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A Colorado federal judge recently ordered the City and County of Denver to pay $1.67 million to job applicants who alleged that Denver’s employment screening tests had a disparate impact on black and Latino applicants.  The class action was tried in an 8-day bench trial in April 2016 after Judge Krieger denied summary judgment.

Denver used ACCUPLACER tests published by College Board as pre-placement tests.  The tests were developed to place students in college-level courses and were not validated for use in making hiring decisions.

This case is a rather expensive reminder that any type of employment test must be validated for employment purposes.  The EEOC has issued guidance on the use of employment tests that provides some best practices for employers to follow.

The most important thing to think about is whether the test is really job-related.  In other words, does the test actually relate to job skills that are required for the job?  Then, the test must also be checked to insure that it does not have a disproportionate impact on any protected class.

Employers who have tests validated once cannot simply assume that the test is safe to use in perpetuity.  If job duties or skills have changed for the position for which the test is being administered, then the test should be re-validated.

Finally, employers should not just assume that because a test is simple it does not need to be validated.  Even a simple math test given to applicants who may handle money would need to be validated.

 

As many of you probably know, the EEOC has issued a proposed rule that, if adopted, would require significant changes to the EEO-1 reporting requirements.  The rule proposal is designed to help the EEOC gather data related to pay discrimination claims.  If adopted, it will require employers who are required to complete annual EEO-1 reports to submit pay data for all employees in addition to the number of employees in each racial classification.

This rule is likely going to increase the number of investigations and complaints filed alleging pay disparity.  The EEO-1 reports, by themselves, will be used in a broad sense to identify statistical anomalies that may trigger an investigation.  Missing from that raw data will be any legitimate reasons for pay disparities, such as experience and education levels.  However, employers will be required to comply with what could be a lengthy investigation process.

The comment period is currently scheduled to end on April 1, 2016.  Recently, ten Republican senators sent a letter to the EEOC asking for the comment period to be extended 90 days.  No word yet on whether the extension will be granted.

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Another employer has settled a GINA class action brought by the EEOC – for $187,500.

The EEOC told a Practising Law Institute conference two years ago of a number of workplace issues which it planned to address, one of which was  targeting violations of the Genetic Information Nondiscrimination Act (“GINA”).  The law was new (2009), and few cases had been filed.

What Is “GINA?”

GINA makes it illegal to discriminate against employees or job applicants because of genetic information, which includes family medical history, and restricts employers from requesting, requiring or purchasing such information.

Under GINA, employers cannot, in the hiring process, request such genetic information and family medical history.

genetics : Orange cartoon character with loupe and dna. White background.

The First GINA Lawsuit

The first lawsuit ever filed by the EEOC alleging genetic discrimination under GINA was settled in May of 2013.  The EEOC alleged in that Oklahoma case that the employer refused to hire a woman who had been given an offer of a permanent position because tests it had conducted concluded that she had carpal tunnel syndrome (“CTS”). The company had sent her to an outside laboratory for a drug test and physical, and there she had to fill out a questionnaire disclosing the existence of numerous listed disorders in her family medical history.

According to the EEOC, “[t]he questionnaire asked about the existence of heart disease, hypertension, cancer, tuberculosis, diabetes, arthritis and ‘mental disorders’ in her family. [She] was then subjected to medical testing, from which the examiner concluded that further evaluation was needed to determine whether [she] suffered from carpal tunnel syndrome (CTS).”

Although her own doctor found that she did not have CTS, her offer was revoked because the company’s outside lab indicated otherwise.

genetics : Genetics sign on a white background. Part of a series.

GINA And The EEOC’s Strategic Enforcement Plan (“SEP”)

On May 17, 2013 we reported that in accordance with the priorities in its Strategic Enforcement Plan (“SEP”) (and its promise to the PLI conference) the EEOC filed a GINA class action against a Corning, N.Y. nursing and rehabilitation center, its first systemic lawsuit under GINA.

The EEOC alleged that the company conducted post-offer, pre-employment medical exams of applicants, and annual exams if the person was hired, and requested family medical history.  The case was settled for $110,400.

The New Settlement

The EEOC has just announced that it has settled another GINA class action brought against three California farm suppliers who required job applicants to take physical exams and fill out questionnaires which asked about medical conditions, and the applicants’ family medical histories.

One applicant was required to report disability-related information and family medical history which was unrelated to the job requirements, and ultimately refused hiring “due to his perceived disability.”

Takeaway

An EEOC attorney cautioned employers: “The law with respect to genetic information is relatively new, and this is one of the first cases resolved in litigation by the EEOC in this district.  … Employers need to familiarize themselves on the prohibitions with respect to pre-employment inquiries and maintaining the confidentiality of medical information.”

Another EEOC attorney summed up compliance with GINA:  “There are strict guidelines prohibiting inquiries into a job applicant’s medical condition and disability prior to hire. Even after hire, employers should avoid asking questions about an applicant’s medical condition if it is not job-related. With respect to genetic information – or family medical history – the law is even more restrictive in that most employers may never ask or acquire genetic information from applicants or employees.”

 

On May 17, 2013 we reported that in accordance with its priorities in its Strategic Enforcement Plan (“SEP”) the EEOC announced that it filed a GINA class action against The Founders Pavilion, Inc., a Corning, N.Y. nursing and rehabilitation center, its first systemic lawsuit under GINA.

GINA,  the Genetic Information Nondiscrimination Act, has been around since 2009 and makes it illegal to discriminate against employees or job applicants because of genetic information, which includes family medical history, and restricts employers from requesting, requiring or purchasing such information.  Under GINA, employers cannot, in the hiring process, request such genetic information and family medical history. 17893116_s

The EEOC alleged that the company conducted post-offer, pre-employment medical exams of applicants, and annual exams if the person was hired, and requested family medical history.

The EEOC has now reported a settlement in this case which amounts to a total class award of $110,400, to compensate people who were hired when the company used a form with a “Family History” questionairre.

The first lawsuit ever filed by the EEOC alleging genetic discrimination under GINA was settled last year.  The EEOC alleged in that Oklahoma case that the employer refused to hire a woman who had been given an offer of a permanent position because tests it had conducted concluded that she had carpal tunnel syndrome (“CTS”).   The company had sent her to an outside laboratory for a drug test and physical, and there she had to fill out a questionnaire disclosing the existence of numerous listed disorders in her family medical history. According to the EEOC, “[t]he questionnaire asked about the existence of heart disease, hypertension, cancer, tuberculosis, diabetes, arthritis and ‘mental disorders’ in her family. [She] was then subjected to medical testing, from which the examiner concluded that further evaluation was needed to determine whether [she] suffered from carpal tunnel syndrome (CTS).”

Although her own doctor found that she did not have CTS, her offer was revoked because the company’s outside lab indicated otherwise.

GINA violations indeed are being targeted by the EEOC — be aware!

 

 

The New York Times reported today that Merrill Lynch has agreed to pay $160 million to settle a racial discrimination case filed eight years ago on behalf of 700 black brokers.  The settlement funds will be distributed to all Merrill black brokers and trainees employed since May 2001, who may number 1,200.

The Times said that this settlement “would be the largest sum ever distributed to plaintiffs in a racial discrimination suit against an American employer.”

Columbia Law Prof. John C. Coffee Jr was quoted as saying that “This is a somewhat heroic story because these plaintiffs just kept fighting and fighting. This is like a triple-overtime win.”

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Don’t say that the EEOC did not warn you – it included GINA as one of its priorities in its Strategic Enforcement Plan ("SEP").  So now, hot on the heels of its first GINA lawsuit (and settlement), the EEOC announced thatit has filed a GINA class action against The Founders Pavilion, Inc., a Corning, N.Y. nursing and rehabilitation center.  Under GINA, employers cannot, in the hiring process, request genetic information and family medical history.

The EEOC alleges that the company conducted post-offer, pre-employment medical exams of applicants, and annual exams if the person was hired, and requested family medical history.

 

Elizabeth Grossman, the NY EEOC’s regional attorney said that "GINA applies whenever an employer conducts a medical exam, and employers must make sure that they or their agents do not violate the law.  Here, not only did the employer ask for prohibited information, it also discriminated against individuals with disabilities or perceived disabilities as well as pregnant women."

 

That last statement should resonate with health care facilities, who we have repeatedly warned that the EEOC is targeting under the ADA for disability discrimination.  Now, it seems, it is targeting them under GINA too.

 

 

In a major victory for employers, a New York federal circuit court ruled yesterday that an employer with a mandatory arbitration agreement with Goldman Sachs can require an employee to go to arbitration on a Title VII class action because Title VII contains no substantive right to pursue a pattern-or-practice sex-bias claim.

 

The employee alleged in court that Goldman Sachs engaged in “a continuing pattern and practice of discrimination based on sex against female Managing Directors, Vice Presidents, and Associates.”   However, the Managing Director Agreement executed by the employee when she was promoted to that position contained an arbitration clause which read that "any dispute, controversy or claim arising out of or based upon or relating to Employment Related Matters will be finally settled by arbitration in New York City before, and in accordance with the rules . . . of, the New York Stock Exchange, Inc. (“NYSE”) or  …  the National Association of Securities Dealers (“NASD”)."

 

 

Goldman Sachs moved to compel arbitration under the  Federal Arbitration Act, claiming that “a party cannot be compelled to arbitrate on a class-wide basis where the relevant arbitration clause is silent as to the arbitration of class claims,” and that the employee’s discrimination claims must therefore be arbitrated individually.

 

 

The employee responded that under Title VII she has a substantive right to pursue a pattern-or-practice claim, which is available only to class plaintiffs, and that the arbitration clause in her agreement must therefore be invalidated because arbitration would preclude her from vindicating a statutory right.

 

 

The appeals court sided with Goldman Sachs, and found that “Because we disagree that a substantive statutory right to pursue a pattern-or-practice claim exists, we reverse.  [The employee] contends, and the [lower] court agreed, that individual arbitration would preclude her from vindicating her right to bring a substantive “pattern-or-practice” claim under Title VII. But such a right does not exist (emphasis added).”  

 

 

The Court stated that “in Title VII jurisprudence ‘pattern-or-practice’ simply refers to a method of proof and does not constitute a ‘freestanding cause of action’”

 

Big victory for employers!

 

As predicted in a previous post, another employer has attempted to expand the recent Supreme Court decision upholding arbitration agreements to quash a potential class action sexual harassment case.

On Tuesday, O’Melveny & Myers, LLP argued before a California federal court that the recent AT&T Mobility v. Concepcion decision compels arbitration in a putative class action brought by a former secretary who alleges sexual harassment.  That putative class action is a discrimination case with a spin as the claim is being raised on behalf of employees who previously arbitrated employment claims against the firm under an allegedly unenforceable contract.  If O’Melveny’s motion is granted, the arbitration will determine if the previous arbitrations should have been compelled.  In the meantime, the recently reintroduced Arbitration Fairness Act of 2011, which would overturn Concepcion is still parked in Committee.

Now is the time for employers to review and revise employment agreements to include arbitration clauses or to consider whether employees should be presented with arbitration agreements.

In a statement issued on June 10, 2010, President Obama made a direct call to the Senate to enact the Paycheck Fairness Act.   As employers may remember, there was a flurry of activity surrounding the United States Supreme Court’s Lily Ledbetter decision which narrowly construed the applicable statute of limitations in cases brought under the Equal Pay Act.  Indeed, the 2007 decision became a part of President Obama’s campaign platform of promoting equal opportunities for all people. It was no accident that the first bill signed into law by President Obama was the Lily Ledbetter Fair Pay Act, which directly overruled the Supreme Court’s decision.  Nearly simultaneously, the Paycheck Fairness Act was introduced by then Senator Hillary Rodham Clinton and Rep. Rosa DeLauro to strengthen the Equal Pay Act (“EPA”).  The Paycheck Fairness Act, as proposed, caused an initial stir, which was quickly lost in the fray surrounding the various economic stimulus initiatives and then the health care reform debate. Now that the Paycheck Fairness Act seems to be coming off the back-burner, employers should watch the debate with interest. The Paycheck Fairness Act, as proposed, makes several key changes to the EPA, which exposes employers to additional liability, which are as follows:

  • Enhanced Damages — Plaintiffs would be permitted to recover compensatory and punitive damages. The EPA currently provides only for liquidated damages and back pay awards.
  • Opt-out Class Actions — Class action lawsuits could be filed pursuant to the Federal Rules of Civil Procedure (FRCP). This would make it easier to file class actions as the EPA, adopted prior to the current federal class action rule, requires plaintiffs to opt in to a suit. Under the federal rule, class members are automatically considered part of the class until they choose to opt out of the class.
  • Limitation of Affirmative Defense — Currently, an employer may assert an affirmative defense that the pay differential between men and women is based on a “factor other than sex.” This defense had been broadly interpreted. The Act tightens this affirmative defense so that it can excuse a pay differential for men women only where the employer can show that the differential is truly caused by something other than sex and is related to job performance and consistent with business necessity.

Remember, it’s never too early or too late to start talking to your elected representatives about the Act.