Lower Bucks Chamber of Commerce Outlook Magazine, July/August 2021 Edition

The pandemic changed the workplace dramatically, and perhaps permanently. COVID called upon employers to adapt to remote work with very little notice and preparation. Employers then adapted their offices and workspaces to allow employees to work safely in their facilities with masks and social distancing. And then, just as quickly, CDC modified its masking guidance. Employers are challenged to comply with changing guidelines and existing laws and a very competitive job market. Employers must consider new masking guidelines, vaccination mandates and remote work options, as well as the laws that apply to those considerations.

When the pandemic started, CDC guidelines presented a simple rule: In-person workplaces should require employees to wear masks, unless there was a health reason that prevented an employee from doing so. If an employee had a health reason not to mask, the employer could comply with the Americans with Disabilities Act, and the Pennsylvania Human Relations Act, by accommodating the employee who provided medical documentation of the health issue. The CDC recently changed its guidance to state that vaccinated people do not need to wear masks, and this is where it gets complicated.

The American Rescue Plan Act of 2021 (ARPA), among other significant items, imposed new obligations for employers pursuant to the Consolidated Omnibus Reconciliation Act (“COBRA”). Specifically, ARPA requires employers to provide COBRA premium subsidies to certain employees from April 1, 2020 through September 30, 2021. The requirement comes with complicating definitions, retroactivity provisions, and new forms, creating a temporary compliance issue for employers. On April 7, 2021, the United States Department of Labor issued Model Notices and “FAQ’s” to assist with these compliance issues.

The COBRA subsidy is available from April 1, 2021 to September 30, 2021 to “assistance eligible individuals,” that is, individuals who are eligible for COBRA coverage as a result of an involuntary termination or a reduction in hours. The Act specifically excludes individuals who voluntarily terminate their employment. “Assistance eligible individuals” are not required to pay their COBRA premiums from April 1, 2021 through September 30, 2021. The employer or plan to whom the individual would normally pay premiums is entitled to a Medicare tax credit for the amount of the premium assistance. There is no guidance from the Department of Labor or the Internal Revenue Service regarding these tax credits.

Reprinted with permission from the February 22nd edition of The Legal Intelligencer. (c) 2021 ALM Media Properties. Further duplication without permission is prohibited.

In Martinez v. UPMC Susquehanna, the United States Court of Appeals for the Third Circuit clarified the specificity required in pleading prima facie  cases of discrimination in light of the holdings in Ashcroft v. Iqbal, 556 U.S. 662 (2009)  and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).  The Third Circuit held that an age discrimination plaintiff need not plead the exact age or duties of the plaintiff’s alleged replacement in order to survive a motion to dismiss. 

The plaintiff in the Martinez case appealed an order issued by the United States District Court for the Middle District of Pennsylvania dismissing the case for failure to state a claim under Iqbal  and Twombly.    The defendant, UPMC Susquehanna, employed the plaintiff, Dr. Martinez, as an orthopedic surgeon.  Dr Martinez alleged in his complaint that UPMC Susquehanna terminated his employment and advised him that it was “moving in a different direction and his services were no longer needed.”  UPMC Susquehanna also told Dr. Martinez that his termination had “nothing to do with his performance.”  Dr. Martinez pleaded that he was seventy (70) years old, and that UPMC Susquehanna hired two doctors after his termination.  The Complaint alleged that one of the hired physicians took over some of Dr. Martinez’s job duties, and that the second doctor was hired in response to a job posting for an orthopedic surgeon.  Relevant to the Court’s analysis, Dr. Martinez alleged that both doctors were “significantly younger”, “less qualified,” and “less experienced” than Dr. Martinez.

Reprinted with permission from the June 19th edition of The Legal Intelligencer. (c) 2020 ALM Media Properties. Further duplication without permission is prohibited.

The Supreme Court of the United States held in Bostock v. Clayton County, Georgia, 590 U.S. ___ (US 2020) that Title VII’s prohibition against discrimination on the basis of sex also bars discrimination on the basis of sexual orientation and gender identity.  The Court’s opinion relies on the text of the statute, rejecting arguments from employers regarding the failure to specifically include gender identity or sexual orientation in the statue. The Supreme Court’s decision in Bostock is historic – it expands the protections of Title VII to sexual orientation and gender identity, protections previously denied.  The Court’s ruling requires employers to update and modernize their policies and procedures, hiring practices, training and workplace culture.    

On September 24, 2019, the United States Department of Labor announced a new final rule regarding eligibility for overtime pay.   The rule requires employers to revisit their classifications of employees as exempt in order to ensure compliance. 

As I discussed in previous articles (Texas Federal Judge Blocks New Overtime Rules and Speaking of Overtime Rules and One Final Overtime Update) the DOL announced rules in 2016 to dramatically increase the salary threshold in order for certain categories of employees to meet the standards for exemption from federal overtime requirements.  The rules were met with litigation and a stay of their enforcement. 

The new final rule raises the salary threshold from $455 a week to $684 a week, or $35,568 a year.  Employers may now use nondiscretionary bonuses and incentive payments, such as commissions to satisfy up to 10% of the salary level.  Employees will still have to meet requirements related to their duties in order to meet the standards of exemption for the overtime requirements. 

This final rule will become effective on January 1, 2020.  As we advised in 2016,  employers should take steps to ensure compliance by the end of the year.  The first step is to identify any employees who are classified as exempt but are making less than $422 a week, and develop a plan to reclassify those employees, or revise their compensation.  This is a good time to revisit the job duties of those employees to ensure that they meet the applicable standards for exemption in terms of their duties as well as their salary.  This is also a good time to review overtime policies to ensure appropriate recordkeeping, efficient use of overtime and compliance with applicable law. 

AMM can help employers navigate these new rules and review their employee classifications to ensure compliance and minimize risk. 

Reprinted with permission from the June 21st edition of The Legal Intelligencer. (c) 2019 ALM Media Properties. Further duplication without permission is prohibited.

In Fort Bend County v. Davis, 587 U.S. ___ (2019), the Court held that the requirement that a plaintiff in an employment discrimination case brought under Title VII, 42 U.S.C. § 2000e, et seq, file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) prior to filing a complaint in court is a procedural and not a jurisdiction requirement.  Therefore, an employer’s failure to assert the absence of an appropriate charge of discrimination in a motion to dismiss results in a waiver of the defense.  The Supreme Court’s decision resolves a split in the circuits regarding whether the requirement is jurisdictional, and highlighted the importance of the charge of discrimination and the motion to dismiss in employment discrimination cases.

Reprinted with permission from the April 19th edition of The Legal Intelligencer. (c) 2019 ALM Media Properties. Further duplication without permission is prohibited.

On April 12, 2019, in the United States District Court for the Western District of Pennsylvania, a jury returned a verdict that serves as a reminder to employment law practitioners of the importance of treating mental health issues with sensitivity and consistent with the Americans with Disabilities Act (“ADA”) and taking a practical approach to reasonable accommodations.  The jury in Schirnhofer v. Premier Comp Solutions LLC, Western District of Pennsylvania docket number 2:16-CV-00462, found that the employer, Premier Comp Solutions LLC (“Premier”), had discriminated against the Plaintiff, Ms. Schirnhofer, on the basis of her mental health disability, and in violation of the ADA.  The jury awarded Ms. Schirnhofer $285,000 in damages:  $35,000 in backpay, and $250,000 in non-economic damages.

This summary of the facts of the case is drawn from the Court’s opinion on Premier’s summary judgment motion, issued on March 28, 2018.  Ms. Schirnhofer began her employment at Premier in 2009, and was terminated on February 5, 2014.  She was employed as a billing assistant in the billing department.  During the course of her employment, she had good performance reviews.  Ms. Schirnhofer was diagnosed with anxiety and other mental health issues prior to her employment with Premier.  Her condition was exacerbated in 2012 when her newborn grandchild died, and a co-worker with whom she was close left Premier.  What followed was a series of interpersonal problems, and conflicts with and complaints about co-workers.  Premier’s president and Ms. Schirnhofer’s co-workers had referred to her as “Sybil” (referencing a character in the movie Sybil who suffered from mental health issues).  The human resources representative noted that she should seek “medical attention.”  Ms. Schirnhofer eventually asked for a reasonable accommodation in the form of two additional ten-minute breaks.  She provided a letter from her physician regarding the need for such breaks to accommodate her Post Traumatic Stress Disorder and her Generalized Anxiety Disorder.  On January 28, 2019 Premier denied the request, despite the advice of its human resources professional to provide the accommodation.  Instead, Premier offered to move her work area.  On a particularly bad day in February, 2014, Ms. Schirnhofer took to Facebook to vent her anxiety.  She was terminated on February 5, 2014 for her Facebook posts in violation of Premier’s Social Media policy.   Ms. Schirnhofer sued, alleging that Premier had terminated her in retaliation for her request for an accommodation, that Premier had discriminated against her in violation of the ADA, and that Premier had failed to provide a reasonable accommodation.   The jury returned a verdict in her favor on the issue of discrimination, but found that Premier had not retaliated against Ms. Schirnhofer.

The lessons for employment law practitioners in this verdict are many, among them:  mental health issues and accommodations are subtle, and require sensitivity; requests for reasonable accommodations provide an excellent opportunity for risk management; and, it is quite expensive to be wrong.

A recent case from the United States Court of Appeals for the Sixth Circuit demonstrates the ongoing struggle to apply the Fair Labor Standards Act (“FLSA”) to the “side gigs” that have come to signify the modern employment market.  In Acosta v. Off Duty Police Services, Inc., United States Court of Appeals for the Sixth Circuit, Nos. 17-5995/6071 (February 12, 2019), the Sixth Circuit held that security offers working for Off Duty Police Services (“ODPS”) as a side job were employees entitled to overtime pay under the FLSA.  

ODPS workers were either sworn law enforcement officers who worked for law enforcement entities during the day, or unsworn workers with no background in law enforcement.  All workers had the same duties, but sworn officers earned a higher hourly rate.  Duties included “sitting in a car with the lights flashing or directing traffic around a construction zone.”  They were free to accept or reject assignments, but would be punished by withholding future assignments if they did so.  When they accepted an assignment, ODPS instructed the workers where to report, when to show up, and who to report to upon arrival.  ODPS provided some equipment, but workers did have to use some of their own equipment.  Workers followed customer instructions while on assignment, and only occasionally received supervision from ODPS.  ODPS paid workers for their hours upon submission of an invoice.  Workers did not have specialized skills, as sworn officers and unsworn workers had the same duties.   

ODPS treated the workers as “independent contractors.” As the facts set forth in the Sixth Circuit opinion demonstrate, the factors relevant to determining whether a worker is an independent contractor or employee do not provide a clear answer.  The United States District Court for the Western District of Kentucky broke the tie this way:  the court held that “nonsworn workers” were employees, but that the sworn officers were independent contractors because they “were not economically dependent on ODPS and instead used ODPS to supplement their incomes.”   

The Sixth Circuit disagreed, noting that the FLSA is a broadly remedial and humanitarian statute, designed to improve labor conditions.  The Sixth Circuit applied the “economic reality” test to determine that the sworn offers were also employees and not independent contractors, and to uphold the finding that unsworn workers were employees.  Specifically, the Court noted that the officers provided services that represented an integral part of the business, and that the work required no specialized skills, that the officers made only limited investment in equipment, and that the workers had little opportunity for profit or loss.  The Court noted that the facts did not “break cleanly in favor of employee or independent contractor status” regarding the right to control the work for the sworn officers.