This page contains Lessons #11 to #20 | Main

Disparate impact #20
by Ross Runkel at LawMemo

"Disparate impact" is a legal theory for proving unlawful employment discrimination. However, most actual cases use the "disparate treatment" theory.

Disparate impact is the idea that some employer practices, as matter of statistics, have a greater impact on one group than on another.

A good example, taken from the first US Supreme Court Title VII case on the topic: When hiring laborers, the employer required applicants to have a high school diploma. The diploma requirement screened out vastly more blacks than it did whites. Therefore, there was a disparate impact based on race, even though there was no intentional discrimination.

The Supreme Court said that once the employees proved a significant disparate impact, the burden shifted to the employer to prove that the diploma requirement had "a manifest relationship to the employment in question."

Federal legislation enacted in 1991 says that if the employees prove that a practice causes a disparate impact, then the employer must demonstrate that the practice "is job related for the position in question and consistent with business necessity."

The disparate impact theory can be used whenever there is a large impact based on race, sex, religion, age, or other unlawful factor.

Disparate impact cases are complex (and expensive) because they require the use of experts and involve sophisticated statistical methods.

Age cases: In 2005 the US Supreme Court decided that the disparate impact theory can be used in age discrimination cases. However, these age cases are extremely difficult for employees to win for two reasons. First is that the 1991 legislation that makes things easier for plaintiffs does not apply. Second is that the Age Discrimination in Employment Act (ADEA) specifically permits any "otherwise prohibited" action "where the differentiation is based on reasonable factors other than age."

In the 2005 case a City gave police officers with less than five years service greater pay raises than more experienced officers. Obviously this had a negative impact on the 40-and-over group. The Court pointed out that the City based its decision on seniority, which was a "reasonable factor other than age." Therefore, the City won.

Coming next: Sex discrimination #21: Employment Law 101

LawMemo publishes Employment Law Memo.

BFOQ #19
by Ross Runkel at LawMemo

BFOQ stands for Bona Fide Occupational Qualification.

A BFOQ can be a defense for an employer that has engaged in intentional discrimination. The burden is on the employer to prove a BFOQ, and it is a difficult burden.

Title VII and the Age Discrimination in Employment Act (ADEA) prohibit discrimination because of:

• Race
• Color
• Religion
• Sex
• National origin
• Age

The BFOQ defense is available only in cases of discrimination because of:

• Religion
• Sex
• National origin
• Age

As Title VII puts it: Discrimination is OK "in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise."

No BFOQ for race or color discrimination.

Examples:

• State prison hires only men as guards in a jungle-atmosphere male-only prison.
• French restaurant hires only French chefs. (It won't work when hiring janitors because it's not "reasonably necessary" to the authenticity of the restaurant.)
• Airline requires pilots to retire at the age of 60. (Won't work for flight engineers because the government does not require it and the Airline could individually test the engineers to see which ones would be a high risk.)

Coming next: Disparate impact #20: Employment Law 101

LawMemo publishes Employment Law Memo.

Pretext #18
by Ross Runkel at LawMemo

A typical disparate treatment employment discrimination case will go through two procedural steps.

• Step one - Summary Judgment. After the employee files a complaint and the employer files an answer and there has been some discovery (such as depositions), the employer usually files a motion for summary judgment. The judge must decide whether there is enough evidence to justify sending the case to a jury.
• Step two - Trial. At a trial (either by a jury or by the judge without a jury), the judge or jury will decide who wins.

Here's the thought process for a judge who is deciding a motion for summary judgment: whether there is sufficient evidence of illegal discrimination to justify a trial.

Let's assume Jane applied for a job and didn't get hired.

• Employee's prima facie case: Jane shows that she is female, applied for a job that was open, has the basic qualifications, was not hired, and a male got the job. (That's our example. Every case is a little different.)

  This prima facie case creates an inference that Jane was not hired because of sex. The employer better rebut that case.

• Employer's rebuttal: The employer produces evidence of a legitimate non-discriminatory reason for not hiring Jane. (Such as: someone else was more qualified; Jane has a criminal record.) At the summary judgment stage, the employer doesn't have to prove this reason is true, but does have to produce some evidence.

  This rebuttal destroys the inference, so we're back to square one. Jane better do something, and what she better do is show pretext.

• Pretext: Jane will provide evidence that the non-discriminatory reason relied on by the employer is really a pretext for sex discrimination. Jane has to show that there is at least a factual dispute as to what the real reason was. Usually she needs to have proof that the employer's reason was manufactured, or the employer shifted from one reason to another, or something else to indicate that the employer's reason is false (that is, it's a pretext).

  If Jane can provide evidence of pretext, she should be able to move to Step Two - the Trial.

At the trial everything comes down to the question of what was the reason Jane was not hired. If the jury decides the reason was sex, then Jane wins. If the jury decides it was some other reason, then Jane loses. Note that Jane has to convince the jury that the reason was sex. It's not enough just to prove that the employer's reason was not true.

One more twist: Dual motive.

Sometimes there is evidence that the employer had two motives operating at the same time. One illegal one (sex), and one legal one (Jane has a flat personality). Now the employer will try to prove that the same decision would have been made even without the illegal motive. Under Title VII, Jane won't get any money damages, but she can get declaratory relief and attorney fees. Under some statutes, Jane simply loses.

Coming next: BFOQ #19: Employment Law 101

LawMemo publishes Employment Law Memo.

Employer's rebuttal #17
by Ross Runkel at LawMemo

Once an employee provides a court with a prima facie case, then the employer is allowed to rebut that case. Meaning what?

The type of rebuttal will depend on the type of prima facie case the employee used.

If the employee showed that the employer had a "facial" policy of unlawful discrimination, an effective rebuttal will be limited. Assuming a facial policy of hiring only women for a particular job, the employer must show that hiring women only is a bona fide occupational qualification (BFOQ). Essentially, that means that only a woman can do the job. Examples: wet nurse, attendant in a women's rest room. If the employer hires only French people to cook in a French restaurant, that's probably a BFOQ, but hiring only French janitors would not be. The burden of proof will be on the employer to prove this is a BFOQ.

If the employee uses "direct evidence" or "circumstantial evidence," then the employer rebuts by "articulating" a "legitimate non-discriminatory reason."

This means the employer tries to show that the reason the individual was not hired (or was fired, etc.) was something other than the reason that the employee claims. So, if the employee claims the reason was race, the employer will try to show that the real reason was poor performance, bad references, tardiness, or whatever - anything other than race. (At this point the employer needs to produce some evidence, but does not have to convince the court that it is true.)

The reason doesn't really have to be "legitimate" or "non-discriminatory." If the employee is claiming the reason was race, then the employer can rebut that by showing that the reason was age. Even though age is not a legitimate reason, it is a reason other than race, so that will work.

The effect? If the employer puts on evidence of a legitimate non-discriminatory reason, all that does is rebut the employee's prima facie case. It doesn't mean that the employer necessarily wins.

The employee then has an opportunity to prove that the reason asserted by the employer is really just a "pretext," or a fake or a cover-up for the real reason.

Coming next: Pretext #18: Employment Law 101

LawMemo publishes Employment Law Memo.

Employee's prima facie case #16
by Ross Runkel at LawMemo

A "prima facie case" is what an employee has to prove in a discrimination case in order to require an employer to explain itself in court. It's that minimum set of facts that a plaintiff has to include in a court complaint and be prepared to actually prove.

Because we're talking about minimums, I better make it clear that an employee better have more than this minimum if she actually expects to win a case.

I'll talk about three basic ways to make out a prima facie case.

First is when the employer has a "facial" policy of unlawful discrimination. For example, the employer has stated a policy that it will hire only females to be food servers. This is an extremely rare situation because employers rarely say such things out loud.

Second is where there is "direct evidence" or what you might call a smoking gun. For example, the employer says to an applicant "I'm not going to hire you because you're not white." Again, this is rare, but sometimes it happens. It's amazing how often an employee can prove that an employer said something like "Let's get rid of all the old employees" or "We've already hired one Mexican and that's enough."

Third, is "circumstantial evidence." Tons of cases fall into this category, and things can get a bit complicated.

The US Supreme Court had a famous case in which a man claimed he wasn't hired because he was black. The Court said this is what he had to show:

1. He was a member of a protected class (in this case, he was black).
2. He applied for the job, and the job was open.
3. He had the minimum qualifications for the job.
4. He was not hired.
5. The job remained open, or a person of another race was hired for it.

That framework became the model for all other circumstantial evidence discrimination claims: race, sex, religion, national origin, age, disability, whatever.

It also became the framework for cases involving not just failure to hire, but also discharge, demotion, transfer, suspension, and so on.

Of course, for each specific case the four parts of the proof might need to be adjusted to fit the different situation. For example, in a discharge case, the employee might have to prove that she was meeting the employer's reasonable expectations. In a case claiming discharge because of age, the employee might have to prove that someone significantly younger was kept on the job.

Notice that the Supreme Court made it pretty easy for a plaintiff to make out a prima facie case. But that doesn't necessarily mean the employee will win. It really means only that the employer must now put on some evidence that she was fired (or not hired, etc.) for a "legitimate non-discriminatory reason." (If the employer simply has no such evidence, then the employee wins, but that practically never happens.)

Coming next: Employer's rebuttal #17: Employment Law 101

LawMemo publishes Employment Law Memo.

Disparate treatment #15
by Ross Runkel at LawMemo

“Disparate treatment” is a basic concept in employment discrimination cases. Lawyers classify employment discrimination cases as either “disparate treatment” cases or “disparate impact” cases.

In a disparate treatment case, the employee is claiming that the employer treated her differently than other employees who were in a similar situation. For example, both Jane and Paul skip work one day; the employer fires Jane but does not fire Paul. If the reason is because Jane is female, then this is disparate treatment because of sex which would violate Title VII. If the real reason is because Jane had a worse attendance record, then it could be disparate treatment because of differences in attendance, and therefore lawful.

[In a disparate impact case, the claim is that the employer has a practice that has a much bigger impact on one group than on another. For example, the employer won’t hire janitors unless they are high school graduates. This might have a much bigger impact on blacks as a whole than on whites as a whole. I’ll discuss this theory in detail in a later lesson.]

In the typical disparate treatment case the central issue will be whether Jane was treated differently because she was female or because of her attendance record. The “because” or “why” will be crucial.

Courts have developed some interesting methods for proving (and disproving) why Jane was fired. I’ll spend a few future lessons on this. Here is what I’ll cover:

Employee’s prima facie case. There is rarely a smoking gun, because employers usually do not say out loud that they’re firing someone because of sex. Therefore, courts have created methods for employees to use “circumstantial evidence” to help prove their case.

Employer’s non-discriminatory reason. Once the employee puts in her circumstantial evidence, the employer will usually reply by saying that she was fired for a “legitimate and non-discriminatory reason.”

Pretext. Then the employee can respond to that by proving that the reason offered by the employer was just a “pretext” or cover-up for an improper reason.

Coming next: Employee's prima facie case #16: Employment Law 101

LawMemo publishes Employment Law Memo.

Discrimination #14
by Ross Runkel at LawMemo

"Discrimination" is usually considered a nasty word. But what does it really mean? And when is it illegal?

"Discrimination" used all by itself simply means to treat one thing differently from another. If I buy an orange instead of an apple, I've discriminated against the apple.

The key to figuring out what discrimination is legal and what is illegal is to ask the question "Why?" Because of what? What was the employer's motive?

In employment cases, it can be as simple as filling in the blanks in sentences that go like this:

- The employer refused to hire Jane because __________.
- The employer discharged Jane because __________.
- The employer refused to promote Jane because __________.
- The employer re-assigned Jane because __________.
- The employer did not give Jane a bonus because __________.
- The employer harassed Jane because __________.

The employer's action can be illegal if the "because" is race, color, sex, religion, disability, age, or some other reason that the law makes illegal.

But if the "because" is that Jane performed poorly or is habitually late, then the action will be legal.

Motive is everything. The difficulty is that a court or jury has to decide what the employer's motive was. That can be tricky business.

So I'll be spending several days discussing methods employees use to prove the wrong motive, and methods used by employers to show they had a proper motive.

Coming next: Disparate treatment #15: Employment Law 101

LawMemo publishes Employment Law Memo.

Whistleblowing #13
by Ross Runkel at LawMemo

A employee-whistleblower is an employee who reports (usually to a government agency) the illegal activities of the employer or of another employee.

Increasingly, the law protects employee-whistleblowers from retaliation from their employers.

Definition: The definition of a whistleblower has two important parts:

1 - There has to be a report or a complaint.

The law will give its maximum protection when the report is made to a government agency (anything from the police to OSHA), especially if the report is made to the agency that has some jurisdiction over the illegal activity.

What if the report or complaint is "internal," that is, made inside the employer's organization to the supervisor, manager, president, or board of directors? Sometimes this is not protected activity, and will depend on exactly which law is involved.

2 - Does there actually have to illegal activity?

What if the whistleblower thought the activity was illegal when actually it was not? Usually, the law gives the employee protection if she (1) actually believed the activity was illegal and (2) that belief was reasonable.

What protection does the employee get?

Assuming a whistleblowing law applies, the employer will be barred from retaliating against the employee because she made the report. That means the employer cannot punish the employee by discharging her, demoting her, or otherwise substantially changing her working conditions.

Laws to look for. (1) Many statutes (state and federal) have specific protections for employees who report illegal activities to specific government agencies. (2) In many states, whistleblowers are protected by the tort of "wrongful discharge in violation of public policy." (3) For public sector employees, the first amendment sometimes protects against retaliation for speaking out on what lawyers call "matters of public concern."

Are there financial rewards for being a whistleblower? Usually no. Usually the employee gets no more than protection against retaliation.

There is a specialized lawsuit called a qui tam action. If the employer has been defrauding the federal government, this lawsuit allows the employee to sue in the name of the government to try to recover the ill-gotten gains. The employee who wins such a suit is entitled to a percentage of the amount recovered.

Coming next: Discrimination #14: Employment Law 101

LawMemo publishes Employment Law Memo.

Trade secrets & confidential information #12
by Ross Runkel at LawMemo

Defining a "trade secret" is difficult, and courts don't always agree on what it means.

The general idea is that we are dealing with something unique and secret that gives the employer a business advantage over competitors who don't know about it.

Examples: Secret chemical formula, manufacturing process, pattern for a machine, tool, unique plan, information, customer list.

Excluded from the list is the general knowledge that an employee learns from the employer, even if the employer spent a lot of money to train the employee.

First, it has to be a secret. If the employer allows knowledge to get out into the public domain, then it's no longer a trade secret. If an outsider gets knowledge in an innocent way, he or she can use the information. (Be careful - If there is a patent or copyright, the employer will still have protection.) In order to be a secret, the employer must take reasonable steps to keep it a secret.

Second, It has to be something unique, original, or different from the ordinary information that is generally available to others in the same business.

Employers often enter into express non-disclosure agreements with employees. This helps define what is and what is not a trade secret, and it is one of the ways the employer takes steps to maintain secrecy. Courts usually enforce these agreements if the information is not generally available in the outside world and if the employer has taken steps to keep it a secret.

Non-employees can also be liable for misappropriating trade secrets. If an employee quits and goes to work at another business, and that business obtains the trade secret through that employee with knowledge of where it came from, then that business can be liable to the original employer.

Coming next: Whistleblowing #13: Employment Law 101

LawMemo publishes Employment Law Memo.

Non-competition agreements #11
by Ross Runkel at LawMemo

For a current employee, there is a duty not to compete against the employer. The employee has a duty of loyalty to the employer, is hired to advance the employer's interests, and should not "moonlight" for a competitor and should not drain away the employer's business by going into direct competition.

For a former employee, the starting point is that the law favors free markets and open competition. Therefore, courts rarely find an "implied" duty or agreement not to compete. For a former employee, there must be an express agreement that the former employee will not compete against the former employer.

Assuming a non-compete agreement is enforceable, the former employer usually can get an injunction against the employee and also recover money damages.

Non-competition agreements are enforceable if, and only if, they comply with certain guidelines.

First, there must be "consideration" for the employee's promise not to compete. That means that the employee must have received something in exchange for the promise. For a newly-hired employee, beginning employment is the consideration. For a current employee who signs a non-compete agreement, a few courts see continued employment as good consideration, but most do not. There must be something more such as an increase in pay, a promotion, or some other benefit to the employee.

Second, the agreement not to compete must protect some legitimate business interest of the employer. It can't be designed simply to suppress normal competition. Examples of legitimate business interests:

• Trade secrets.
• Customer lists.
• Other confidential information.
• Special or unique relationships with customers or clients.
• Goodwill.

Note: If either of the above two items (consideration and legitimate business interest) is missing, a court will not enforce a non-competition agreement.

Third, the scope of the agreement not to compete must be "reasonable" and not "overbroad." This involves three concepts.

1. Geography. The geographic limits must be reasonable. If the employer is a laundry in a small town, restrictions that go beyond that town would be unreasonable because they do not line up with the employer's legitimate business interest. (As businesses increasingly operate world-wide, courts have to wrestle with what is a reasonable geographic scope.)
2. Time. There has to be a time limit, but what is a reasonable time? Perhaps the amount of time it will take the employer to train a replacement.
3. Activity. Can the employee be prevented from doing any work for a competing business? Probably not. The new work has to have some relationship to the employer's legitimate business interest. A former tire salesperson should be allowed to work as janitor in a competing tire shop, but not as a manager.

If the scope of the agreement is overbroad, what will a court do? Most courts will (1) cut the scope of the agreement down to what is reasonable and (2) go ahead and enforce it. However, a few courts will not "fix" the agreement, and will simply not enforce it.

Coming next: Trade secrets & confidential information #12: Employment Law 101

LawMemo publishes Employment Law Memo.

---

	Web www.LawMemo.com  This form will search the LawMemo web site. It does not include the Caselaw Database.

Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc. Employment Law Memo emails designed for lawyers.  Expert summaries of decisions from all federal and state appellate courts.  Direct link to full text.  Click here for free 4-week subscription