News & Analysis

Misclassification alone is insufficient for class treatment

Are certain classes of your employees routinely working overtime? If so, are they properly classified as exempt or nonexempt? Wage and hour class actions continue to be large thorns in the sides of many employers, and this recent decision serves as a good reminder of how critical it is for you to review your overtime policies, job descriptions, and exemption classifications.

Court not so SLAPP happy over hospitals' action against doctor

Employers relying on the Strategic Lawsuit Against Public Participation (anti-SLAPP) procedure to strike retaliation claims must be sure that the anti-SLAPP action is based soundly on protected activity. There is an important distinction between protected statements or conduct leading to the act for which retaliation liability is asserted and the act itself. If the act isn't protected, the anti-SLAPP action will fail.

CA court: Some of employee's claims must go to arbitration

Employers often have applicants or newly hired employees sign arbitration agreements. However, the California Supreme Court has held that an employee's representative action brought on behalf of himself and other current and former employees under the Private Attorneys General Act of 2004 (PAGA) is not subject to arbitration. But what happens if an employee files a lawsuit that includes both representative claims under the PAGA as well as individual claims for unpaid wages? May the employer enforce arbitration of the individual claims for unpaid wages, even though PAGA claims aren't subject to arbitration? A recent case before the California Court of Appeal answers that question.

Crimes and misdemeanors: more limitations on employers

It's August 2017—are your policies and practices in compliance with the new regulations limiting consideration of criminal history in employment decisions? The California Fair Employment and Housing Council's Consideration of Criminal History in Employment Decisions Regulations became effective July 1, 2017. These regulations are substantially similar to the guidance adopted by the Equal Employment Opportunity Commission (EEOC) in its April 2012 "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964." If you haven't recently reviewed your policies and practices, they may very well be in violation of California's recently revised regulations.

9th Circuit says ADEA applies to small public employer

The federal Age Discrimination in Employment Act (ADEA), like most other antidiscrimination statutes, specifies to which employers it applies. In the private sector, the ADEA protects against age discrimination by employers with more than 20 employees. A recent decision by the 9th Circuit Court of Appeals (whose rulings apply to all California employers) concluded that the 20-employee threshold doesn't apply to public-sector employers.

Employer's lawyer in hot water after threatening worker with possible deportation

Only an employer can violate the minimum wage and overtime provisions of the federal Fair Labor Standards Act (FLSA). But the statute's nonretaliation provisions are broader and may sweep in "any person" who retaliates against an individual based on conduct protected by the FLSA. The 9th Circuit recently found an employer's outside lawyer to be such a person after the lawyer attempted to arrange the detention—and possible deportation—of an undocumented worker when he appeared for a deposition.

9th Circuit again orders enforcement of EEOC investigative subpoena

Employers that resist requests for information from the Equal Employment Opportunity Commission (EEOC) may find themselves on the losing side if they go to court over the issue. That's what happened a couple of years ago when the 9th Circuit said that a company had to turn over information sought by the EEOC. The company was persistent and took the matter to the U.S. Supreme Court, which concluded that the 9th Circuit had applied the wrong legal standard in its review. But two years later, applying the newly prescribed standard, the 9th Circuit reached the same result as before. The EEOC subpoena was again ordered to be enforced.

Your tax dollars at war

Does Title VII of the Civil Rights Act of 1964, the basic federal antidiscrimination law, prohibit sexual orientation discrimination? There are good arguments on both sides of the question.

Have it your way: Court sides with labor organizer

The U.S. 8th Circuit Court of Appeals (whose decisions cover Arkansas employers) recently enforced a National Labor Relations Board (NLRB) order that found a Burger King franchisee violated the National Labor Relations Act (NLRA) by declining to hire an employee for having engaged in protected labor activity.

Background

In March 2015, EYM King acquired numerous Burger King franchises in Kansas City, Missouri, from Strategic Restaurants Acquisitions Company, LLC. These acquisitions included a location at 1102 East 47th Street. EYM King retained the 47th Street store's general manager, LaReda Hayes, and gave her permission to rehire Strategic employees. Hayes rehired most of the Strategic employees, but not Terrance Wise, a well-known labor organizer who had been working at various Burger King stores for over 11 years and at the 47th Street store since early 2012.

Hayes told Wise that he wasn't being rehired because of a change in his schedule availability and his insubordination. He had filled out an application form that indicated he was no longer available to work overnight on Saturdays or anytime on Sundays.

During his time at the 47th Street store, Wise had received a few disciplinary warnings. One of those warnings occurred on April 21, 2014, for arriving to work one hour late, and that was followed by a second warning on May 5 for arriving 15 minutes late. He had also received a warning on May 6 for not calling in more than three hours before his shift to inform supervisors that he was running a little late. Although he received no further formal warnings, he was twice verbally counseled by Hayes for cooking too much food.

Wise participated in the Workers' Organizing Committee in Kansas City, which advocated that fast-food employees receive a minimum wage of $15 per hour, a request referred to as the "Fight for $15." Wise had assumed a leadership role in the labor organization and was responsible for bringing the "Fight for $15" campaign to the 47th Street store. He also assisted with bringing unfair labor practice charges against the store in May 2014. Hayes was aware of those activities.

The NLRB General Counsel filed a complaint with the Board alleging that EYM King had violated Sections 8(a)(1) and (3) of the NLRA by refusing to hire Wise. An administrative law judge (ALJ) held a hearing at which Hayes testified that her decision not to hire Wise was based on his limited availability, several instances of insubordination, and his record of tardiness. She told the ALJ that the extent of Wise's behavioral problems weren't documented because after May 2014, Strategic had directed her to report to HR any negative behavior by Wise (and other individuals involved with the Workers' Organizing Committee). Strategic would then determine an appropriate response. Hayes testified that she e-mailed Strategic a number of times about Wise's behavior but never received a response. She eventually stopped sending the reports.

The ALJ found that Hayes wasn't "an overall credible witness" and that her stated reasons for declining to hire Wise were implausible. The ALJ then concluded that the decision not to hire Wise was motivated in part by his involvement in protected labor activities, in violation of the NLRA. The Board agreed with those determinations, and petitioned the 8th Circuit for enforcement of its order.

8th Circuit's opinion

The court explained that under Section 8(a)(3) of the NLRA, certain discrimination in the hiring of employees is an unfair labor practice. It continued explaining that the Board has adopted a three-part test for a refusal-to-hire violation under Section 8(a)(3). The General Counsel must first show that:

  1. The employer was hiring, or had concrete plans to hire;
  2. The applicant had experience or training relevant to the requirements of the position; and
  3. Anti-labor organization animus contributed to the decision not to hire the applicant.

The burden then shifts to the employer to show that it wouldn't have hired the applicant even in the absence of his labor organization activity or affiliation.

The court noted that because EYM King doesn't dispute that it was hiring or that Wise was qualified for the position, it had to determine whether substantial evidence supported the Board's determination that his involvement in the Workers' Organizing Committee was a motivating factor in EYM King's decision not to hire him.

The court recognized that both implausible explanations and false or shifting reasons support a finding of illegal motivation. When an employer's explanation fails to withstand scrutiny, it's considered pretextual, thereby providing a substantial reason to reject the argument that the employer would have taken the same action regardless of any protected activity.

Hayes testified that she declined to hire Wise because of his change in schedule, tardiness, and insubordination. The 8th Circuit concluded that substantial evidence supported the Board's determination that her reasons were pretextual.

First, Wise didn't dramatically change his availability, as EYM King argued. Although he had recently started working night shifts, he had been working primarily day shifts at the beginning of 2015, and he only limited his availability for two nights and one day per week.

Second, Wise had a minor disciplinary record spread out over years of working at Burger King (all of his formal warnings were issued in April and May 2014). Hayes also hadn't disciplined him for some of his allegedly insubordinate behavior before she had allegedly received a directive from Strategic telling her to run all discipline through HR.

Finally, Hayes provided vague and inconsistent testimony throughout the hearing, including testimony that she both did and "did not" inform HR about an incident in which Wise allegedly took hamburgers after a shift. The court believed that her implausible explanations provided substantial evidence to support the Board's determination that her hiring decision was based on an improper motivation.

EYM King argued that the Board erred by declining to credit Hayes' testimony that in May 2014 she received a directive from Strategic that precluded her from disciplining Wise without the approval of HR. However, the court responded that the Board actually observed that she had failed to provide evidence to corroborate her version of some events. It further found that even if it were to conclude that the Board erred by declining to credit her testimony, there was other substantial evidence to support the Board's determination that her explanation was pretextual. It pointed to the Board's finding regarding her demeanor at the hearing and her vague and inconsistent testimony.

The court, therefore, concluded that substantial evidence supported the Board's determination that EYM King refused to hire Wise because of his participation in protected labor activities, in violation of Sections 8(a)(1) and (3) of the NLRA.

Bottom line

The credibility of key decision makers is critical in NLRA discrimination cases. When a decision maker contradicts herself about important events and provides implausible reasons for an adverse employment action, judges and courts will likely find that her given reasons were pretextual.

You may contact the author at sjones@jacknelsonjones.com.

Tick tock: Employer didn't discriminate against employees fired for time theft

The 8th Circuit recently affirmed a lower court's dismissal of two employees' lawsuits claiming that they were terminated as a result of race discrimination.