Salary history no good as an EPA defense

The 9th Circuit – en banc – has swept away prior rulings and held that an employer cannot use an applicant's salary history (whether considered alone or with other factors) as a defense in an Equal Pay Act case. A "factor other than sex" must be "job-related." Therefore, an applicant's pre-employment salary history cannot be used as a reason for paying a woman less than a man for doing the same work. Rizo v. Yovino (9th Cir 04/09/2018) (en banc) [PDF], overruling Kouba v. Allstate, 691 F3d 873 (9th Cir 1982).

The Equal Pay Act requires employers to pay men and women the same amounts for work that "requires equal skill, effort, and responsibility, and which are performed under similar working conditions." One exception is for "a differential based on any other factor other than sex."

The en banc court concluded that "any other factor other than sex" is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.

"Prior salary, whether considered alone or with other factors, is not job related and thus does not fall within an exception to the Act that allows employers to pay disparate wages."

The majority (six judges) clearly view the use of prior salary as a perpetuation of prior discrimination, which the EPA was designed to eliminate.

"Congress simply could not have intended to allow employers to rely on these discriminatory wages as a justification for continuing to perpetuate wage differentials."

This all sounds like a clear, bright line, yet the majority is leaving some wiggle room for individualized salary negotiation.

"Today we express a general rule and do not attempt to resolve its applications under all circumstances. We do not decide, for example, whether or under what circumstances, past salary may play a role in the course of an individualized salary negotiation."

Two concurring judges wrote that they agree with most of the majority opinion, particularly its observation that past salary can reflect historical sex discrimination. However, they said the majority went too far in holding that any consideration of prior pay is impermissible under the Equal Pay Act, even when it is assessed with other job-related factors.

Two other concurring judges wrote that in holding that prior salary can never be considered, the majority failed to follow Supreme Court precedent, unnecessarily ignored the realities of business, and, in doing so, might hinder rather than promote equal pay for equal work.

One judge concurred in the judgment, saying that the better view is that past pay can constitute a "factor other than sex," but only if an employee’s past pay is not itself a reflection of sex discrimination.

A number of other Circuits pretty much agree, but the 9th Circuit looks like the toughest of the bunch.

Can EEOC enforce subpoena after underlying charge is resolved?

SCOTUSblog’s petition of the day raises interesting issues. Two men filed discrimination charges with the EEOC, the EEOC issued a right-to-sue letter, the men sued, and they lost. Meanwhile, the EEOC had issued a subpoena to the employer (before the men lost their suit) and continued its enforcement efforts after they lost their suit. The district court enforced the subpoena, and the 7th Circuit affirmed. EEOC v. Union Pacific Railroad (7th Cir 08/15/2017) [PDF]. The employer has now filed a petition for a writ of certiorari asking the US Supreme Court to review the case. Union Pacific Railroad v. EEOC (US Supreme Court cert petition filed 02/16/2018) [Briefs].

One issue is whether the EEOC is authorized by statute to continue investigating an employer by seeking enforcement of its subpoena after issuing a notice of right‐to‐sue to the charging individuals and the dismissal of the individuals’ subsequent civil lawsuit on the merits. There’s a split of authority between the 5th and the 7th Circuits.

Another issue is whether the EEOC is entitled to subpoena information that goes beyond the original allegations.

Will the Supreme Court review this case? There's no way to know.

Secular hospital claims ministerial exception

Marlon Penn – a hospital chaplain – claimed his employer New York Methodist Hospital discriminated against him on the basis of his race and religion, and retaliated against him after he filed charges with the EEOC. Even though the hospital no longer has any ties to the Methodist Church, the 2nd Circuit concluded that the 1st amendment's "ministerial exception" prevented Penn from pursuing a Title VII claim. Penn v. New York Methodist Hospital (2nd Cir 03/09/2018) [PDF].

There's no question that Penn was a minister. He conducted religious services and helped with prayer and rituals. The issue in the case was whether the hospital was a "religious institution" for purposes of the ministerial exception.

As the court put it, the hospital, "because of its history and continuing purpose, through its Department of Pastoral Care, is a “'religious group.'”

Historically, the hospital was connected to the United Methodist Church, but not any more, and now holds itself out as a secular facility. However, Penn worked in the hospital's Department of Pastoral Care which has the mission of providing an “ecumenical program of pastoral care” to patients and to “see that the needs of the whole person—mind and spirit as well as body—are met.”

The 2nd Circuit's logic is that the hospital once upon a time was a religious institution, the Department of Pastoral Care retained that character even though the hospital as a whole had gone secular, so the hospital "is a 'religious group,' at least with respect to its Department of Pastoral Care."

What about other secular hospitals? In footnote 5, the court says:

"Because this Court’s ruling is premised on the NYMH having been a religiously‐ affiliated entity and having retained a sufficient portion of its identity in the specific operation of the Department of Pastoral Care, this Court does not and need not reach the issue of whether hospitals, secular in their origins and with chaplaincies, also could properly invoke the ministerial exception."

I really don't see why the hospital's historical religious character (lost since the 1970s) has any bearing on whether it is a religious institution today.

The dissent says the majority "has set the bar far too low for employers to claim religious‐ based immunity from federal anti‐discrimination law." The dissent faulted the majority for focusing on the Department of Pastoral Care rather than the hospital as a whole.

For other discussions of this case:

Penn v. New York Methodist Hospital, No. 16-474 (2d Cir., Mar. 7, 2018); EEOC v. R.G. &. G.R. Harris Funeral Homes, No. 16-2424 (6th Cir. Mar. 7, 2018)

Hospital once linked to church and still giving pastoral care may invoke ministerial exception

Transgender discrimination violates Title VII: 6th Circuit

"Discrimination against employees, either because of their failure to conform to sex stereotypes or their transgender and transitioning status, is illegal under Title VII."

Aimee Stephens' employer (a funeral home) fired her after she announced that she intended to transition from male to female and would represent herself and dress as a woman while at work. The EEOC sued, and lost at the trial level, but the 6th Circuit reversed and held in Stephens' favor. EEOC v. R.G. &. G.R. Harris Funeral Homes (6th Cir 03/07/2018) [PDF].

Title VII prohibits employment discrimination "on the basis of … sex." Is that what happened here? Yes, says the court. And the funeral home owner's religious objections are no defense.

The 6th Circuit held:

(1) The funeral home discriminated against Stephens on the basis of her sex;

(2) The funeral home did not established that applying Title VII to the funeral home would substantially burden its owner's religious exercise, and therefore the funeral home is not entitled to a defense under the Religious Freedom Restoration Act;

(3) Even if the owner's religious exercise were substantially burdened, enforcing Title VII is the least restrictive means of furthering the government's compelling interest in eradicating workplace discrimination against Stephens.

Title VII applies to transgender status

Sex stereotyping: The 6th Circuit had previously decided – based on Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) – that "discrimination based on a failure to conform to stereotypical gender norms" was no less prohibited under Title VII than discrimination based on "the biological differences between men and women." "Discrimination against employees, either because of their failure to conform to sex stereotypes or their transgender and transitioning status, is illegal under Title VII."

Dress code: The funeral home argued that it was merely requiring its employees to conform to a sex-specific dress code, which court decisions from the 9th and 6th Circuits have upheld. The 6th Circuit replied that (1) this case did not involve the question of sex-specific dress codes, (2) earlier sex-specific dress code cases were wrongly decided, and (3) it was not necessary to show that transgender persons transitioning from male to female were treated differently than transgender persons transitioning from female to male.

Chromosomes: The funeral home argued that Title VII "sex" means "chromosomally driven physiology" whereas transgender status refers to "a person's self-assigned 'gender identity'" rather than a person's sex. The court had two responses to that: "First, it is analytically impossible to fire an employee based on that employee's status as a transgender person without being motivated, at least in part, by the employee's sex." "Second, discrimination against transgender persons necessarily implicates Title VII's proscriptions against sex stereotyping." "[A] transgender person is someone who 'fails to act and/or identify with his or her gender' – i.e., someone who is inherently 'gender non-conforming.'"

Defenses based on religion

Ministerial exception: The funeral home cannot shield itself based on the "ministerial exception" (a 1st amendment component) because (1) the funeral home is not a religious organization and (2) Stephens is not a ministerial employee.

Religious Freedom Restoration Act: After a relatively lengthy discussion of the Religious Freedom Restoration Act, the court concluded that RFRA provides the funeral home with no relief because (1) continuing to employ Stephens would not, as a matter of law, substantially burden the funeral home owner's religious exercise, and (2) even if it did, the EEOC has shown that enforcing Title VII here is the least restrictive means of furthering its compelling interest in combating and eradicating sex discrimination.

My views:

(1) It's logically impossible to discriminate based on changing sexes without discriminating "on the basis of … sex" – even without going into the issue of sex stereotyping. It would be the same thing if there were discrimination based on changing religions.

(2) This case is one more illustration of where courts have used sex stereotyping theory to address issues that probably were not in the minds of the members of Congress back in 1964. We've seen it with male-on-male and female-on-female sex discrimination and with sexual orientation discrimination.

Sexual orientation discrimination IS Title VII sex discrimination: 2nd Circuit

It took the 2nd Circuit 68 pages to conclude that "sexual orientation discrimination is … a subset of sex discrimination." Thus, sexual orientation discrimination violates Title VII. Zarda v. Altitude Express, Inc. (2nd Cir 02/26/2018) (en banc) (10-3) [PDF].

Here is the analysis in a nutshell:

"We now conclude that sexual orientation discrimination is motivated, at least in part, by sex and is thus a subset of sex discrimination. Looking first to the text of Title VII, the most natural reading of the statute’s prohibition on discrimination “because of . . . sex” is that it extends to sexual orientation discrimination because sex is necessarily a factor in sexual orientation. This statutory reading is reinforced by considering the question from the perspective of sex stereotyping because sexual orientation discrimination is predicated on assumptions about how persons of a certain sex can or should be, which is an impermissible basis for adverse employment actions. In addition, looking at the question from the perspective of associational discrimination, sexual orientation discrimination—which is motivated by an employer’s opposition to romantic association between particular sexes—is discrimination based on the employee’s own sex."

Overruling some of its prior decisions, the 2nd Circuit said:

"We now hold that sexual orientation discrimination constitutes a form of discrimination “because of . . . sex,” in violation of Title VII, and overturn [Simonton v. Runyon, 232 F.3d 33, 35 (2d Cir. 2000)] and Dawson v. Bumble & Bumble, 398 F.3d 211, 217–23 (2d Cir. 2005), to the extent they held otherwise."

It does indeed seem that there has been a shift in thinking about sexual orientation discrimination. Once seen as not covered at all by Title VII, courts are using a variety of standard analytical techniques to conclude that sexual orientation discrimination IS sex discrimination prohibited by Title VII.

Does ADEA 20-employee minimum apply to local governments? US Supreme Court will decide

The US Supreme Court has granted certiorari in Mount Lemmon Fire District v. Guido (US S Ct cert granted 02/26/2018) [Briefs].

For a private employers, the Age Discrimination in Employment Act applies only if the employer has 20 or more employees. Smaller private employers are exempt. But what about local governments? Are they all covered? Or only those with 20 or more employees? That is the question raised in Mount Lemmon Fire District v. Guido.

Four federal Circuit courts have said that the 20-employee minimum applies to the political subdivisions of a state – the 6th, 7th, 8th, and 10th Circuits. But there is one Circuit – the 9th – which recently held that the ADEA applies to all political subdivisions of a state, regardless of size. Guido v. Mount Lemmon Fire District (9th Cir 06/19/2017) [PDF].

John Guido and Dennis Rankin were firefighter Captains at the Mount Lemmon Fire District, a political subdivision of the State of Arizona. After they were terminated, they sued claiming a violation of the Age Discrimination in Employment Act (ADEA). The district court granted summary judgment for the Fire District on the ground that it was not an "employer" under the ADEA; the 9th Circuit reversed.

The statute

29 U.S.C. § 630(b):

"The term 'employer' means a person engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year … . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State … ."

Statutory history

As enacted in 1973, the ADEA applied only to private employers. A 1974 amendment extended the ADEA to local governments by adding a second sentence to § 630(b). You can't help but notice that the first sentence contains an express 20-employee minimum, and the second sentence is just plain silent on that point.

The courts

Although four Circuits have held that the 20-employee minimum applies to local governments, all of those Circuits really rely on just one case – Kelly v. Wauconda Park Dist., 801 F.2d 269 (7th Cir. 1986) [PDF]. The Kelly court's reasoning was that (1) the statute is ambiguous, and (2) the legislative history leads to the conclusion that "Congress, in amending section 630(b), merely intended to make it clear that states and their political subdivisions are to be included in the definition of ‘employer,’ as opposed to being a separate definition of employer."

The 9th Circuit decision – which rejected the Kelly analysis – was based on the "plain meaning" of the statute. The 9th Circuit said that the meaning of § 630(b) is not ambiguous, because the 20-employee minimum does not appear in the second sentence.

The 9th Circuit was also highly critical of the manner in which the Kelly court had found ambiguity in the first place. Here is my favorite quote, penned by Circuit Judge Diarmuid F. O’Scannlain:

"The Seventh Circuit in Kelly concluded the statute was ambiguous. While acknowledging that the categorical reading was a reasonable one, it concluded the plaintiff 'weaken[ed] his argument that the statute is unambiguous by arguing that we should look at "common sense" and congressional intent in deciding that the statute is unambiguous.' 801 F.2d at 270. It is not clear to us why an appeal to 'common sense' undermines this argument. Further, any appeal to congressional intent is a non-sequitur; it is not a factor that should affect the determination of whether a statute’s plain meaning is ambiguous. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 391 (2012)."

One must take note of the citation to Scalia & Garner's Reading Law: The Interpretation of Legal Texts. Some critics seem to take the position that reliance on the "plain meaning" of a statute naturally results in decisions that favor employers, and disfavors employees and labor unions. Of course this is not true. Some critics also presuppose that only conservative judges apply the kind of statutory analysis that Judge O’Scannlain used. One need go no further than Digital Realty Trust, Inc. v. Somers (US Supreme Ct 02/21/2018) [PDF] to see that Supreme Court Justices prefer to read statutes the way they were written rather than some way the individual Justice might rather it be written.