Religious Practices that Discriminate Because of Gender

Consider the following scenario:

You have recently hired a male employee.  When you are introducing him to his co-workers, an African-American co-worker offered her hand to greet him but he refused to shake hands. The new employee explained that he did not touch women because of his Muslim religion. When a human resources manager spoke with him about the incident, the new employee said that it was the co-worker’s female gender, not her race, which prompted his response.

What do you do?  You have an obligation to accommodate the new employee's religious practices but you also have to make sure that his religious practices do not create a hostile environment for women.

This scenario was presented to the EEOC for an opinion last year.  The EEOC's associate general counsel  responded by letter in an "informal" (non-binding) opinion.  Her answer was to say it depends on what is an undue hardship under the religious discrimination principles of Title VII:

• courts have found, and the Commission has stated, that encroaching on co-workers’ ability to perform their duties or subjecting or threatening to subject co-workers to a hostile work environment “will generally constitute undue hardship.
• a showing of undue hardship requires more than speculation about negative consequences or expressions of discomfort, irritation, or annoyance by co-workers.

What if the newly hired employee is a sales person?  Can the employer consider customer offense in deciding whether the new employee's refusal to shake hands with a woman is an undue hardship?

• The courts also are inclined to find undue hardship if the employee’s religious expression can be perceived by customers as the employer’s own message.

The employer, the EEOC said, should evaluate the actual impact the new employee has.  If he "conveys negativity about women" (or conveys "an intent to demean based on gender") then the employer can take action but if he get along fine with women, they should not.  The same rule would apply to interactions with co-workers.  

When an employer is faced with what we can call the "no win" scenario, there are at least two key points to remember.  

• I have never heard of a court criticizing or punishing an employer for providing appropriate training to its employees.  Bad training, of course, is a different story.
• It is far better to document observations than to make conclusory statements.  If you are like me, and don't well recall details, writing down what you observe ("just the facts") is crucial.  Getting in court and simply saying, to use this scenario as an example, the new guy didn't get along with women because of his religion, is only going to increase the fees you pay your attorney.

New Regulations to Look for From the EEOC

On Monday, December 7, 2009, a number of federal agencies issued their "regulatory plans." A law called the Regulatory Flexibility Act requires agencies publish semiannual regulatory agendas in the Federal Register describing regulatory actions they are developing that may have a significant economic impact on a substantial number of small entities. These take two forms, a Regulatory Plan and a Regulatory Agenda, with the Regulatory Plan being a list of the most significant regulations the agency expects to issue in some form at some point in the future. The Regulatory Agenda/Plan are not used for announcing new rules (or pending rules). Rather, it is a complete list of what to expect from the agency.

The Agenda and Plan for each federal agency can be found at reginfo.gov. The site then links to the "Regulation Identifier Number" or "RIN" for the regulatory action.

The EEOC doesn't issue a great number of regulations. Half of the regulations under consideration are intended to modify existing regulations to conform to or clarify the effect of Supreme Court decisions. The other half implement new Acts of Congress.

One proposed rule the EEOC expects to issue will address "Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act." The EEOC describes the rule it is considering as:

On March 31, 2008, the EEOC published a Notice of Proposed Rulemaking (NPRM) concerning disparate impact under the Age Discrimination in Employment Act. 73 FR 16807 (March 31, 2008). In addition to requesting public comment on the proposed rule, the Commission asked whether regulations should provide more information on the meaning of "reasonable factors other than age" (RFOA) and, if so, what the regulations should say. After consideration of the public comments, and in light of the Supreme Court decisions in Smith v. City of Jackson, 544 U.S. 228 (2005), and Meacham v. Knolls Atomic Power Lab., 554 U.S. ___, 128 S. Ct. 2395 (2008), the Commission believes it is appropriate to issue a new NPRM to address the scope of the RFOA defense. Accordingly, before finalizing its regulations concerning disparate impact under the ADEA, the Commission intends to publish a new NPRM proposing to amend its regulations concerning RFOA.

On a related matter, the EEOC also expects to issue a final rule addressing the "Disparate Impact Burden of Proof Under the Age Discrimination in Employment Act." The EEOC explained:

the EEOC is revising this regulation [29 CFR 1625.7(d)] to conform to both Smith and Meacham. In the March 2008 NPRM, the Commission also asked whether its ADEA regulation should provide more information on the meaning of RFOA and, if so, what the regulations should say. After consideration of the public comments, and in light of the Supreme Court decisions in Smith and Meacham, the Commission believes it is appropriate to issue a separate NPRM to address the scope of the RFOA defense. This new NPRM will be titled "Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act." A Final Rule to be issued in October 2010, will cover the issues addressed in both NPRMs.

The EEOC expects to issue the RFOA and Disparate Impact rules in October. It will first, however, issue a proposed rule on the RFOA.

Turning to the ADA Amendments, I posted in September that the EEOC had issued a proposed rule on the new definition of "disability" added by the 2008 Amendments. The EEOC describes the regulatory action as:

The Americans With Disabilities Act Amendments Act of 2008 ("the Amendments Act") was signed into law on September 25, 2008, with a statutory effective date of January 1, 2009. EEOC proposes to revise its Americans With Disabilities Act (ADA) regulations and accompanying interpretative guidance (29 CFR part 1630 and accompanying appendix) in order to implement the ADA Amendments Act of 2008. Pursuant to the 2008 amendments, the definition of disability under the ADA shall be construed in favor of broad coverage to the maximum extent permitted by the terms of the ADA, and the determination of whether an individual has a disability should not demand extensive analysis. The Amendments Act rejects the holdings in several Supreme Court decisions and portions of EEOC's ADA regulations. The effect of these changes is to make it easier for an individual seeking protection under the ADA to establish that he or she has a disability within the meaning of the ADA.

The EEOC expects to issue the final rule in July.

Finally, the other significant regulation to look for will concern the Genetic Information Nondiscrimination Act ("GINA"). The EEOC issued a proposed rule in March but unfortunately failed to issue a final rule before GINA took effect on November 21, 2009. According to the agenda, the final rule should be issued this month.

I will try to cover the DOL's Regulatory Agenda/Plan in a later post.

EEOC's Proposed Rule on the 2008 ADA Amendments

The Federal Register version of the EEOC's proposed rule on the ADA Amendments of 2008 is now available. As with any proposed rule, anyone is entitled to comment.

One of the easiest ways to comment is through www.regulations.gov (docket EEOC-2009-0012). The nice thing about regulations.gov is that it is not just a way to submit comments, users can also pull up other comments.

As of now, the final comment date is November 23, 2009 (this is sometimes but not always extended). Comments complaining about the changes Congress made will fall on deaf ears. The EEOC has no authority (or inclination) to overrule Congress' decision to broaden the scope of coverage under the ADA by legislatively overruling supreme court decisions.

On the other hand, showing how the proposed regulations will impact (adversely or positively) your business is always fair game. Pointing out ambiguities in the wording is also fair and important.

A later post will address some of the EEOC's proposals.

EEOC Issues Notice of Proposed Rules under 2008 ADA Amendments

Today, shortly before lunch, the EEOC announced that it would issue a "notice of proposed rulemaking" (NRPM) that will conform the existing ADA to the changes made by the ADA Amendments Act of 2008.

I previously posted on most of the ADA amendments and on the "regarded as" changes.

The NPRM should be formally issued next week. I'll post a link to the formal notice in the federal register then.

The EEOC posted a Q and A section on its website. The EEOC Announcement about the NPRM is also available. The Q and A illuminates some of the issues but doesn't say much more than what is in the statute. One key question was how would the EEOC define when an impairment substantially limits a major life activity. The Q and A simply (and unhelpfully) states that the

determination of whether an individual is experiencing a substantial limitation in performing a major life activity is a common-sense assessment based on comparing an individual’s ability to perform a specific major life activity (which could be a major bodily function) with that of most people in the general population.

Arbitrating Discrimination Claims

I was modestly surprised by the Supreme Court's arbitration decision this week. In 14 Penn Plaza LLC v. Pyett, the Supreme Court held that "a collective-bargaining agreement ["CBA"] that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law." I had expected (assumed is more like it) the Court would do what it had previously done, find some way to avoid addessing the main issue. Let's start with some history.

In Alexander v. Gardner-Denver Co., 415 U. S. 36 (1974), the Supreme Court held that a union employee could pursue a Title VII claim even though the employee had already lost an arbitration at which the parties had disputed the same facts presented in the race discrimination claim. In its decision the Court distinguished between "contractual and statutory rights" and stated that "there can be no prospective waiver of an employee's rights under Title VII." This meant, to the "lower" courts, that employees could both arbitrate their contract rights under the CBA and pursue their discrimination claims with the EEOC and in court.

Subsequent decisions from the Supreme Court, however, undermined Alexander's statement that the discrimination statutes prohibited arbitration of discrimination claims. Those decisions, however, construed individual employment contracts, not collective bargaining agreements and for some time, the Supreme Court seemed content to permit the "tension" (the term a court uses to say "our decisions are not logically consistent") between individual arbitration agreements and CBA arbitration agreements.

Then, some 11 years ago, in Wright v. Universal Maritime Service Corp., 525 U.S. 70, 82 (1998), the parties raised the same issue decided in Penn Plaza. The Court ducked the issue, however, because clause in the CBA was not "clear and unmistakable." So even if an arbitration clause in a CBA could include discrimination claims, the clause in Wright would fail the clear and unmistakable standard primarily (but not only) because it required arbitration of "matters in dispute," did not explicitly incorporate any statutory antidiscrimination requirement or even have a no discrimination clause in the bargaining agreement. Picking up on these points, the Sixth Circuit in Kennedy v. Superior Printing Co., 215 F.3d 650, 654 (6th Cir. 2000), held that a "general anti-discrimination provision [in a bargaining agreement] that prohibits various forms of discrimination against employees" does not force union employees to arbitrate discrimination claims where the arbitration clause only applied to the interpretation of the contract and did not specifically require arbitration of discrimination claims. And in Bratten v. SSI Servs., Inc., 185 F.3d 625, 631 (6th Cir. Tenn. 1999), the court held that where the CBA arbitration clause "does not mention statutory claims, but only states in boilerplate fashion that it applies to "any grievance arising under the terms of this contract or an alleged violation thereof" was not a sufficient waiver of statutory rights.

The clause in Penn Plaza squarely presented the issue because it not only prohibited discrimination and listed the relevant state and federal discrimination statutes by name, it then said (in the no-discrimination clause) that "All such claims shall be subject to the grievance and arbitration procedures . . . as the sole and exclusive remedy for violations." The clause was, in fact, so clear that the employees' never argued that it was not a clear and unmistakable waiver until they filed their merits brief in the Supreme Court.

So the practical question employers should ask, after Penn Plaza, will be whether or not the no-discrimination clause or the arbitration clause contains a clear and unmistakable waiver of the right to pursue statutory discrimination claims in federal court. What Penn Plaza does is remove the final hurdle to this inquiry by saying that a CBA can, if sufficiently clear, require employees and employers to arbitrate discrimination claims. Penn Plaza does leave open the possibility that there may be some statutes which might prohibit arbitration but, so far, those statutes do not include Title VII, the ADEA or the ADA. Neither does USERRA, but there is a bill pending in Congress (H.R. 1474) which would prohibit arbitration of USERRA claims unless the agreement to arbitrate arises after the "dispute arises." Even here, the bill provides that the prohibition on arbitration does not "preclude the enforcement of any of the rights or terms of a valid collective bargaining agreement." And whether Congress might act to legislatively overturn the Penn Plaza decision remains to be seen.

So what does a CBA have to say to require (or not) discrimination claims be arbitrated? The clause in Penn Plaza is the clearest example. On the other extreme, Wright says a general "all disputes" arbitration clause is not enough. The Sixth Circuit decisions I mentioned earlier hold that unless the CBA specifically says (at a minimum) that discrimination claims are subject to the arbitration clause, they are not sufficient. Also, the decisions might be construed to say that a CBA arbitration clause must not just mention "age discrimination" claims (for example) but must also specifically mention the statute (the "Age Discrimination in Employment Act") in question. I am not so sure that it makes sense to require the statute be mentioned. Think about it, if your clause says that all rights protected by "Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e" must be arbitrated, that is not as informative (to a non-lawyer) as telling employees that all claims for race, sex, national origin and religious discrimination must be arbitrated. But, as the contract lawyers in my firm constantly say, when you draft a contract you use the language that you know works.

And remember, to quote the Penn Plaza decision, "[u]nion members may also file age-discrimination claims with the EEOC and the National Labor Relations Board, which may then seek judicial intervention under this Court's precedent. See EEOC v. Waffle House, Inc., 534 U. S. 279, 295–296 (2002)." In other words, no matter how clear the arbitration clause is, it will not prevent the EEOC or the NLRB from investigating or litigating a discrimination or NLRA claim against an employer (or union).

The Attitude of EEOC Counsel

I recently posted about a Seventh Circuit decision that held an employer that settles a charge of discrimination must still comply with an EEOC subpoena. As I said there, the employer stood on principles and lost only because agencies have power that, while not absolute, is substantial and courts have no basis, short of a showing that the EEOC request is unduly burdensome or otherwise inappropriate, to refuse enforcement. It is better, I said, to cooperate even if you are sure you are right.

I should rest on my prior comments about the decision. After all, it is a pretty unique situation and not likely to re-occur. I can't held but comment, however, on the EEOC's press release about the decision (I will explain why in a minute). The EEOC quotes its lead attorney in the case as cautioning:

• Some recalcitrant employers and their counsel attempt to avoid accountability for employment discrimination through adoption of what they consider effective counter-strategies. Such strategies may include filing lawsuits against those who complain of discrimination, conducting endless discovery so as to draw out litigation for years, and, as in this case, getting one or two possible victims of the discrimin­ation which may have been visited upon a class to cut a quick and often cheap deal. Those strategies are, in the final analysis, never really effective against the EEOC. We’re pleased to see that point made once again made so forcefully in this important decision by the Seventh Circuit. (My emphasis.)
  

Remember, this is the case where the employer implemented a policy of refusing to hire anyone who had been convicted of a violent crime after two of its employees were murdered in violent confrontations in the workplace. The employer didn't ban applicants simply because of prior arrests, it didn't ban applicants because of prior convictions, its policy focused on convictions for violent crimes.

The decision, moreover, made it clear that the EEOC was not investigating a case of intentional discrimination. The EEOC was looking to see whether the policy was unintentionally discriminatory, on the assumption that some races might be more heavily impacted by the policy than others. Now, I am prepared to assume that the employer's practice might have led to a statistical disparity merely because there are more minorities than non-minorities convicted of violent crimes. (To know for sure, we would have to look at several factors and that isn't the point of this post.)

Even if there is a disparity, as the court recognized at oral argument and in its decision (both available through this page) there is a substantial question as to "whether the EEOC is acting prudently by devoting time of both its staff and Watkins to shortlived practices by an entity that is no longer an operating company, and whose rule may well be amply supported by 'business necessity' given its history of workplace violence."

So, the clear message the EEOC's counsel (and the reason I am saying something further here) is sending employers is that the EEOC presumes you are trying to undermine your employee's rights. Even when you are trying to protect your employees from workplace violence, the agency stills believes you are out to do the wrong thing toward your employees.

I am not saying the agency should blindly trust employers and forgoe discrimination investigations. Simply that, if you are ever inclined to think that the EEOC investigator is "your friend," don't. They aren't.