Friday, September 28, 2018

NLRB finds employer retaliated against employees for approving a labor union

The National Labor Relations Act prohibits employers from retaliating against employees for voting in favor of a union. In this case, the National Labor Relations Board ruled against an employer that engaged in such retaliation. The Court of Appeals confirms the ruling.

The case is NLRB v. Dawn Trucking, Inc., a summary order issued on September 21. The Board said that Dawn fired six employees for voting in favor of union representation. That ruling has factual support in the record, says the Court of Appeals (Raggi, Sack and Katzmann).

Prior to the union election in November 2015, Dawn's owner said he would shut down the company if they voted in favor of a union. Following the election, the owner said, "Straight across the board, we're done." He also stopped giving any of the employees any work. Then, in January 2016, the owner started up the company again and said he had "found out who the terrorists were." The Second Circuit says the NLRB was able to find that "terrorists" means pro-union employees.

An employer can avoid liability in a case like this if it closes the business permanently and lawfully. But the Circuit defers to the NLRB's findings that the business was not permanently closed down, as the owner handled some trucking assignments for Dawn and tried to re-hire certain employees. While management the NLRB had no basis to find the company unlawfully made offers of reinstatement to certain employees conditions upon their rejection of the union, the evidence shows that in a text message, the owner offered reinstatement on one condition: "no union rates no benefits." 

Thursday, September 27, 2018

Second Circuit interprets the "outside salesman" exception under the FLSA

The Fair Labor Standards Act entitles you to overtime unless you fall within one the statute's many exceptions. The plaintiffs here fall within the "outside salesman" exception and therefore cannot get any overtime.

The case is Flood v. Just Energy, issued on September 19, which along with Flood gave us two FLSA rulings on the same day in favor of employers, sort of a double-whammy for the American worker, at least the ones living in the Second Circuit.

Plaintiffs engaged in door-to-door solicitation to persuade customers to buy Just Energy's electricity or natural gas. Being a salesman is hard enough when you have the door slammed in your face by irate homeowners who are eating dinner or watching TV when someone is trying to sweet-talk you into buying a service that you do not want or already have. The salesmen here worked more than 40 hours a week dealing with the fickle American consumer only to discover they were not getting paid overtime. So then went to court. The court also says no. As it happens, courts around the country are divided on whether Just Energy's salespersons are entitled to overtime. The Second Circuit says they are not.

Under the regulations, an outside salesman is someone whose primary duty is "making sales" or obtaining orders or contracts for services or the use of facilities, and who is customarily and regularly engaged away from the employer's place of business in performing these primary duties.

Plaintiff Flood falls within the exception. He was "making sales" by going door-to-door selling Just Energy's products, and he got paid only when he was able to talk someone into signing the contract. Flood argues that he was not "making sales" because defendant had discretion to reject the contracts he secured from customers. That's an interesting argument, but the Court of Appeals (Kearse, Livingston and Meyer [D.J.]) says, "we do not agree that the outside salesmen exemption requires a showing that a selling employee has an unconditional authority to bind the buyer or his employer to complete the sale." Authority for this proposition lies with the Supreme Court's ruling in Christopher v. SmithKline (2012), which "declined to interpret the 'making sales' requirement to mandate a showing that an employee has fully consummated a sales transaction or the transfer of title to property." The Court in Christopher also counseled against the use of technicalities to defeat the outside salesmen exception.

At the end of the ruling, the Second Circuit also agrees with the district court's collateral estoppel ruling, which said that plaintiff could not benefit from a contrary district court ruling against Just Energy in Ohio. That case, Hurt v. Just Energy, was similar to this one, but there is no offensive collateral estoppel for Flood because the Hurt case only addressed the "making sales" prong of the outside salesman exception and not the "obtaining orders or contracts for services" element. Also, Just Energy has not yet had a chance to appeal the Hurt ruling, which also cuts against Flood in the collateral estoppel equation.

Wednesday, September 26, 2018

Limousine service does not have to pay overtime under the FLSA

The Fair Labor Standards Act requires employers to pay their employees one-and-a-half times their rate of pay if they work overtime. But the FLSA also has numerous exceptions. From time to time, the Second Circuit takes on another statutory exception. This time around, it's the taxicab exception. The Court rules that a chauffeured car service did not have to pay overtime because it qualifies as "an employer engaged in the business of operating taxicabs."

The case is Munoz-Gonzalez v. DLC Limousine Service, Inc., decided on September 19. The Second Circuit has never interpreted the taxicab exception before, so it starts with the language of the statute in determining its scope. What is a "taxicab" under the FLSA? The statute does not define it, so the Court looks to the dictionary, Webster's New International Dictionary, the unabridged second edition from 1934, issued around the time of the FLSA. (Which makes me wonder if labor lawyers should invest in the same dictionaries the courts use in interpreting statutes). That dictionary says a taxicab is “[a] passenger‐carrying vehicle, usually a motor vehicle designed to seat five or seven persons, with or without a taximeter, maintained for hire on public thoroughfares or at public stations or stands, but not operated on a schedule.”

More broadly, the FLSA exempts employees throughout the transportation industry, which was already regulated by other statutes.

Here is the problem for plaintiffs (and other employees who want their overtime). While "our Circuit has traditionally construed FLSA exemptions narrowly and against the employers asserting them," that framework changed in 2018, when the Supreme Court issued Encino Motorcars v. Navarro, which rejected that method of statutory interpretation for the first time by a 5-4 vote. So by this point in the ruling, you know the plaintiffs are going to lose this case, and they do. As the Second Circuit (Livingston, Chin and Failla [D.J.]) writes:

we conclude that there is no genuine dispute that DLC’s drivers qualify for the taxicab exemption. First, DLC’s fleet consists of chauffeured passenger vehicles, including town cars, SUVs, and luxury vans. Second, DLC’s cars are available for hire by individual members of the general public. Third, DLC’s cars take passengers wherever they want to go and “do not cover fixed routes or adhere to fixed schedules” or fixed termini. Accordingly, DLC’s drivers qualify for the taxicab exemption.
The Encino effect is trickling down to the lower federal courts, requiring judges to reevaluate how they interpret the FLSA and its exceptions. The taxicab exception under the FLSA is the victim of that framework, but it will not be the last.

Tuesday, September 25, 2018

SDNY reduces punitive damages award from $750,000 to $125,000

A Southern District judge has reduced a punitive damages award in a City Human Rights Law case from $750,000 to $125,000. Along the way, the trial court clarifies how to properly charge the jury on punitive damages under the City law.

The case is Duarte v. St. Barnabas Hospital, 2018 WL 4440501, issued by Judge Gardephe on September 17. Lead counsel is Megan Goddard. I assisted with post-trial briefing. Plaintiff is hearing-impaired. She testified that her manager, Quinones, created a hostile environment on the basis of disability in regularly insulting plaintiff over the hearing impairment. I talked about the pain and suffering remittitur at this post. This time, I discuss the punitive damages.

Post-trial, defendant argued that plaintiff was not entitled to punitive damages and, even if she were entitled to them, the award was too high. Judge Gardephe says punitives were warranted, but the award was too high.

Under the New York City Human Rights Law, punitive damages are available if the defendant's actions "amount to willful or wanton negligence, or recklessness, or where there is a conscious disregard of the rights of others or conduct to reckless as to amount to such disregard." That rule is more favorable to plaintiffs than the malice standard under federal law, and it draws from the New York Court of Appeals' ruling in Chauca v. Abraham, 30 N.Y.3d 325 (2017).

While the defendant says its conduct was not reprehensible enough to warrant punitives, the district court  disagrees, reasoning in part as follows:

There is evidence that at staff meetings between 2007 and August 2014 Quinones repeatedly referred to Plaintiff as “deaf,” and that he did so in a manner that was calculated to be demeaning and humiliating to her. Quinones also suggested at staff meetings that Plaintiff was exaggerating her hearing disability, stating repeatedly that Plaintiff could hear when it was convenient for her to hear. There is also evidence that Hospital managers – Quinones and Arce-Tomala – ignored Plaintiff’s repeated complaints about Quinones’s discriminatory misconduct. Finally, there is evidence that the Hospital failed to investigate Plaintiff’s complaints about Quinones’s discriminatory misconduct in November 25, 2013, when the Hospital received Plaintiff’s rebuttal to her written warning.

Based on Plaintiff’s testimony, however, it is clear that the vast majority of staff meetings proceeded without discriminatory ridicule. (Transcript at 791-92 (testifying that Quinones ridiculed Plaintiff’s disability on two or three occasions in 2009 and 2010, and three times in 2011)). Moreover, most of the reprehensibility factors are absent here: there was no evidence of violence or a threat of violence; physical injury; termination of employment that resulted in financial vulnerability; deceit; indifference or reckless disregard for the health or safety of others; or discriminatory misconduct extending to employees other than Duarte.
Having considered “all of the circumstances of the case,” the Court concludes that the Hospital’s conduct “was insufficiently reprehensible to justify a punitive damages award in significant excess of [the] compensatory damages award,” which this Court has remitted to $125,000.
The district court further noted that while plaintiff complained about the harassment, it was not remedied, and there was evidence that management was not properly trained in antidiscrimination procedures. These factors also warrant punitive damages.

Interesting side note to the punitives inquiry. The jury charge said the employer could avoid punitive damages if management put into place policies and practices to educate employees about unlawful discrimination and to properly investigate and resolve discrimination complaints. The employer may also avoid punitives, the district court charged the jury, if it made good faith efforts to implement and enforce these policies and practices. While plaintiff did not object to this charge, she pointed out post-trial that the charge was incorrect, and the district court says in a footnote that this charge "may have been more favorable to the Hospital than was warranted under applicable law." This is because there is no safe harbor from punitive damages when a supervisor or manager commits the discrimination or where management knew about but did not remedy the discrimination. The statute says the safe-harbor against punitive damages only applies when the employer should have known of of a co-worker's discriminatory conduct and failed to exercise reasonable diligence to prevent such discriminatory conduct. When the co-worker harassment/discrimination happens, the existence of the policies and procedures may shield against punitive damages. That shield does not kick in when the manager commits the discrimination or the employer knew about but did not remedy the discrimination. However, the existence of policies and procedures may mitigate the amount of punitive damages.

The trial court says the defective jury charge is harmless error because evidence supports punitive damages even under the defective charge, as a manager committed the harassment and the evidence shows that defendant did not properly prevent or correct the harassment.

This footnote on the scope of the City law's punitive damages provision is worth a read. The Chauca case will result in more juries determining whether to impose punitive damages, as the City law standard is more plaintiff-friendly than federal law. But the statute is worded and structured quite differently than federal law, and even judges may misinterpret its provisions.

Monday, September 24, 2018

SDNY reduces $624,000 pain and suffering award to $125,000

A Southern District judge has reduced a $1.3 million verdict in a disability discrimination case to $250,000, ruling that the plaintiff suffered only "garden variety" damages but that she was entitled to punitive damages under the New York City Human Rights Law. In this blog post, I will talk about the damages. The next post will cover punitives.

The case is Duarte v. St. Barnabas Hospital, 2018 WL 4440501, issued by Judge Gardephe on September 17. Lead counsel is Megan Goddard. I assisted with post-trial briefing. Plaintiff is hearing-impaired. She testified that her manager, Quinones, created a hostile environment on the basis of disability in regularly insulting plaintiff over the hearing impairment, even slamming the table during staff meetings, which created an ear-splitting sound-assault because plaintiff's amplification device was on the table, connected to her earphones. This did not happen every day, but the manager did this over the course of five years, triggering painful memories of plaintiff's childhood when her father ridiculed her over the hearing impairment. Plaintiff did not go to counseling, but she confided in social worker colleagues at the hospital about her distress. Here is how the district court reviews the emotional distress evidence:

Plaintiff testified that – during her employment at DCCS – she discussed her emotional distress with her children and with four fellow DCCS clinicians – Torres, Carmen Lopez, Silva Dolman, and Janet Santa Cruz. Plaintiffs' children were not called as witnesses at trial, however, and – other than Torres – the clinicians mentioned by Duarte were not called to testify. 
Torres testified as follows regarding Duarte’s emotional distress:
Before the meetings, Ms. Duarte ... would call me to say please don't leave me alone. So I would go to her office and get her and already she was appearing, she was appearing nervous, and she would just grab my hand and say well, hopefully everything goes well.
I said let’s pray, let’s pray that everything goes well and that there will be a miracle, Edgardo will cancel the meeting, you know, that he doesn't say any remark....
... As we were walking, we were basically reiterating everything will be okay, you'll get through it. Then we [would] go into the staff meetings....
Torres added that she and Plaintiff would “pray[ ] for a miracle that Edgardo wouldn't show up, that he wouldn't come out and say those horrible things,” such as “are you deaf, are you deaf.”
According to Torres, when Quinones made remarks about Plaintiff’s hearing disability at staff meetings, Duarte would “sigh, ‘Edgardo,’ ” “shake her head, bring it down[,] ... [and] shut down [for] the rest of the staff meeting.” “[I]f the meeting went bad, meaning that Edgardo ... humiliated her in front of us, the co-workers, then [Duarte] would leave crying.” Plaintiff would later cry in front of Torres and say, “I don't understand why he does this.” According to Torres, Plaintiff eventually stopped speaking up at meetings out of “fear that it would trigger Mr. Quinones.”
Federal courts in New York classify emotional distress damages in three ways: (1) garden variety, which can get you from $30,000 to $125,000; (2) significant, which range from $100,000 to $500,000; and (3) egregious, which can exceed $500,000. Juries are not told about this, and they probably have no idea how lawyers and judges pick through their damages awards to ensure they do not exceed these standards. Judge Gardephe says plaintiff's damages are only garden-variety.

Plaintiffs who do not seek out psychological help may find themselves in the garden-variety category. That's what happened here. The court says plaintiff's "vague and subjective complaints of insomnia, lower self-esteem, depression, anxiety and stomach aches and headaches" are not "significant" under the above framework because she did not support them with medical corroboration. The court also finds that plaintiff did not suffer long-term emotional distress as a result of the discrimination. While cases do allow for significant emotional distress damages if the harassment continues for several years, the court says this case is not comparable to those cases that awarded significant damages. This means the $624,000 in pain and suffering is remitted to $125,000.

Wednesday, September 19, 2018

Court strikes polygraph requirement from sex offender's sentence

Defendant, a convicted sex offender, appealed from the trial court's sentence, objecting to a condition that required him to submit to a lie detector test as part of the sex-offender treatment plan. The Court of Appeals upholds that objection and strikes the polygraph from the sentence.

The case is United States v. Washington, decided on September 18. When the district court announced the sentence in open court, it did not mention the polygraph. But when the court later issued the sentence in writing, the polygraph requirement turned up for the first time. Under the federal sentencing rules, the defendant must be present at sentencing. While a written judgment may clarify the sentencing provisions, "the spoken version ordinarily controls," the Court of Appeals (Cabranes, Pooler and Oetken [D.J.]) says. In this case, the polygraph requirement represents an improper modification to the spoken sentence. Here is the reasoning:

Polygraph testing can be onerous for a defendant, who may feel at risk of incriminating him‐ or herself. It is also not a necessary or invariable part of sex offender treatment. Many district judges require polygraph testing as part of the sex‐offender‐treatment condition in at least some cases. See generally Migdalia Baerga‐Buffler & James L. Johnson, Sex Offender Management in the Federal Probation and Pretrial Services System, 70 Fed. Prob. 13 (2006); Michael Palmiotto & Scott MacNichol, Supervision of Sex Offenders: A Multi‐Faceted and Collaborative Approach, 74 Fed. Prob. 9 27 (2010). But we learned at oral argument that some district judges, including some judges in the district courts of this Circuit, never allow it.
Interesting that the Court notes what happened at oral argument on the use of polygraphs in cases like this. The Court adds that lie-detectors are "not a necessary or invariable component of sex‐offender

Tuesday, September 18, 2018

Racial harassment case is dismissed: 11 racial acts over five years not enough

The black schoolteacher in this case certainly had a difficult time at work. He sued the district for racial harassment, but the district court held plaintiff did not suffer a hostile work environment. The Court of Appeals affirms.

The case is Berrie v. Board of Educ. of the Port Chester-Rye Union Free School District, a summary order issued on September 18. Plaintiff was the gym teacher. From 2011 through 2016, a variety of bad acts were directed toward him. In February 2013, a teacher, Iantorno, sent a racially-offensive email to the faculty, for which the district disciplined her and made her apologize. Two months later, the principal shot a hockey ball in plaintiff's direction, hitting plaintiff's head. The district said this was an accident. In May 2013, the assistant superintendent, Coates, sent plaintiff an article about the "Code of the Streets" in an effort to determine why plaintiff was so angry about the hockey incident. In June, the district wanted plaintiff to attend anger management class, though it later retracted this recommendation. Other acts included: in 2011 or 2012, the principal asked plaintiff, "Can't you guys spell?"; someone made an offensive comment during anti-harassment training in December 2013; an assistant principal in observing plaintiff's class sent home one of plaintiff's guest speakers; one teacher said plaintiff was "too black" and that she had a right to use the n-word; the administration told that teacher that it was fed up with plaintiff; an unidentified individual urinated in plaintiff's coffee pot; another unidentified person left feces in the gymnasium toilet without flushing; and the principal told plaintiff that his transfer to the middle school would make it a "dumping ground."

The Court of Appeals (Jacobs, Droney and Shea [D.J.]) says there is no hostile work environment. Some of the incidents were race-neutral, like the hockey incident. The urine/feces incidents cannot be attributed to any of the defendants or to any discriminatory animus and, besides, many people had access to these areas.

After kicking aside that evidence, the Court of Appeals says, plaintiff has eleven incidents over a five-year period:

the Iantorno email; the Coates article; Swift asking “can’t you guys spell” and criticizing Berrie’s transmission of a lesson plan; the retracted recommendation that Berrie seek anger management; Ciccoria’s lewd jokes and gestures; three racially offensive remarks from Piccola; and two other racially offensive remarks from other teachers. Even if all of these incidents could be viewed as racially motivated, eleven incidents over five years is not “severe or pervasive” enough to create an “environment [that] would reasonably be perceived, and is perceived, as hostile or abusive.”
The Court of Appeals cites Stembridge v. City of New York, 88 F. Supp. 2d 276, 286 (S.D.N.Y. 2000), for the proposition that seven racially insensitive comments over three years, including one instance of calling the plaintiff the “n-word,” were not pervasive.

Can the Court just set aside certain bad acts because they were not explicitly racial? The Second Circuit has a few cases that hold you can infer the neutral acts were racially or gender motivated if the plaintiff endured other acts motivated by race or gender. Those cases are not cited here. I have seen cases holding that the plaintiff did not suffer enough bad acts over a period of several years, but this may be the first case I've seen where eleven arguably racial acts were not enough over the course of a few years. Note the Second Circuit's reliance on a district court case (and not a Circuit court ruling) for its central holding in this case.

Tuesday, September 11, 2018

Lawsuit alleging sexual touching of inmate cannot proceed

Here is another tutorial on qualified immunity, the federal doctrine that allows government defendants to avoid suit if they did not violate clearly-established law. In this case, the plaintiff was an inmate. He says a corrections officer touched him in a sexually-inappropriate way. The officer gets qualified immunity.

The case is Shannon v. Venettozzi, a summary order issued on September 6. As the district court summarized plaintiff's case:

He alleges that defendant McTurner repeatedly sexually assaulted him when plaintiff attempted to use the restroom during visitation time, and that defendants Correctional Officer Nitoscha Moore and Correctional Sergeant V. Colon ignored plaintiff's requests for intervention to stop the alleged assaults. (Id. ¶¶ 12-20.) For example, plaintiff alleges that in August 2011, he was waiting in line to use the restroom during a visit from his wife when defendant McTurner sexually assaulted plaintiff by rubbing plaintiff's genitalia, inner thighs, stomach, and chest. (Id. ¶ 12.) Plaintiff alleges that defendant McTurner's touching was sexual in nature and "totally unconducive to a legitimate search for contraband." (Id.) Plaintiff claims that when he complained to defendant Moore—who, he alleges, witnessed the assault—Moore ignored him and refused to intervene. (Id. ¶ 13.)
These allegations are serious, but the officers win the case. In 2015, the Second Circuit held in Crawford v. Cuomo, 796 F.3d 252 (2d Cir. 2015), that even a single instance of a correction officer's intentional touching an inmate's genitalia violates the Eighth Amendment when the touching lacks any legitimate purpose and is undertaken with intent to humiliate the inmate or gratify the officer's sexual desire. But that was 2015. In this case, Shannon says the touching happened in 2011, prior to Crawford. For some reason, the law in the Second Circuit was not yet clearly-established that this kind of touching was not yet an Eighth Amendment violation.

Rulings by the Second Circuit on what constitutes clearly-established law are not retroactive for purposes of defeating qualified immunity. This means that while plaintiff alleges that his rights were violated, he cannot proceed with the suit, because it was not clear at the time his rights were violated.What is also means is that the gratuitous sexual touching of an inmate after 2015 is actionable.

Monday, September 10, 2018

Newly-alleged racial slur is not enough to defeat summary judgment in discrimination case

This case brings us back to the basics on employment discrimination. The plaintiff in this case claims he suffered racial discrimination on the job. The Second Circuit does not see it that way, reviewing some of the ways that plaintiffs can prove their case, including the principle that a plaintiff cannot defeat summary judgment with a sworn statement that contradicts his prior sworn statement.

The case is Johnson v. Schmid, a summary order issued on September 7. Plaintiff was a social worker trainee working from the Connecticut Department of Children and Families, a position he obtained as a result of a prior settlement with the Department. Plaintiff was responsible for classroom instruction. He was fired, purportedly for poor job performance. Johnson's case alleges that other employees engaged in similar misconduct, he was held to different performance standards and a supervisor made a derogatory racial slur.

You can pursue a discrimination case on the basis that you were singled out for the misconduct that everyone else was also engaging in. But that path to victory is difficult to satisfy. You have to show that you and the co-workers hold comparable positions. Plaintiff cannot prove that, because his fellow errant co-workers were instructors and plaintiff was a social worker trainee, which means they were supervisors and plaintiff was their student. There is no comparison argument to be made.

The racial slur evidence is more interesting. Johnson told his supervisor he might file a lawsuit over his mistreatment. He claims the supervisor responded, "Are you threatening me, boy?" That evidence might help plaintiff, but the "boy" allegation did not surface until plaintiff's summary judgment opposition; he did not include "boy" in his interrogatory answers, "and he has not even attempted to explain his initial omission of the racial epithet that he now relies on as key proof of race discrimination." You cannot sandbag your opponent with evidence like this. If you have the evidence, use it at the outside of the lawsuit. Waiting until summary judgment is prohibited when this new evidence contradicts a prior show statement. While plaintiff's "boy" allegation does not exactly contradict his prior statement, is represents a significant change from the prior allegation.

The retaliation case also fails. The Court of Appeals (Sack, Raggi and Chin) highlight the "extensive and largely undisputed evidence detailing concerns with Johnson's performance in reports, evaluations, and memoranda," and plaintiff "has not produced any evidence to allow a reasonable jury to conclude that the Department's concerns about his poor performance were fabricated."

Friday, September 7, 2018

First Department issues another expansive ruling under the City Human Rights Law

The Appellate Division, First Department periodically issues a ruling that emphasizes how the New York City Human Rights Law is far more expansive than its federal and state counterparts. Often these rulings are written by Presiding Justice Acosta. In this case, the First Department says the City law makes it illegal to fire someone because of the identity of his spouse.

The case is Morse v. Fidessa Corp. issued on September 6. Plaintiff alleges that defendant terminated his employment "after an employee who Fidessa believed was married to plaintiff left its employ." Plaintiff's spouse went to work for another financial services firm. Plaintiff further alleges that he was told that "if he divorced Wakefield, he would be reconsidered for re-employment."

The City law prohibits terminating employees because of their marital status. For years, courts interpreted this provision to make it unlawful to fire someone because they were married or single. Firing someone because of the identity of the employee's spouse did not count. The case standing for that proposition is Levin v. Yeshiva University, 96 N.Y.2d 484 (2001). Levin borrowed its reasoning from Manhattan Pizza Hut v. State Division of Human Rights, 51 N.Y.2d 506 (1980), which interpreted the New York State Human Rights Law. But in 2005, the New York City Council passed the Civil Rights Restoration Act, which emphasized that the City law was always meant to be interpreted expansively and not identically to comparable state and federal statutory provisions. The Council in 2016 again amended the City law to re-emphasize this.

Under the 2005 Act, Levin is now rejected (even though it was issued by the New York Court of Appeals, which is senior to the Appellate Division). As he has done in other cases, Justice Acosta includes language from the legislative history of the City law requiring courts to expansively intepret the statute, and he cites the three leading cases in this area, Albunio v. City of New York, 16 N.Y.3d 472 (2011), Bennett v. Health Mgt. Systems, 92 A.D.3d 29 (1st Dept. 2011) and Williams v. New York Housing Auth., 61 N.Y.3d 62 (1st Dept. 2009), which the City Council in 2016 said accurately applies the pro-plaintiff interpretative standards governing the City law. The First Department states, "courts must play a highly active role in the development of the City HRL by interpreting all cases in a manner consistent with the goal of providing unparalleled strength in deterring and remedying discrimination."

What it means for this case is that "marital status" under the City law "may refer to whether to whether an individual is married or not married. It may also refer to whether two individuals are married to each other or not married to each other." Since the First Department deems this a reasonable interpretation of the City law "as the most plaintiff-friendly interpretation, it is the one that must be adopted." In part, this is because "a narrow interpretation of 'marital status' would allow a wide range of discriminatory conduct -- including conduct arising out of assumptions based on stereotypes -- to continue unabated. Only a broader interpretation of marital status will further the 'play no role' standard."

Wednesday, September 5, 2018

Circuit upholds NLRB ruling against health-care employer

The Court of Appeals has upheld a ruling from the National Labor Relations Board that found that a health services company violated the labor laws in hiring employees without seniority and other union protections after they worked for a management company affiliated with the employer.

The case is HealthBridge Management v. National Labor Relations Board, decided on August 23. In 2006, HealthBridge subcontracted the supervision of its housekeeping workers to Healthcare Services Group. The employees did the same work for HSG that they did for HealthBridge and remained on HealthBridge's payroll. When the subcontracting relationship ended a few years later, the 48 employees who "worked" for HSG had to apply to work for HealthBridge again but they would lose certain union benefits, like job security and health insurance. Most of them were rehired by HealthBridge, but the rehiring interviews were really shams, i.e., "non-existent, perfunctory or cursory."

The Court of Appeals reviews NLRB rulings if the decision is "reasonably based" in the National Labor Relations Act. "It is settled law in this circuit that an employer may not 'avoid the obligations of a collective bargaining agreement through a sham transaction or technical change in operations' that amounts to a 'disguised continuance.'" In addition, "other circuits have recognized that temporary shutdowns in business operations do not terminate unionized employees’ rights under a CBA." That is what happened here, the Court of Appeals (Jacobs, Droney and Underhill [D.J.]) says,

"[T]he record,” as the Board pointed out, is “even more indicative of unlawful conduct than [the record] presented in many [comparable] cases” of NLRA violations. In such comparable cases, an employer terminates its employees, dissolves, reconstitutes itself as an alter ego entity, and rehires its old employees without the contractual entitlements of their prior positions. Here, the entity bound by the CBAs -- HealthBridge -- did much the same thing without the hassle of a metamorphosis. HealthBridge effected its scheme by temporarily loaning its employees to a third-party subcontractor; but in no material way does that differentiate this case from our line of alter ego cases or the case law of other circuits holding that CBAs survive brief, manufactured breaks in direct employment. As in those cases, the employees here were off-loaded and then rehired (without their contractual rights) to perform the same work, at the same site, for the same ultimate beneficiary. Insofar as there are distinctions, they do not assist HealthBridge: the third-party transactions through which HealthBridge (as it were) laundered its employees had the chief practical effect of divesting those employees of their contractual rights. Indeed, the record supports the conclusion that the dominant (if not sole) purpose of HealthBridge’s use of the subcontractor was to disguise what amounts to a quasi alter-ego scheme.
The employer committed some other NLRA violations. It did not hire two of the employees through the sham process, and it even threatened to call the police on workers who would not vacate the premises or accede to the unlawful elimination of their bargained-for security. This threat had the potential to coerce the employees into giving up their collective bargaining rights.