EEOC Entitled To Broad Range Of Information From Company It Is Investigating
July 31, 2011 | |After Konica Minolta Business Solutions fired an African-American salesman who had been working at the Konica facility in Tinley Park, near Chicago, the salesman filed a charge of discrimination with the Equal Opportunity Employment Commission (EEOC) that stated:
Since the beginning of my employment, my Branch Manager has subjected me to different terms and conditions of employment. On or about October 5, 2005, I was disciplined for not meeting sales quotas, whereas a non-Black similarly situated co-worker was not disciplined for not meeting his quota. On or about October 21, 2005, I complained to [the] Human Resources Department about race discrimination. On or about October 31, 2005, I was discharged. I believe I have been discriminated against and retaliated against because of my race, Black, in violation of the Civil Rights Act of 1964, as amended.
The EEOC initiated an investigation and discovered that there apparently were only six African-Americans employed at Konica, out of 120 total employees, in the company’s four facilities in and around Chicago, and that all six were employed in Tinley Park. Of the approximately 100 employees at the other locations, only one was a person of color. The EEOC also learned that there were two sales teams at the Tinley Park facility, and that those teams were segregated largely along racial lines. The EEOC therefore suspected that Konica might have engaged in discriminatory hiring practices. Specifically, the EEOC thought that the company might intentionally have steered black employees to one sales team, located at the Tinley Park facility, which worked in predominantly African-American neighborhoods.
In June 2008, the EEOC issued a subpoena requesting records relating to the hiring of sales personnel at all four of Konica’s Chicago-area facilities. The subpoena sought information about people who expressed an interest in sales work at any of those offices; the applications Konica reviewed to fill sales positions; communications with applicants about sales positions; evaluations for each applicant considered for a sales position; the personal information, including race, of each applicant hired to fill a sales position and information about whether that person was promoted or transferred; and the criteria used to evaluate applicants for sales positions. Konica filed a petition with the EEOC to revoke the subpoena, but the EEOC denied its request. Konica then notified the EEOC by letter that it was refusing to comply with the subpoena. On March 26, 2009, the EEOC filed an application with a federal district court for an order enforcing the subpoena.
The district court granted the EEOC’s application, and Konica appealed to the U.S. Court of Appeals for the Seventh Circuit. Konica argued that the information about its hiring practices that the EEOC wanted to examine was not relevant to the salesman’s charge of discrimination. The Seventh Circuit decided, however, that Konica’s perspective was “too narrow.” It explained that the EEOC was entitled generally to investigate employers within its jurisdiction to see if there was a prohibited pattern or practice of discrimination. Here, the salesman alleged both a specific instance and such a pattern of race discrimination, asserting that he was treated differently from white co-workers in the “terms and conditions” of his employment, and that he was unequally disciplined for not meeting a sales quota. The circuit court acknowledged that it was true that the salesman was not saying that Konica had refused to hire him, but the Seventh Circuit decided that that did not make hiring data irrelevant. The question, it found, was not whether the salesman had specifically alleged discrimination in hiring, but instead was whether information regarding Konica’s hiring practices would “cast light” on the salesman’s race discrimination complaint.
In the appellate court’s opinion, the answer to the question whether Konica discriminated in hiring or in assigning employees to its various facilities would “advance the agency’s investigation into possible discrimination” against the salesman based on his race, as well as any more general case it might choose to bring. The circuit court found that nothing suggested that the EEOC had strayed so far from either the salesman’s charge or its broader mission that it had embarked on a “proverbial fishing expedition.” In the Seventh Circuit’s view, the EEOC had a “realistic expectation rather than an idle hope” that the hiring materials it sought would illuminate the facts and circumstances surrounding the salesman’s allegations of race discrimination. The circuit court concluded by noting that the EEOC had limited its inquiry to the four Konica branches in the Chicago area and to sales personnel, and it concluded that the information sought by the EEOC was properly tailored to matters within its authority. [Equal Employment Opportunity Comm. v. Konica Minolta Business Solutions U.S.A., Inc., 639 F.3d 366 (7th Cir. 2011).]
Accountant Loses Equal Pay Act And FLSA Claims
The plaintiff in this case alleged that her predecessor, a male, had been hired in 2003 by the Young Women’s Christian Association of Greater Pittsburgh (YWCA) as an “accounts payable/payroll specialist.” The YWCA had created the specialist position after transitioning to a computerized payroll system due to the need for an individual to get the system up and running and train other employees to use the system. The YWCA paid the plaintiff’s predecessor a salary of $34,000.
After the plaintiff’s predecessor resigned in April 2004, the YWCA concluded that it no longer needed an accounts payable/payroll specialist. Accordingly, in October 2004, the YWCA created a new position for an accountant. The accountant would be expected to reconcile accounts, review the YWCA’s accounts and books, and prepare reports, as well as participate in payroll and accounts payable activities. The salary range for the position was $30,000 to $35,000 based on a United Way survey that compared similar positions in several non-profit organizations.
In August 2005, the plaintiff applied for the position, listing her desired starting salary as $28,000 to $31,000. The plaintiff had a Bachelor of Accounting and a Certified Public Accountant degree from a university in Colombia, worked on a part-time basis as an accountant for several small companies in Colombia, and worked as an accountant for a small employer in the United States for a year and a half. Her resume boasted over a decade of accounting-related experience. After interviewing successfully, the plaintiff was offered the position at a salary of $33,000, consistent with the YWCA’s practice of making an offer below the maximum approved salary to allow room for negotiation. The plaintiff accepted the offer without attempting to negotiate and began her employment with the YWCA on September 26, 2005.
In the six month performance review she received on April 26, 2006, the plaintiff received a rating of “achieves expectations” in the listed categories and was given a number of goals to complete by the end of August 2006. As the plaintiff had been spending almost all of her time processing payroll, the tasks were intended to shift her focus to auditing and accounting functions consistent with her job duties.
In July 2006, the plaintiff mentioned to her supervisor that she was being paid less than her predecessor had been paid. Around the same time, the plaintiff’s performance at work allegedly began to suffer. The plaintiff did not complete the auditing and accounting goals set forth in her six month evaluation because she spent her time processing payroll and was insufficiently familiar with the computerized system to establish an auditing plan. According to the plaintiff, the turnover of employees in the financial services department was partially responsible for her focus on payroll as was the sheer size of the payroll at YWCA. Her supervisor claimed that the plaintiff’s attendance suffered – she would come to work late or leave early, and failed to request time off in advance – although the plaintiff disputed the extent of those issues. Additionally, the plaintiff made mistakes in performing her job. For example, she twice posted invoices to the incorrect month.
Accordingly, the plaintiff received an overall rating of “Needs Improvement” on her December 15, 2006 annual performance evaluation. As the plaintiff had not met the goals identified in the six month performance evaluation, the annual evaluation reiterated those goals with updated completion dates, and identified specific areas for improvement.
The plaintiff continued to have difficulty managing her workload and meeting deadlines, and sent a former employee the incorrect tax forms. Accordingly, on March 23, 2007, the plaintiff’s supervisor gave the plaintiff a “Performance Improvement Plan” (PIP), which identified her shortcomings, suggested means of correcting those shortcomings, and set forth tasks to be completed by certain dates. Although the listed deadlines gave the plaintiff only a few weeks at most for completion, many of the tasks were the same ones she had been instructed to complete since the prior April. The plaintiff communicated to her supervisor her belief that the annual evaluation and PIP were inaccurate and that the target dates in the PIP were unreasonable because she already had a full workload.
The plaintiff and her supervisor met on April 20, 2007, to discuss the PIP. The plaintiff had not completed its goals and her performance and attitude had not improved. Accordingly, the plaintiff was terminated on April 25, 2007.
The YWCA sought an accountant to replace the plaintiff, preferably someone with experience handling complex accounting who could perform at a higher level. The position was initially listed with a starting salary in the range of $30,000 to $35,000. However, in July 2007, the YWCA retained a third party vendor to conduct a compensation study. As a result of that study, the YWCA increased the salary for the accountant position to $40,000 to make it consistent with market rates.
A male applied for the position on December 15, 2007, seeking a salary between $35,000 and $40,000. He had a bachelor’s degree in accounting and management and well over a decade of accounting experience, and had most recently worked as an accountant for a large non-profit insurance company, which, according to the YWCA, made him ideal for the accountant position. The YWCA offered him the job at a starting salary of $38,000, which he accepted.
The plaintiff sued, alleging that the YWCA had violated the federal Equal Pay Act by paying her less than her predecessor and her successor, and had retaliated against her for complaining about the disparity by increasing her workload, giving her bad reviews and unreasonable deadlines, and ultimately firing her, in violation of the anti-retaliation provision of the Fair Labor Standards Act. The district court granted summary judgment in favor of the YWCA, and the plaintiff appealed.
The U.S. Court of Appeals for the Third Circuit affirmed the district court’s decision. The Third Circuit first stated that it agreed with the district court that the plaintiff did not perform equal work to her predecessor. It noted that the crucial finding on the equal work issue was whether the jobs to be compared had a “common core” of tasks, i.e., whether a significant portion of the two jobs was identical. The question was whether the differing or additional tasks made the work substantially different. The circuit court noted that the YWCA created the plaintiff’s predecessor’s position as an accounts payable/payroll specialist due to the organization’s specific need for someone to transition the YWCA from a paper system to a computerized system. Accordingly, his responsibilities included getting the system up and running, streamlining it with other systems, and training supervisors and subordinates, as well as processing payroll. A certain level of skill and experience with computerized payroll systems therefore was necessary to perform the responsibilities of that position, the circuit court found.
The plaintiff, on the other hand, was hired as an accountant, as there was no longer a need for the specialist position after her predecessor’s departure. The plaintiff’s responsibilities overlapped with her predecessor’s in that she was responsible for supervising the payroll process and ultimately spent the majority of her time processing payroll. However, her predecessor’s position “required a greater understanding of the computerized system than what was required to merely process payroll because he was expected to implement the system and train others on its use.” Accordingly, the circuit court found, the plaintiff and her predecessor did not perform equal work.
The circuit court then analyzed the plaintiff’s successor, and concluded that assuming that he was an appropriate comparator to the plaintiff, “no reasonable jury could conclude that he was paid more because of his sex.” The circuit court pointed out that between the plaintiff’s termination and her successor’s application, the YWCA increased the salary for the accountant position based on a study that indicated that the market rate for similar positions was approximately $40,000. Additionally, the plaintiff’s successor requested a starting salary between $35,000 and $40,000. The circuit court found that the YWCA offered him $38,000 based on the study results, his requested salary, and due to his experience, specifically his seven years of prior employment as an accountant with a large non-profit company, which the YWCA hoped meant that he could perform at a higher level than the plaintiff had as the YWCA’s accountant. Those were “valid, non-sex-based reasons justifying the salary differential” between the plaintiff and her successor. The circuit court noted that because there was no evidence of pretext, the plaintiff could not establish an Equal Pay Act violation based on her successor’s salary. The circuit court therefore affirmed the district court’s grant of summary judgment against the plaintiff on her Equal Pay Act claim.
Moreover, the appellate court affirmed the district court’s decision against the plaintiff on her retaliation claim, explaining that the YWCA had offered a legitimate, non-discriminatory reason for the plaintiff’s poor evaluations and ultimate termination, namely, her unsatisfactory job performance. It found emails and other documentary evidence reflecting the plaintiff’s inability to manage her workload, review the work of her subordinates to prevent error, and complete tasks in a timely manner, which, it found, supported many of the negative comments contained in the annual evaluation and PIP.
Furthermore, the appellate court determined, the plaintiff never completed the goals identified in the six month review, which were consistent with the responsibilities of her job, even after the deadlines were extended to complete those tasks. Accordingly, it upheld summary judgment in favor of the YWCA on the plaintiff’s retaliation claim. [Rhoades v. Young Women’s Christian Association of Greater Pittsburgh, 2011 U.S. App. Lexis 7871 (3rd Cir. Apr. 15, 2011).]
Circuit Court Requires Contemporaneous Documentation By Lawyer For Fee Shifting To Occur In FLSA Case
After a federal district court in New York awarded an attorney $515,179.28 in attorney’s fees pursuant to the Fair Labor Standards Act’s fee shifting provision for work performed in successfully litigating a case against New York City, the city appealed to the U.S. Court of Appeals for the Second Circuit on the ground that the attorney had not kept contemporaneous records and therefore was not entitled to the award of attorney’s fees. The Second Circuit referred to a strict rule it had set forth in 1983 in New York State Ass’n for Retarded Children v. Carey, Inc., that stated that absent unusual circumstances, attorneys were required to submit contemporaneous records with their fee applications. The circuit court remanded the case to the district court so that it could determine if the attorney’s circumstances warranted “applying an exception to the general rule” set forth in Carey.
The district court reinstated the original award of $515,179.28 in attorney’s fees. It stated that it was “loathe” to make an exception to the Carey rule based on its personal observation, but it nevertheless did so. The district court described the important role that the attorney had played in the FLSA litigation, recounting his work at trial and participation in conferences. The district court found that it simply would be inequitable to deny the attorney an award where it knew firsthand of his work in the case and good standing among the bar. The matter reached the Second Circuit again.
In its most recent decision in this matter, the Second Circuit explained that an attorney’s fee award “based entirely on the district court judge’s personal observation and opinions of the applying attorney” was contrary to the Carey rule “and must be vacated.” If nothing else, the circuit court declared, permitting that basis for what should be a “rare exception” was “completely unfair” to an attorney who did identical work and failed to keep the required contemporaneous records but whose reputation was unknown to the judge. The Second Circuit added that it also would be unfair to that lesser-known attorney who had done good work but for one reason or another had failed to impress the judge. Moreover, such an “exception” was not an exception to the Carey rule at all, the circuit court ruled, but was “an abrogation.” It pointed out that Carey conditioned attorney’s fees on contemporaneous records in all but the “rarest of cases.”
Nonetheless, the circuit court stated that the attorney in this case should be eligible to recover limited fees for any contemporaneously documented time that he was physically before the district court. It therefore held that entries in official court records (e.g. the docket, minute entries, and transcriptions of proceedings) could serve as reliable documentation of an attorney’s compensable hours in court at hearings and at trial and in conferences with the judge or other court personnel. Where the court’s docket reflected that the attorney in this case was in the courtroom participating in trial or was in chambers in conference with the judge and other counsel, these entries, comparable to contemporaneous attorney time records, could be effective substitutes for the attorney’s own contemporaneous records, the circuit court ruled. It added that this was “not an invitation” for district courts to engage in the type of conjecture that had occurred here with respect to the attorney’s purported 120 hours of trial time. Instead, attorneys seeking fees “must point to entries in the official court records that specifically and expressly demonstrate their presence before the court and indicate with reasonable certainty the duration of that presence.” Finally, the circuit court emphasized that the onus of gathering the applicable docket entries and other court records, if any, was on the applying attorney, not the district court, and that district courts were under no obligation to award fees based on such time. [Scott v. City of New York, 2011 U.S. App. Lexis 11255 (2d Cir. May 24, 2011).]
FLSA Case Can Be Settled For Less Than Statutory “Liquidated Damages,” Court Finds
In a lawsuit filed on October 12, 2010, the plaintiff, a bus driver, alleged that his employer, a transportation company located in midtown Manhattan, had failed to pay overtime compensation required by federal and state law to employees who worked over 40 hours per week. The plaintiff requested that the lawsuit be designated as a collective action under the FLSA and that a class be certified for the related state law claims. The plaintiff, however, never sought to provide notice of collective action or certification of a class.
During discovery, the parties uncovered documentary evidence suggesting that the plaintiff drove the company bus interstate, and therefore that the defendants might have a valid defense to his claims under the federal Motor Carrier Act. On February 9, 2011, the parties filed a joint motion for the approval of a settlement agreement that provided for a payment only to the plaintiff and a payment that was less than the full sum of liquidated damages mandated by the FLSA. Thereafter, the plaintiff filed an amended complaint that omitted the collective action and class action claims. The parties agreed to settle the plaintiff’s action for $5,000, and they asked the court to approve their settlement and dismiss the action with prejudice as to the plaintiff.
In its decision, the court explained that the FLSA imposes the obligation to pay unpaid overtime compensation and “an additional equal amount as liquidated damages” on employers who violate its requirement that overtime wages be paid. The obligation to pay “liquidated damages” cannot be bargained away by bona fide settlements of disputes over coverage, the court noted. However, the court continued, some circuit courts have ruled that courts may enter judgments on a basis that does not require full payment of liquidated damages after scrutinizing the proposed settlements for fairness.
In this case, the court found, the plaintiff had sufficiently supported the settlement agreement and demonstrated that it represented a fair and equitable settlement of his bona fide dispute with his employer, as required by the FLSA. Given that there was documentary evidence that the plaintiff drove the company bus interstate and he therefore might be an exempt employee under federal overtime laws, the court found that the settlement amount to which the parties had agreed was “reasonable and fair.” In addition, the court found, because the plaintiff had not sought to circulate notice of his action, there was no reason to find that other employees would be prejudiced by the dismissal of this lawsuit.
Accordingly, the court approved the settlement, dismissed the action with prejudice as to the plaintiff, and ordered that the case be closed. [Marfak v. Peretta, 2011 U.S. Dist. Lexis 48994 (S.D.N.Y. May 6, 2011).]
Worker Receiving Workers’ Compensation Benefits Can Sue For Personal Injury
In May 2006, James Construction, a general contractor incorporated and based in Pennsylvania, was working on a project at the Newport Naval Station in Rhode Island. In search of temporary laborers, James Construction contacted a temporary employment agency, Northeast Temps, Inc. d/b/a Labor Systems, a Massachusetts corporation with its principal place of business in Massachusetts. In response, Labor Systems dispatched the plaintiff in this case, a Massachusetts resident, from its office in Fall River, Massachusetts, to the Rhode Island job site. During the plaintiff’s work on the project, he discussed his Massachusetts residency with his supervisor, a James Construction employee who was neither a Massachusetts resident nor a Rhode Island resident. At the conclusion of the plaintiff’s assignment, his supervisor signed a work order that displayed Labor Systems’ two Massachusetts locations and their corresponding 508 area code telephone numbers.
Almost six months later, on November 15, 2006, James Construction again contacted Labor Systems, at one of the 508 area code telephone numbers, to specifically request the plaintiff’s services for a different project at the Newport Naval Station. The next day, the plaintiff picked up a work order and his personal protective equipment at Labor Systems’ Fall River office before traveling to Rhode Island.
The plaintiff’s second stint working at the Newport Naval Station lasted about six weeks. During the course of this work, the plaintiff received his paychecks, with Rhode Island tax withholdings, from Labor Systems. For his services, James Construction remitted payments to an Ohio address provided by Labor Systems. Pursuant to a contract between James Construction and Labor Systems, James Construction assumed responsibility for supervising the plaintiff while he was at the construction site. Additionally, the contract required Labor Systems to provide workers’ compensation insurance for the employees it provided to James Construction. At the time Labor Systems and James Construction agreed to the contract, Labor System already had workers’ compensation insurance policies from Liberty Mutual Insurance Company for Massachusetts and from Beacon Mutual Insurance Company for Rhode Island.
On January 4, 2007, while working at the Newport Naval Station site, the plaintiff was seriously injured. That same day, Labor Systems filed a report of injury so that the plaintiff could collect Rhode Island workers’ compensation benefits. Consequently, the plaintiff began receiving $629.27 a week from Beacon Mutual. These payments lasted for almost 17 weeks and totaled $10,248.15.
On February 20, 2007, the plaintiff filed a claim for Massachusetts workers’ compensation benefits with Liberty Mutual. An administrative judge in the Massachusetts Department of Industrial Accidents concluded that the plaintiff was entitled to these benefits, and ordered Liberty Mutual to take credit for the monies paid by Beacon Mutual and assume responsibility for future benefits.
In January 2009, the plaintiff brought suit in a federal district court in Massachusetts alleging that the injuries he had suffered at the construction site had been caused by James Construction and his supervisor’s negligence. The district court granted the defendants’ motion for summary judgment, finding that Rhode Island as opposed to Massachusetts had a substantially more significant relationship to this litigation and, therefore, it had to apply Rhode Island workers’ compensation law. The court went on to conclude that Rhode Island workers’ compensation law granted “special employers,” such as James Construction, “immunity from private action by injured employees.” Similarly, the court concluded that Rhode Island law prohibited a plaintiff from suing co-employees such as his supervisor. The plaintiff appealed to the U.S. Court of Appeals for the First Circuit.
The defendants pointed out that Rhode Island workers’ compensation law generally provided that, “[t]he right to compensation . . . and the remedy for an injury granted by [Rhode Island law], shall be in lieu of all rights and remedies as to that injury now existing . . . against an employer, or its . . . employees.” The defendants asserted that this “employer” immunity extended to “special employers” – that is, “person[s] who contract[] for services with a general employer for the use of an employee” – and their employees. Accordingly, the defendants contended, Rhode Island workers’ compensation law barred the plaintiff’s claims against James Construction, the special employer. The plaintiff did not dispute this interpretation of Rhode Island law, and the First Circuit therefore assumed that Rhode Island law, if applicable, barred the plaintiff’s lawsuit.
The First Circuit then examined whether Massachusetts law would similarly bar the plaintiff’s claims, and concluded that it would not. The circuit court explained that, generally speaking, the Massachusetts workers’ compensation law barred employees from recovering against their employers for injuries received on the job. An injured employee, however, retained the right to bring suit against third parties who might be liable for injuries compensable under Massachusetts workers’ compensation law. In short, the First Circuit explained, for an employer to be immunized pursuant to Massachusetts law, a “direct employment relationship must exist” between the injured party and the person claiming immunity, and the employer must be an insured person liable for the payment of compensation.
In this case, the circuit court found, James Construction was not an “insured person liable for the payment of [workers’] compensation.” To the contrary, pursuant to the express terms of their agreement, Labor Systems assumed responsibility for providing the plaintiff’s workers’ compensation insurance. Consequently, the First Circuit concluded, the plaintiff’s claims against James Construction were not barred by the Massachusetts workers’ compensation law.
The First Circuit then found that the Massachusetts workers’ compensation law applied to the plaintiff’s lawsuit because Massachusetts had a “more significant relationship” to the parties and the occurrence than Rhode Island. The circuit court reasoned that the plaintiff was a Massachusetts resident who, after obtaining the approval of a Massachusetts administrative judge, received benefits from a Massachusetts workers’ compensation policy for an injury he suffered while employed by a Massachusetts company. Even though the injury occurred out of state, Massachusetts retained a “significant interest” in the extent to which a resident was compensated for a workplace injury. The circuit court added that Massachusetts also had a stake in who paid that compensation. By contrast, the circuit court continued, Rhode Island had little interest in how the plaintiff was compensated or whether a non-Rhode Island defendant was protected by immunity.
The circuit court acknowledged that the plaintiff’s lawsuit involved substantial contacts with Rhode Island: The injury and injury-causing conduct occurred in Rhode Island and the parties’ relationship was centered in Rhode Island. These Rhode Island contacts, however, were “simply insufficient to outweigh Massachusetts’ superior interests in this case.” Accordingly, it concluded that Massachusetts workers’ compensation law governed the immunity issue in this case and did not bar the plaintiff’s claims. [Robidoux v. Muholland, 2011 U.S. App. Lexis 7337 (1st Cir. Apr. 8, 2011).]
Reprinted with permission from the August 2011 issue of the Employee Benefit Plan Review – From the Courts. All rights reserved.
