Tick-Tock Goes the Clock: SCOTUS Clarifies the Statute of Limitations in Constructive Discharge Actions

On May 23, 2016, the United States Supreme Court issued its opinion in Green v. Brennan, Postmaster General, in which the Court gave aggrieved employees in workplace discrimination cases more time to file complaints against their employers.  The Court in Green addressed when the 45-day clock during which an employee must file a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) when pursing a claim for employment discrimination begins to run.  In a 7-1 opinion by Justice Sotomayor, the Court held that because part of the “matter alleged to be discriminatory” in a constructive-discharge claim is an employee’s resignation, the 45-day limitations period for such an action begins to run when the employee “gives notice of his resignation,” not the last day of the last discriminatory workplace incident. Justice Thomas, a former chairman of the EEOC, dissented.  Justice Alito concurred with the majority’s outcome, but not with its reasoning.

In Green, the petitioner complained to his employer, the United States Postal Service (“USPS”), because he believed he was passed over for a promotion due to his race.  After making the complaint, his supervisors accused petitioner of intentionally delaying mail, a federal offense.  On December 16, 2009, petitioner and the USPS entered into an agreement whereby the USPS agreed not to pursue criminal charges in exchange for the petitioner either retiring or accepting another position in a less desirable location for less pay.  The petitioner chose to retire, and submitted his resignation on February 9, 2010, with an effective date of March 31, 2010.

On March 22, 2010, 41 days after submitting his intention to retire but 96 days after signing the agreement with USPS, the petitioner contacted the EEOC to report an unlawful constructive discharge, which is a prerequisite to filing a complaint under Title VII of the Civil Rights Act of 1964.  The Federal District Court dismissed his complaint as untimely because it ruled that petitioner did not contact the EEOC within 45 days of the complained discriminatory action.  The Tenth Circuit affirmed, holding that the 45-day window began to run on December 16, 2009, when the agreement with the USPS was signed.

In holding that the “matter alleged to be discriminatory” in a constructive-discharge claim includes the employee’s resignation, the majority in Green offered three reasons to start the 45-day period with the notice of resignation:

  • The employee’s resignation is a part of the completed cause of action, which has two elements: discriminatory conduct such that a reasonable employee would have felt compelled to resign and the actual resignation. Relying on Pennsylvania State Police v. Suders, 542 U.S. 149 (2004), the majority held that it is only after an employee has resigned that they have a complete and present cause of action to trigger the limitations period.
  • The majority held that the natural reading of “matter alleged to be discriminatory” includes the allegations that form the basis of the claim, e. the employee’s resignation.
  • Lastly, the majority relied on practical considerations of its holding in order to further the policy goals of Title VII’s remedial structure. Otherwise, the majority noted, an employee would be forced to file a complaint only to later amend it to allege a constructive discharge after resigning.

Importantly, the majority concluded that the constructive-discharge claim accrues, and the limitations period begins to run, when an employee gives notice of their resignation, not from the effective date of that resignation.  So, if an employee gives their two-week notice to their employer, their claim would run from the date that notice was given, not from their last day of work two weeks later.  The Court did not rule on the merits of the petitioner’s claim, instead remanding the matter to the Tenth Circuit Court of Appeals to determine when exactly Green gave notice of his resignation.

While Justice Alito concurred in the outcome of the majority’s decision as it applied to the petitioner, he did not agree with the majority’s bright-line rule for all constructive-discharge claims. Rather, Justice Alito would start the 45-day period from the employer’s last discriminatory act, which could include the employee’s resignation if it was the employer’s intent to force that employee to resign.  Without that intent however, Justice Alito argued that the resignation is not an “independent discriminatory act but merely a delayed consequence of earlier discrimination” that does not give rise to a fresh limitations period.  In his dissent, Justice Thomas would have affirmed the Tenth Circuit because, he argued, only an employer’s action can trigger the 45-day period, and not the action of an employee.  To Justice Thomas, an employee’s decision to resign does not fall within the meaning of a “matter alleged to be discriminatory” because it is an action taken solely by the employee.

The effect of this decision is that it eliminates procedural uncertainties for when the limitations period begins for a claim of constructive discharge.  It is important for employers to remember that this decision only applies to the claims of constructive discharge, and not for other claims of discriminatory conduct.  As noted by Justice Sotomayor, the “limitations-period analysis is always conducted claim by claim.”  The 45-day period for those other claims will begin to run from when those alleged acts occur, but for claims of constructive discharge, the clock does not start until the employee gives notice of their resignation.

For more information regarding the potential impact of this decision, please John C. Petrella, Esq., Chair of the firm’s Employment Law & Litigation Practice Group, at jpetrella@nullgenovaburns.com, or at 973-533-0777 or contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com.

Transgender Accommodation Issues at the Forefront of Employment and Education

Earlier this month, the Equal Employment Opportunity Commission (EEOC) released a new Fact Sheet, announcing its formal position on bathroom access rights for transgender employees.  The Fact Sheet provides employers with a nuanced look into what practices and procedures the EEOC will be investigating should a charge be brought alleging sex discrimination in the context of bathroom usage by transgendered individuals.

As noted therein, the EEOC defines the term “transgender” as referring to “people whose gender identity and/or expression is different from the sex assigned to them at birth,” and specifically notes that “[a] person does not need to undergo any medical procedure to be considered a transgender man or a transgender woman.”

The EEOC reiterates that it enforces Title VII of the Civil Rights Act of 1964 in instances of discrimination against transgendered individuals, as Title VII prohibits employer discrimination on the basis of sex where the action is “motivated by hostility, by a desire to protect people of a certain gender, by gender stereotypes, or by the desire to accommodate other people’s prejudices or discomfort.” The EEOC also noted that employers cannot and should not rely on state laws contrary to this guidance.

Bathroom Access Rights for Transgender Employees Under Title VII

The EEOC’s interpretation of “transgender” in the context of Title VII and bathroom usage is based upon two cases before the EEOC: Macy v. Dep’t of Justice, EEOC Appeal No. 0120120821, 2012 WL 1435995 (Apr. 12, 2012) and Lusardi v. Dep’t of the Army, EEOC Appeal No. 0120133395, 2015 WL 1607756 (Mar. 27, 2015), as well as a recent opinion from the Fourth Circuit in G.G. ex rel. Grimm v. Gloucester Cty. Sch. Bd., — F.3d –, 2016 WL 1567467 (4th Cir. 2016).

Lusardi held that prohibiting equal access to a common restroom corresponding to the employee’s gender identity is sex discrimination.  Further, in Macy, the EEOC noted that an employer cannot avoid the requirement to provide equal access to a common restroom for transgender employees by providing single-user restroom access instead.  However, the EEOC advised that an employer can make single-user bathrooms available to all employees who might choose to use them. In G.G., the U.S. Court of Appeals for the Fourth Circuit followed the Department of Education’s position that sex discrimination under Title IX is prohibited and that educational institutions are to give transgender students access to bathrooms and locker rooms consistent with their gender identity.

In the Fact Sheet, the EEOC reaffirms its position that any state law to the contrary of these decisions and interpretations is not a defense under Title VII.  Thus, employers would be wise to update their policies and procedures to conform with the EEOC’s directives as to transgendered individuals, rather than look to their resident state for guidance.

Transgender Access to School Bathrooms

On May 13, 2016, President Obama issued a directive that requires every public school to provide appropriate access for transgender students or risk the loss of federal funds. The directive has received strong backlash from conservative leaders who have accused the President of blackmailing and the federal government of getting involved in local issues.

On the same day, the Department of Education and the Department of Justice (“the Departments”) issued a Dear Colleague letter to assist in ensuring that transgender students can “enjoy a supportive and nondiscriminatory school environment.” Although the joint letter does not carry force of law, the intent is clear: schools must agree or lose federal funding.  Specifically, schools must agree that that it will not exclude, separate, deny benefits, or otherwise treat students differently on the basis of sex in its educational programs or activities unless Title IX so authorizes. Schools are required to treat transgender students according to the gender that they identify as soon as a parent or guardian notifies the district that the identity is different from previous records.

Much like the EEOC guidance pertaining to employers, the Departments do not require a medical diagnosis or treatment as a prerequisite to be considered transgender; they also explicitly state that accommodating the discomfort of others cannot be justified by excluding or singling out a particular class of students. The Departments provide specific guidance on sex-segregated activities and facilities and reiterate that schools may provide separate facilities (including housing) but must allow transgender student to access those which align with the gender that which the student identifies. Records must be kept consistent with the gender that which the student identifies with as well. There are some limitations. The Departments note that non-vocational elementary and secondary schools and private undergraduate institutions are permitted under Title IX to set their own sex-based admissions policies.

New York City Commission on Human Rights’ Transgender Guidance

On May 19, 2016, New York City’s Commission on Human Rights (NYCCHR) issued new guidelines requiring employers and landlords to implement transgender pronouns (“ze/hir”) as requested by transgender workers or tenants. Failure to comply may open organizations and individuals up to $250,000 in fines if that failure is motivated by malicious intent.

NYCCHR specifically notes that “harassment motivated by gender is a form of discrimination” and outlines examples of violation of its guidance in the context of failure to use an individual’s preferred name or pronoun, refusing to allow individuals to utilize single-sex facilities and programs consistent with an individual’s preferred gender, sex stereotyping, imposing different uniforms or grooming standards based on sex or gender, providing employee benefits that discriminate based on gender, considering gender when evaluating requests for accommodation, and engaging in discriminatory harassment and retaliation.

For more information regarding the EEOC’s Fact Sheet, related guidelines, and best practices with respect to transgender individuals in the workplace, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

Employers Face Exposure Under Title VII When Contracting For Temporary Workers

On November 18, 2015, the United States Court of Appeals for the Third Circuit allowed an employee of a temporary staffing agency to proceed with employment discrimination claims against a company to which the staffing agency assigned him.  In Faush v. Tuesday Morning, Inc., Docket No.14-1452 (3rd Cir. 2015), the Court found that for purposes of Title VII of the Civil Rights Act of 1964 (“Title VII”), the worker successfully established that he was an employee of the staffing agency’s customer.

In this case, the staffing agency directly employed the worker, and assigned plaintiff to a customer for a 10 day temporary assignment.  The worker claimed that the customer discriminated against him based on his race while performing his duties.  Plaintiff asserted claims against the customer under Title VII, which prohibits employers from unlawfully discriminating against employees.  The Court found that the customer exerted enough control over the manner in which the worker performed his duties, so that it became an employer under Title VII.

In reaching this determination, the Third Circuit applied a test called the Darden test, which focuses on “the hiring party’s right to control the manner and means by which the product is accomplished.”  This “right to control” is based upon a consideration of the following factors: 1) skill required to perform the job; 2) who provides the tools; 3) location of the work; 3) duration of the relationship between the parties; 4) whether the customer may assign additional projects to the worker; 5) the extent of the worker’s discretion on when and how long to work; 6) wages/method of payment; 7) the worker’s role in hiring and paying assistants; 8) whether the work performed is a part of the customer’s regular business; 9) whether the customer is in business; 10) whether employee benefits are provided; and 11) the tax treatment of the worker.

The Customer’s Control Over Wages.  Here, the staffing agency set the worker’s rate of pay, paid wages, paid payroll and social security taxes, and maintained workers’ compensation insurance for the worker.  The staffing agency’s customer, however, also shared some responsibilities in connection with the worker’s wages.  First, the customer was obligated to notify the staffing agency if any minimum wage was owed to the worker.  Second, the customer agreed to pay overtime charges.  Third, the customer also obligated itself to pay for any changes arising from an increase in the staffing agency’s costs for wages, taxes, and insurance for this worker.  Fourth, the customer paid the staffing agency for each hour worked by the worker, at an agreed upon hourly rate.  The Third Circuit found that this method of payment indicated the existence of an employment relationship between the worker and customer.  The Court reasoned that in an independent contractor relationship, the customer would have paid a fixed rate to the staffing agency.  Instead, the customer indirectly paid the worker’s wages, plus an administrative fee to the staffing agency.

The Customer’s Control Over Hiring and Firing.  The staffing agency hired the worker and assigned him to this particular customer.  However, the customer reserved the discretion to find this worker suitable for the assignment and could also demand a replacement worker.  Therefore, the customer essentially exercised discretion over hiring and termination decisions.

The Customer’s Control Over The Worker’s Daily Activities.  The customer delegated assignments to the worker, directly supervised him, trained him, furnished equipment and materials, and verified the time he worked.   The customer also managed the temporary worker in the same manner as its employees.  Moreover, the worker performed unskilled tasks, similar to those performed by the customer’s employees.  Finally, the customer assigned the temporary worker to one of its stores, as opposed to working in a location controlled by the staffing agency.

The Customer’s Treatment Of The Worker.  The customer itself characterized the worker as a temporary employee, not an independent contractor.  In addition, the customer committed to providing the worker with a workplace free from discrimination and unfair labor practices, and also committed to complying with all employment laws.  Thus, the Third Circuit found that these protections were similar to those offered by an employer.

Based on the customer’s control over the worker’s wages, hiring and firing decisions, and daily work activities, and based upon its treatment of the worker, the Third Circuit found that the worker could proceed with his claim that he was an employee of the customer under Title VII.

Employer’s Take-Away.  Hiring a temporary worker exposes employers to potential liability under the employment discrimination and wage and hour laws.  Carefully review agreements with staffing agencies to ensure that the worker is treated as an independent contractor and not an employee.  Employers also need to review their protocols for all contact and assignments with temporary workers to ensure that they are not treated in a manner similar to that of employees.

For more information regarding this decision and to learn if your company’s treatment of temporary workers exposes you to liability, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practices Group, at dmastellone@nullgenovaburns.com or Brigette N. Eagan, Esq., Counsel in the firm’s Human Resources Practices Group, at beagan@nullgenovaburns.com.

Third Circuit Rules A Paid Suspension Is Not An Adverse Employment Action

On August 12, 2015, the Third Circuit ruled that a suspension with pay does not constitute an adverse employment action within the meaning of Title VII of the Civil Rights Act of 1964 (Title VII) and the Pennsylvania Human Rights Act.  Title VII prohibits employers from “failing or refusing to hire, discharging, or discriminating against any individual with respect to compensation, terms, conditions, or privileges or employment, because of such individual’s race, color, religion, sex, or national origin.”  In Jones v. SEPTA, the plaintiff was suspended with pay in December 2010 by her employer, Southeastern Pennsylvania Transportation Authority (“SEPTA”) for apparent timesheet fraud.  After a lengthy investigation by SEPTA’s Office of Inspector General, the plaintiff was suspended with pay in February 2011, and formally terminated in April 2011.  In her complaint, the plaintiff alleged her termination was the result of years of unlawful sexual harassment, gender discrimination, and retaliation.  The District Court ruled for SEPTA and the plaintiff appealed.

On appeal, the Third Circuit agreed with the District Court’s finding that the plaintiff was unable to show that she suffered from an adverse employment precisely because paid suspension does not constitute an adverse action under Title VII.  The suspension neither changed compensation nor did it effect a “serious and tangible” alteration of the “terms, conditions, or privileges of employment.”  Thus, suspension with pay, without more, is not an adverse employment action under the substantive provision of Title VII.  Prior to this case, the Third Circuit had not decided the issue of paid suspensions.  Other federal circuit courts, however, have unanimously reached the same conclusion that placing an employee on paid administrative leave, where there is no presumption of future termination, does not constitute an adverse employment action.

The Third Circuit also held that both instances of the plaintiff’s suspension, paid and unpaid, failed to establish a violation of Title VII.  Moreover, because the suspension and subsequent termination were based on fraudulent activity by the employee and the organization’s investigation of the same, there was no causal relationship between her gender and the treatment by SEPTA.  Despite additional allegations that she was a victim of a hostile work environment, the plaintiff had not sought to employ any of the safeguards or other means of protection provided by SEPTA to formally file a complaint prior to the accusation of fraud.  As such, SEPTA was not be liable for informal or nonexistent claims of a hostile work environment.

Employers’ Takeaway:

  • Suspensions with pay do not constitute an adverse employment action and, therefore, are not viable claims under Title VII.
  • Employers should ensure that any suspensions or leaves of absences do not alter compensation or any terms, conditions, or privileges of employment.

For more information regarding this decision and best practices, please contact John C. Petrella, Director of the firm’s Employment Litigation Practice Group at jpetrella@nullgenovaburns.com or Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

Lactation and Breast-Feeding Are “Pregnancy Related Conditions” Protected Under Title VII

In EEOC v. Houston Funding II, Ltd., the Fifth Circuit issued a landmark decision finding that terminating a female employee because she is lactating or expressing milk is unlawful sex discrimination under Title VII of the Civil Rights Act of 1964 (as amended by the Pregnancy Discrimination Act of 1978) (PDA).  The Court also found that lactation is a medical condition related to pregnancy.

Donnica Venters (“Venters”) took a leave of absence to give birth, and subsequently asked her supervisor whether she could use a breast pump at work.  Instead of responding to her inquiry, Venters was told that she was being discharged for job abandonment.  The EEOC filed suit claiming that Houston Funding discriminated against Venters based on her sex, including her pregnancy, childbirth, or related medical conditions (citing the language from the PDA).  The Fifth Circuit agreed that terminating Venters simply because she is lactating or expressing breast milk constitutes sex discrimination, and that an adverse action “motivated by these factors clearly imposes upon women a burden that male employees need not – – indeed, could not – suffer.”

The Fifth Circuit held that lactation is a physiological condition distinct to women who have undergone pregnancy and childbirth, and that men, as a matter of biological fact, cannot lactate. As such, the Court held that lactation is included in the term “pregnancy related conditions” and protected by Title VII and the PDA.  Female employees, who are lactating and/or breast-feeding, may now bring claims under Title VII and the PDA.  Employers should also be aware that the Affordable Care Act already amended the Fair Labor Standards Act (FLSA) to require an employer provide “reasonable time for an employee to express milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk.”  Employers must take their obligation to provide time and space to express breast milk seriously and must also take caution when considering taking adverse action against such employees.  The EEOC has made pregnancy- related limitations one of its six national priorities to address in the context of equal employment law, so employers should critically analyze any request or inquiry from employees regarding pregnancy or post-pregnancy accommodations to avoid unnecessary negative liability.

For more information on the implications of the EEOC v. Houston Funding II, Ltd. decision and other sex and pregnancy policies and regulations in the workplace, please contact Dena B. Calo, Esq, dcalo@nullgenovaburns.com, Director of the Human Resources Practice Group and Partner in the Employment Law & Litigation Group, or Jane Khodarkovsky, Esq., Associate in the Employment Law & Litigation Group, at jkhodarkovsky@nullgenovaburns.com.