Do employers have to win on the merits to recover attorney’s fees?

On May 19, 2016, the U.S. Supreme Court considered whether an employer must win an employment discrimination case on the merits in order to recover attorney’s fees. In CRST Van Expedited, Inc. v. EEOC (2016) ___U.S.___ [___L.Ed.2d___], the high court interpreted a federal law allowing trial courts to award fees to “the prevailing party.”

In this case, the employer is a trucking company that has a required training program. In 2005, a new female driver filed a charge of dis­crimination with the Equal Employment Opportunity Commission alleging that two male trainers sexually harassed her during a training trip.

The Commission filed a case on behalf on the female driver and other similarly situated women. The trial court dismissed the Commission’s pattern-or-practice claim. Next, the trial court ruled that claims on behalf of all but 67 of the women were barred on a variety of grounds. Finally, the trial court prevented the Commission from seeking relief for the remaining 67 women on the ground that the Commission had not satisfied its pre-lawsuit obligations to investigate and conciliate.

The trial court then dismissed the case, decided that CRST was a prevailing party, and awarded CRST its attorney’s fees based on the failure to investigate and conciliate. A Court of Appeals reversed that decision on grounds that before an employer can be a prevailing party there must have been a favorable judicial determination on the merits. That appellate decision conflicts with decisions of three other Courts of Appeals.

The Supreme Court reviewed the section of the federal employment discrimination law (Title VII) that authorizes an award of attorney’s fees. “In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the [Equal Employment Opportuni­ty] Commission or the United States, a reasonable attorney’s fee (including expert fees) as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person.” Accordingly, before deciding whether to award attorney’s fees a court must determine whether the party seeking fees has prevailed.

The Supreme Court reviewed previous decisions finding that the critical factor for the prevailing party question is the material alteration of the legal relationship of the parties. When an employee wins a judgment on the merits or a court-ordered consent decree, that employee is the prevailing party because she has received a judicially sanctioned change in the legal relationship of the parties. The high court noted, however, that it had not set forth in detail how courts should determine whether an employer has prevailed.

The Supreme Court found that common sense undermines the notion that an employer cannot “prevail” unless it wins on the merits. The parties come to court with different objectives: an employee seeks a material alteration in the legal relationship between the parties; an employer seeks to prevent this alteration to the extent it is in the employee’s favor. The employer might prefer a judgment vindicating its position regarding the merits of the employee’s allegations. But the employer fulfills its primary objective whenever the employee’s challenge is rebuffed, even if the court’s final judgment rejects the employee’s claim for a non-merits reason.

The Supreme Court also determined that Congress did not intend that employers can only recover attorney’s fees when courts dispose of claims on the merits. Instead, one purpose of the attorney’s fees provision is to deter the bringing of law­suits without foundation. The Supreme Court previously interpreted the statute to allow prevailing employers to recover their fees whenever the employee’s claim was frivolous, unreasonable, or groundless. The high court concluded that Congress must have intended that an employer could recover fees expended in frivolous, unreasonable, or groundless litigation when the case is resolved in the employer’s favor, whether on the merits or not.

#Attorneysfees #TitleVII

Is there a claim if the employer incorrectly believes the employee exercised free speech rights?

On April 26, 2016, the U.S. Supreme Court considered whether a government employee had a First Amendment claim against his employer. In Heffernan v. City of Paterson (2016) ___U.S.___ [136 S.Ct. 1412], the employer incorrectly believed the employee supported a particular candidate for mayor. The question was whether the factual mistake made a critical difference.

In this case, Mr. Heffernan, was a police officer in Paterson, New Jersey. In 2005, the mayor of Paterson, Jose Torres, was running for reelection against Lawrence Spagnola. Mr. Torres had appointed the Chief of Police and a subordinate who directly supervised Mr. Heffernan. During the campaign, Mr. Heffernan’s mother asked her son to pick up a Spagnola sign. Mr. Heffernan went to a distribution point and picked up the sign. While there, other members of the police force saw him, sign in hand, talking to cam­paign workers. Word quickly spread throughout the force. The next day, Mr. Heffernan’s supervisors demoted him.

Mr. Heffernan filed a lawsuit in federal court claiming that he had been demoted because of his constitutionally protected speech. The District Court decided that he had not en­gaged in any First Amendment conduct; and, for that reason, had not been deprived of any constitutionally protected right. The Court of Appeals agreed after concluding that a free-speech retaliation claim exists only where the employer’s decision was motivated by an employee’s actual, rather than perceived, exercise of constitutional rights.

The Supreme Court began by noting that, with a few exceptions, the Constitution prohibits a government employer from discharging or demoting an employee because the employee supports a particular political candidate. For purposes of its review, the high court assumed that the exceptions did not apply in this case.

The Supreme Court looked at the words of the relevant law (42 U.S.C. section 1983), which authorizes a lawsuit by a person “depriv[ed]” of a “right…secured by the Constitution.” That language did not answer the question before the high court because “right” could focus on the employee’s actual activity or the employer’s motive based on what it believes the activity to be.

The Supreme Court next reviewed its previous decisions. It acknowledged three of them that suggest the “right” concerns the employee’s actual activity. Those cases, however, did not involve a factual mistake about the employee’s conduct. In a fourth decision (Waters v. Churchill (1994) 511 U. S. 661), the high court decided there was no First Amendment violation as long as the employer (1) had reasonably believed that the employee’s conversation had involved personal matters, not matters of public concern, and (2) had dismissed the employee because of that mis­taken belief. In other words, it was the em­ployer’s motive, and in particular the facts as the employer reasonably understood them, that mattered.

The Supreme Court turned back to the case before it, noting that the employer mistakenly thought that Mr. Heffernan had engaged in protected speech. The high court concluded that, as in the Waters case, the government’s reason for demoting Mr. Heffernan is what counted. Consequently, when an employer demotes an employee out of a desire to prevent the employee from engaging in political activity that the First Amendment protects, the employee is entitled to challenge that unlawful action under the First Amend­ment and section 1983—even if the employer makes a factual mistake about the employee’s behavior.

#FirstAmendment #Retaliation

  • Dean Royer

Does California law require employers to provide reasonable accommodations to employees who are associated with a disabled person?

On April 4, 2016, the Second District Court of Appeal decided whether an employee could pursue a disability discrimination claim based on his employer failing to provide him an accommodation to care for his disabled son. In Castro-Ramirez v. Dependable Highway Express, Inc. (2016) 246 Cal.App.4th 180, Mr. Castro-Ramirez sued Dependable Highway Express, Inc. for disability discrimination, as well as failure to prevent discrimination, retaliation, and wrongful termination in violation of public policy.

In this case, Mr. Castro-Ramirez worked as a truck driver. He told his employer he needed to administer daily dialysis for his son. For several years, Mr. Castro-Ramirez’s supervisors scheduled him so that he could be home at night for his son’s dialysis. That schedule accommodation changed when a new supervisor took over and ultimately terminated Mr. Castro-Ramirez for refusing to work a shift that did not permit him to be home in time for his son’s dialysis.

The trial court rejected Mr. Castro-Ramirez’s theory that his employer terminated him for requesting an accommodation to care for a relative with a disability. It concluded that Mr. Castro-Ramirez’s evidence at best showed that his new supervisor was unwilling to provide accommodation to the same extent as his previous supervisor. It dismissed Mr. Castro-Ramirez’s case.

On appeal, the court in Castro-Ramirez began with a review of California disability discrimination law. One section defines a disability as including the employer’s perception that a person is associated with someone with a disability. Another section requires employers to provide reasonable accommodations to disabled employees. As a matter of first impression, the court of appeal concluded that California law creates a duty for employers to provide reasonable accommodations to employees who are associated with a disabled person.

The court of appeal also found that a jury could reasonably infer from the evidence that Mr. Castro-Ramirez’s association with his disabled son was a substantial motivating factor his termination. In particular, the facts could lead to an inference that the new supervisor wanted to avoid the inconvenience and distraction Mr. Castro-Ramirez’s need to care for his disabled son posed to the supervisor as the person responsible for scheduling the drivers. Consequently, the supervisor engineered a situation in which Mr. Castro-Ramirez would refuse to work the shift, giving the supervisor the reason to terminate him.

As for the retaliation claim, the appellate court concluded that Mr. Castro-Ramirez engaged in protected conduct. A jury could reasonably find that Mr. Castro-Ramirez’s repeated complaints to his old and new supervisors about the change in his scheduling, when both knew that he required earlier hours to administer dialysis to his son, constituted opposition to the denial of a reasonable accommodation in his schedule.

#Disability #Discrimination #Retaliation