Employment Law Alerts

Federal
By Lee C. Durivage, Esq. (215-575-2584 or lcdurivage@mdwcg.com)

The Supreme Court Holds That The Enforceability Of A Delegation Provision In An Arbitration Agreement Was For An Arbitrator-Not A Court-Because The Employee Attempted To Challenge The Validity Of The Contract As A Whole.
Rent-a-Center, West, Inc. v. Jackson, 2010 U.S. LEXIS 4981 (June 21, 2010)

In Jackson, an employee filed an employment discrimination lawsuit against his former employer in federal court. His former employer, however, filed a motion to dismiss his complaint and to compel arbitration based upon an arbitration agreement that Mr. Jackson signed at the time he was hired. Specifically, the arbitration agreement provided for arbitration of all "past, present or future" disputes arising out of his employment, including "claims for discrimination." The agreement also provided that the arbitrator-and not a court-"shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement." Mr. Jackson opposed the motion to dismiss, arguing that the entire agreement was "clearly unenforceable in that it is unconscionable" under state law. In holding that Mr. Jackson's challenge to the validity of the contract on the basis of unconscionableness was for an arbitrator-and not a court-to decide, the Court noted that there were two types of validity challenges under the Federal Arbitration Act. First, there are challenges to the validity of an agreement to arbitrate and, second, there are challenges to a contract as a whole. Since the Court determined that Mr. Jackson challenged the contract as a whole, it reasoned that a party's challenge to a provision of the contract, or the contract as a whole, does not prevent a court from enforcing a specific agreement to arbitrate.

The Supreme Court Holds That A City's Search Of A Police Employee's Text Messages On A Government-Issued Pager Was Reasonable And, Therefore, Did Not Violate The Fourth Amendment.
City of Ontario, California v. Quon, 2010 U.S. LEXIS 4972 (June 17, 2010)

In Quon, the Supreme Court was tasked with determining whether a government employer's search of an employee's text messages was reasonable or in violation of the Fourth Amendment. There, the police department issued pagers to members of the department's SWAT team. The pagers had the ability to send or receive text messages, and the city's contract with the service provider limited the number of characters the pagers were permitted to use. Mr. Quon was advised on multiple occasions that he exceeded his monthly text message allotment, and Mr. Quon reimbursed the city for the overage. Following more incidents of employees' overage of the text message allotment, the department conducted a review of the employees' text message usage to determine whether the allotment should be raised. After redacting messages sent or received when Mr. Quon was off-duty, it was learned that Mr. Quon sent or received 456 messages during work hours during one month and no more than 57 were work-related. As a result, Mr. Quon was disciplined. In determining whether the city had violated the Fourth Amendment regarding unreasonable search and seizure, the Court acknowledged that a broad holding concerning employees' privacy expectation vis-à-vis employer-provided technological equipment might have future implications and, therefore, they assumed for this case only that (1) Mr. Quon had a reasonable expectation of privacy in the text messages and (2) the city's review constituted a search of the same magnitude as when a government employer searches an employee's physical office. Despite the assumptions, the Court held that the city did not violate the Fourth Amendment. In so holding, the Court reasoned that the search was motivated by a legitimate work-related purpose (i.e., determining whether they needed to raise the text message allotment) and was not excessive in scope (they only looked at a small sample of messages that were sent or received during work hours). The one question that the Supreme Court did not answer, however, was whether the government employer's internet/electronic usage policy-which informed the employee that such messages could be searched-would result in the employee not having a reasonable expectation of privacy in messages sent or received on a government-issued electronic device.

The Supreme Court Holds That The National Labor Relations Board's Delegation Clause Requires A Delegated Group To Maintain A Membership Of Three.
New Process Steel, LP v. Nat'l Labor Relations Board, 2010 U.S. LEXIS 4973 (June 17, 2010)

In New Process Steel, the Supreme Court determined that the National Labor Relations Board ("NLRB") did not have the authority to issue orders when the Board was comprised of only two members between January 2, 2008, through March 27, 2010. In 2007, there were four members of the NLRB and it anticipated two additional vacancies. As a result, the members delegated all of the Board's powers to a three-member group of the Board which, the NLRB opined, would allow the two remaining members to exercise the powers of the Board since two members would constitute a quorum. Following the expiration of the third member's term, the NLRB was left with two members and, over the next 27 months, decided close to 600 cases, including one involving New Process Steel. In reversing the decision of the NLRB, the Supreme Court held that following a delegation of the Board's powers to a three-member group, two members may not continue to exercise the delegated authority once the group's membership falls to two. In so holding, the Court reasoned that Congress could have used straightforward language if it intended to authorize two members alone to act for the Board on an ongoing basis, but it did not, and stated that the "Board quorum requirement and the three-member delegation clause should not be read as easily surmounted technical obstacles of little to no import." Moreover, the delegation clause "does not authorize the Board to create a tail that would not only wag the dog, but would continue to wag the dog after the dog died." The bigger question following the Supreme Court's decision is what will occur with the close to 600 cases decided by the NLRB during the period when NLRB likely did not have the authority to issue the decisions.

The Supreme Court Holds That A Disparate Impact Class May Challenge An Employer's Application Of A Practice, Despite The Fact That The Class Plaintiff Failed To Timely Challenge The Initial Adoption Of The Practice.
Lewis v. City of Chicago, 2010 U.S. LEXIS 4165 (May 24, 2010)

In Lewis, the City of Chicago administered a written examination in 1995 to applicants seeking firefighter positions. Following the examination, the city announced that it would randomly select candidates that it deemed "well qualified," based upon the candidate scoring at least 89 out of 100 on the examination. Candidates scoring between 65 and 88 were deemed "qualified" but were not initially selected for positions. Over the next six years, the city repeated this process several times, randomly selecting "well qualified" candidates from the 1995 examination. Six African-American candidates who were deemed "qualified" and not hired filed charges with the Equal Employment Opportunity Commission following the city's second selection of candidates were hired. The Supreme Court noted that setting aside the first round of selection, both parties agreed that the discrimination charges were timely and, therefore, the reason question "is not whether a claim predicated on that conduct is timely, but whether the practice thus defined can be the basis for a disparate-impact claim at all." With this, the Supreme Court held that the class claims did, in fact, support a disparate impact cause of action. The Court reasoned that a plaintiff establishes a prima facie disparate-impact claim by showing that the employer "uses a particular employment practice that causes a disparate impact" and the city "used" the "practice" of only selecting those whom it deemed "well qualified" in each round of its employment selections.

The Third Circuit Holds That Unsolicited Internal Complaints Are Not Protected Activities Under The Anti-Retaliation Provision Of The Employee Retirement Income Security Act Of 1974 ("ERISA").
Edwards v. A.H. Cornell & Son, Inc., 2010 U.S. App. LEXIS 12962 (3d. Cir. June 24, 2010)

In Edwards, the plaintiff alleged that she was terminated from her position as director of human resources after she "objected to and/or complained" to management about alleged ERISA violations. The district court granted the defendants' motion to dismiss and determined that the plaintiff's alleged objections or complaints to management were not part of an "inquiry or proceed" as required by the anti-retaliation provision of ERISA. In affirming the decision, the Third Circuit relied on the Fourth and Second Circuit decisions which, likewise, held that unsolicited complaints fail to support a retaliation claim under ERISA. Specifically, the plain meaning of the word "proceeding" implies a formal action has occurred and "inquiry" is generally defined as a "request for information" and neither definition encompasses an employee's unsolicited, internal complaint.

The Third Circuit Determines That Side Effects From Medical Treatment May Constitute An Impairment Under The Americans With Disabilities Act In Certain Circumstances.
Sulima v. Tobyhanna Army Depot, 602 F.3d 177 (3d. Cir. April 12, 2010).

In Sulima, the plaintiff filed a claim under the Americans with Disabilities Act ("ADA") following his termination from employment, arguing that the side effects of medications he was taking to treat his obesity and sleep apnea were "impairments" under the ADA. Specifically, the plaintiff alleged that his medications caused him to use the restroom frequently. Relying on the reasoning from the Seventh Circuit Court of Appeals, the Third Circuit determined that side effects from medical treatment may themselves constitute an impairment under the ADA. In so holding, the Court noted that it is not sufficient to show just the potentially disabling medication or course of treatment was prescribed or recommended by a licensed medical professional. Rather, the Court stated that the plaintiff must demonstrate that "the medication or course of treatment must be required in the 'prudent judgment of the medical profession,' and there must not be an available alternative that is equally efficacious that lacks similarly disabling side effects." With this test in mind, the Court upheld summary judgment in favor of the plaintiff's employer, noting that the plaintiff testified that his doctor recommended that he discontinue the medication and his doctor testified that if he knew of these side effects sooner, he would have stopped prescribing the medication altogether. As a result, the Court determined that the plaintiff failed to demonstrate that the medication was required "in the prudent judgment of the medical profession" to constitute an impairment under the ADA.

The Third Circuit Holds That The Americans With Disabilities Act Contemplated That Employers May Need To Make Reasonable Shift Changes In Order To Accommodate A Disabled Employee's Disability-Related Difficulties In Getting To Work.
Colwell v. Rite Aid Corp., 602 F.3d 495 (3d. Cir. April 8, 2010)

In Colwell, the plaintiff brought suit against her former employer, alleging that she was constructively discharged in violation of the Americans with Disabilities Act ("ADA") after her store manager failed to allow her to work exclusively during the day. There, after the plaintiff was hired and began working night shifts, she was diagnosed with retinal vein occlusion and glaucoma, leaving her blind in her left eye. Despite acknowledging that she needed no accommodation to perform her job functions, the plaintiff requested that she be switched to "day shift" as her condition rendered her unable to drive in the evenings. After the store manager was unable to schedule her exclusively during the day, the plaintiff resigned her position and filed her ADA lawsuit, alleging that her employer failed to accommodate her disability and constructively discharged her. In dismissing the plaintiff's complaint, the lower court held that "the ADA and the regulations that implement it do not require an employer to provide an employee with an accommodation that facilitates her commute to work" and further determined that she was not constructively discharged.

On appeal, the Third Circuit upheld the lower court's decision that the plaintiff was not constructively discharged. The Third Circuit, however, reversed the determination that the employer had no duty to accommodate the plaintiff's request for a shift change and held "as a matter of law that changing [plaintiff's] working schedule to day shifts in order to alleviate her disability-related difficulties in getting to work is a type of accommodation that the ADA contemplates." As a result, the Third Circuit remanded the case back to the district court "for the jury to decide whether a shift change was a reasonable accommodation under the circumstances."

By Lawrence Berg, Esq. (856-414-6031 or lbberg@mdwcg.com)

The Failure To Accommodate May Be An Act That Proves Discrimination In A Disability Discrimination Claim.
Marazzo v. Mercer Cty. Bd. of Soc. Ser., Docket No. A-5885-08T1 (App. Div. May 13, 2010)

The plaintiff had a history of depression and was taking medicine which made her fall into a deep sleep and from which she had difficulty awakening in the morning. The plaintiff sought permission to report to work 15-30 minutes late and to be allowed to make up the lost time by working over lunch, through her break or in the evening. Even though the request was supported by both the plaintiff's treating physician and the County's physician, the accommodation request was denied. In overturning an Order of dismissal, the Appellate Court concluded that once a facial showing of a disability had been made, the County's failure to engage in any effort to evaluate the accommodation request was sufficient evidence of discrimination to warrant submission of the matter to a jury.

Employer May Not Access Employee's Private, Password Protected E-Mail Account On Work Computer.
Stengart v. Loving Care Agency, Inc., Docket No. A-16-09 (NJ Sup. Ct., March 30, 2010)

The plaintiff filed suit alleging constructive discharge, retaliation and harassment based on gender and national origin. In anticipation of discovery, the employer had accessed the plaintiff's work laptop and discovered certain temporary internet files, including e-mails between the plaintiff and her attorney. The e-mails were on the plaintiff's private, password protected e-mail account on Yahoo. The Supreme Court concluded that the e-mails constituted attorney-client privileged communication and that the fact that they were on the employer's computer did not deprive them of this status. The Court concluded that the employee could reasonably have an expectation of privacy even though the communication took place on the work computer.

Failure To Renew Employment Can Be Akin To Discharge.
Nini v. Mercer County Comm. College, Docket No. A-13/14-09 (NJ Sup. Ct., June 1, 2010)

After working for the college for 26 years, and under a number of consecutive contracts, the plaintiff was advised that her contract of employment would not be renewed. The plaintiff filed a lawsuit under the New Jersey Law Against Discrimination alleging age discrimination; however, the Complaint was dismissed by the trial court based upon a finding that the protections afforded by the LAD did not apply to hiring decisions for persons over the age of 70. In reversing this decision, the Supreme Court concluded that the non-renewal of employment was not the same as a decision not to hire a new employee and, therefore, the age limitation did not apply.

Deliberative Process Privilege Does Not Apply To Document Requests In Employment Related Claims.
Shanahan v. New Jersey Transit, Docket No. ESX-L-7409-08 (Law Div., Feb. 5, 2010)

The plaintiff alleged sex and sexual orientation discrimination and retaliation stemming from her employment with New Jersey Transit. In discovery the plaintiff sought various reports prepared by New Jersey Transit concerning the analysis of employment data and hiring patterns. New Jersey Transit refused to produce the records and asserted that the reports contained opinions, recommendations and deliberations comprising part of a process by which decisions and policies are formulated and that disclosure would impede New Jersey Transit's ability to effectively manage its affairs. In compelling the production of the reports, Judge Vena concluded that the Deliberative Process Privilege did not apply to claims alleging employment discrimination absent a particularly strong showing of limited relevance or the inclusion of highly sensitive material.