Supreme Court Decisions

IN THE NEWS – CHURCH SCHOOL’S RIGHT TO FIRE “CALLED” TEACHER UPHELD OVER CLAIMS OF DISCRIMINATION UNDER ADA

In a January 11, 2012 ruling, the U.S. Supreme Court held that under the “ministerial exception” to employment discrimination laws, grounded in the First Amendment, a “called” teacher fired by a Lutheran school could not challenge her termination as a violation of the American With Disabilities Act (“the ADA”).

The Plaintiff, Cheryl Perich, was employed as a teacher at a school run by Hosanna-Tabor Evangelical Lutheran Church and School, a member of the Lutheran Church Missouri Synod. Under the Synod’s rules, there are two types of teachers: “called” teachers and “lay” teachers. Although both types of teachers perform basically the same duties, called teachers must complete a course of theoretical study at a Lutheran college, pass an oral examination by a faculty committee, and be accepted by the church’s congregation as a called teacher. The teacher then receives the formal title “Minister of Religion, Commissioned.” Lay teachers are only hired by schools in the Synod when called teachers are not available.

Perich became a called teacher, and was employed by Hosanna-Tabor for a number of years. She then was diagnosed with narcolepsy, and took a medical leave of absence. When her physician cleared her to return to work, however, her employer advised her that a lay teacher had already been hired to finish out the year, and that she could not return at this time. The congregation of the church voted to offer her a “peaceful release” from her call, which included paying a portion of her health insurance premiums in return for her resignation. Perich refused to resign. She hired an attorney and demanded that she be reinstated in her position. Hosanna-Tabor responded by telling her she would likely be fired if she wouldn’t resign. She said she intended to “assert her legal rights,” and was terminated immediately thereafter.

The EEOC filed a lawsuit on behalf of Perich claiming that she had been wrongly terminated in violation of the ADA based on her disability, and in retaliation for exercising her rights under the ADA. Hosanna-Tabor argued that under the First Amendment the courts could not interfere with the employment relationship between a religious institution and one of its ministers.

The First Amendment provides, in relevant part, that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” According to Hosanna-Tabor, Perich had been fired for a religious reason – namely, her threat to sue the church, which was inconsistent with the Synod’s belief that disputes between Christians should be resolved internally.

In its ruling, the Supreme Court did not focus on whether the decision to terminate Perich was based on the purported violation of the Synod’s alleged religious tenet of resolving disputes internally, or whether she was terminated due to her disability. Rather, the Court held that analysis irrelevant, because “[r]equring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By employing an unwanted minister, the state infringes the Free Exercise Clause [of the First Amendment], which protects a religious group’s right to shape it’s own faith and mission through it’s appointments. According the state the power to determine which individuals will minister to the faithful also violates the Establishment Clause [of the First Amendment], which prohibits government involvement in such ecclesiastical decisions.”

The Supreme Court concluded: The case before us is an employment discrimination suit brought on behalf of a minister, challenging her church’s decision to fire her. Today we hold only that the ministe­rial exception bars such a suit.” In reaching it’s decision, the Court rejected arguments that term “minister” should be more narrowly defined to include only the head of a religious organization.

The interesting thing about this case is that it did not involve a direct conflict between discrimination law and church doctrine. It was not, for example, a challenge to the right of the Catholic church or an Orthodox Jewish seminary to ordain only men as priests and rabbis, respectively. Nor did it involve the right of a religious school to hire only individuals of the same faith. Rather, the factual circumstances in this case centered on whether a disabled employee could be refused reinstatement and ultimately fired under circumstances which, in the secular world, would constitute a violation of the ADA.

Indeed, the EEOC argued in this case that such a decision would open to door to widespread employment discrimination, including possible violations of everything from Whistleblower statutes protecting those who expose illegal activity, to child labor laws.

The Court dismissed those arguments as unduly alarmist, noting “[w]e express no view on whether the exception bars other types of suits, including actions by employees alleging breach of contract or tor­tious conduct by their religious employers. There will be time enough to address the applicability of the exception to other circumstances if and when they arise.”

IN THE NEWS – WALKING THE TIGHTROPE – SUPREME COURT DECISION RAISES QUESTIONS FOR BUSINESSES ON TITLE VII COMPLIANCE

On Monday, June 29, the Supreme Court decided a hotly debated case attempting to reconcile the dual prohibition in Title VII of the Civil Rights Act against “disparate treatment” discrimination and “disparate impact” discrimination. Disparate treatment discrimination is the intentional different treatment of an individual or group of individuals in the workplace based on their race, color, religion, sex or national origin. Disparate impact discrimination occurs when a facially neutral employment practice has a disproportionally negative effect on the members of one of these protected classes. Title VII also provides, however, that liability for disparate impact discrimination does not exist if the employer can show that its practice was “job related for the position in question and consistent with business necessity.”

An example of the type of policy that has been upheld in prior cases under the disparate impact analysis would be weight and height requirements for firefighters – although those minimum requirements have a disparate impact on female job applicants, they are job related and consistent with business necessity, as the job requires the physical ability to carry an unconscious person out of a burning building. An example of a policy that failed the disparate impact analysis was a particular employer’s requirement that all job applicants have a high school diploma. This policy disproportionately eliminated minority applicants, but there was no evidence that having graduated high school bore any relationship to the ability to perform the job duties.

The case decided today, Ricci v. DeStefano, involved the use of a written and oral test to determine the eligibility of firefighters in the city of New Haven, Connecticut, for promotion. Under the City’s rules, an available promotion to captain or lieutenant could only be offered to individuals with the top three highest scores. The City and the consulting firm it hired to develop the test apparently went to great lengths to design a test that had content relevant to the job, and was nondiscriminatory. Nonetheless, when the test results were in, a disproportionate percentage of black and Hispanic employees taking the test scored lower than white employees taking the test. A public debate ensued and, ultimately, the City threw out the test results to avoid violating the disparate impact prohibitions of Title VII. A group of white and Hispanic employees who received high scores on the test and would likely have been eligible for promotion filed suit, claiming that discarding the test results based solely on a statistical analysis of the racial outcome constituted disparate treatment discrimination against them.

The U.S. Supreme Count (in a narrow 5-4 decision) held that by throwing out the test results the City failed to correctly apply Title VII’s disparate impact analysis – specifically, whether the test was job related and consistent with business necessity. After reviewing the testimony and other evidence presented at trial as to the content of the test and the steps undertaken by the consulting company to create it, the Court concluded that the test was job related and that there was no equally valid, less discriminatory alternative that the City had refused to adopt. Accordingly, in the words of the Court, there was no “strong basis in the evidence” to conclude that the City would have been liable for disparate impact discrimination if it had allowed the test results to stand. Therefore, the City’s conduct amounted to disparate treatment discrimination against the firefighters whose high scores were disregarded.

The challenge for employers in the aftermath of this decision is to find a balance between eliminating facially neutral policies that have a disparate impact on minority workers without inviting allegations that the very act of removing such policies itself discriminates against nonminority workers based on race. Great care should be taken to avoid implementing any employment practices that could have a disparate impact in the first place. Of course, as the City of New Haven discovered, it’s not always possible to predict whether a disparate impact will occur.

The financial consequences of a misstep can be devastating to a business. The New Haven firefighters test at issue in the case was administered to employees in 2003. The results were thrown out shortly thereafter, and six years of costly litigation ensued.

IN THE NEWS – SUPREME COURT TAKES ON RETALIATION ISSUE

A significant employment law case involving retaliation under Title VII is on the docket for the U.S. Supreme Court, which opened its 2008-2009 term on October 6. Oral arguments will be heard on the case of Crawford v. Metropolitan Gov’t of Nashville. In that case the Sixth Circuit Federal Appeals Court held that an employee who is fired in retaliation for statements made during a company’s internal investigation of sexual harassment allegations falls outside the protection of Title VII.

In the underlying case, Plaintiff Vicky Crawford claimed that she was fired because of statements she made to the company’s H.R. representative when Crawford was questioned about sexual harassment allegations another employee had made against Crawford’s supervisor. Crawford was not the employee who made the original complaint. However, when called into H.R. and questioned, she confirmed that she too had been sexually harassed by the supervisor.

Crawford was fired shortly thereafter, and filed a lawsuit claiming retaliatory discharge in violation of Title VII, which prohibits retaliation against an employee because that employee “has opposed any practice made an unlawful employment practice by this subchapter [of Title VII],” or because the employee “has made a charge, testified, assisted or participated in any manner in an investigation, proceeding, or hearing under this subchapter.”

The court in the Crawford case held that even if Crawford’s employer fired her in retaliation for statements she made in the company’s internal investigation, that investigation was not an investigation “under this subchapter” because it was purely internal. In other words, no EEOC complaint had been filed, nor was any lawsuit pending.

That outcome, though counterintuitive at first blush, does have a certain logic behind it. The court in Crawford reasoned that if Title VII’s retaliation protection were extended to cover every internal investigation conducted regardless of whether any formal charges had been filed, employers would be less likely to conduct full investigations based solely on internal complaints for fear that they would be blanketing every employee interviewed with immunity from firing. And indeed, it is not difficult to imagine situations where nonperforming employees could take advantage of the fact that their supervisor has been accused by another employee and attempt to shield themselves from disciplinary action by confirming completely baseless allegations.

Employee advocates and some academics, on the other hand, view the outcome in Crawford as having a profound chilling effect on the willingness of employees to speak truthfully about a supervisor’s harassment if interviewed by H.R., rendering the company’s investigation completely ineffectual, and impeding the employer’s legitimate objective of ridding the workplace of sexual harassers.

It will be interesting to see how the Supreme Court rules on this case.

IN THE NEWS – SUPREME COURT RULING PUTS THE BURDEN ON EMPLOYERS TO PROVE POLICIES IMPACTING OLDER WORKERS ARE “REASONABLE”

In a decision hailed by employee advocates as a triumph, the U.S. Supreme Court ruled yesterday that in age discrimination cases the employer bears the burden of proof that employment decisions having a “disparate impact” on older workers are based on a reasonable factor other than age.

Three years ago, in March 2005, the Supreme Court ruled in the landmark case of Smith v. City of Jackson that the Age Discrimination in Employment Act (“the ADEA”) protects workers when an employer implements a policy which, on its face, has nothing to do with age, but in practice disproportionately impacts employees over age 40 in a negative way. (Notably, this marked a significant change for Florida employers because until that ruling, federal courts in Florida had held that the “disparate impact” theory was not applicable to age discrimination cases. To win a case, an ADEA plaintiff had to prove the employer’s alleged discriminatory policy was intended to harm older workers.) In Smith the Supreme Court held that such claims were in fact actionable under the ADEA, but did give the employer a “safe harbor” for their policies. Once an employee was able to show that the policy did in fact have a disparate impact, the employer could avoid liability by bringing forward evidence that the policy was based on “reasonable factors other than age,” a standard referred to by the Court as “RFOA.”

By requiring only an RFOA in the Smith case, the Court gave employers an advantage they did not have in disparate impact cases that traditionally arose in the contest of sex discrimination claims under Title VII of the Civil Rights Act. It has long been held that to avoid liability for a policy that has a disparate impact against a protected class under Title VII, the employer must show that the job requirement is a “bona fide occupational qualification,” referred to as a “BFOQ.” The classic examples in those early cases were height and weight restrictions which disproportionately excluded women from jobs as firefighters, but were held to be BFOQ’s because a certain minimum height and weight was deemed necessary to the ability to carry an overweight, unconscious victim out of a burning building. By interpreting the ADEA as requiring a lesser standard – the reasonableness standard of the RFOA instead of the absolute job necessity standard of the BFOQ – the Court made it much easier for an employer who was not intentionally discriminating to defend policies that had a disparate impact on older workers, so long as those policies were otherwise reasonable.

The question that remained after the Smith decision, however, was what happened procedurally after the employer brought forward evidence of the RFOA? To prove discrimination, did the employee have to prove that the employer’s asserted justification for the policy was in fact unreasonable? Or did the employer have the burden of proving that it was reasonable? While this distinction may appear at first blush to be a minor question of semantics, the question of who has the burden of proof can drastically change the outcome of a trial.

Until yesterday, federal courts were split on this issue. The Supreme Court has now resolved the question in Meacham v. Knolls Atomic Power Laboratory, holding that the employer must not only bring forward evidence that its policy was based on an RFOA, but also prove that the factor relied on is a reasonable one.

What this case means as a practical matter for employers is that care should be taken to examine any policies that appear to disproportionately impact older workers, and be prepared not merely to articulate a reasonable, nondiscriminatory basis for that policy but also to prove that the policy is reasonable.