Labor and Employment Litigation
Update

Friday, November 6, 2020
Brian P. Walter, Partner, Liebert Cassidy Whitmore

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Labor and Employment
Litigation Update

Brian P. Walter
LIEBERT CASSIDY WHITMORE
6033 West Century Blvd., Fifth Floor
Los Angeles, CA 90045
Telephone: (310) 981-2000 Facsimile: (310) 337-0837

Labor and Employment Litigation Update

Brian P. Walter, Partner, Liebert Cassidy Whitmore

DISCRIMINATION AND HARASSMENT

General Information about Discrimination and Harassment can be found in the Municipal Law Handbook, Chapter 4, “Personnel,” Section VIII, “Antidiscrimination Laws.”

http://onlaw.ceb.com/onlaw/gateway.dll?f=templates&fn=default.htm&vid=OnLAW:CEB

Employee Who Was Terminated Because of a Mistaken Belief He Was Unable to Work Need Not Prove Employer Had a Discriminatory Intent To Prove Disability Discrimination

Glynn v. Superior Court of Los Angeles County (Allergan) (2019) 42 Cal.App.5th 47

John Glynn worked for Allergan as a pharmaceutical sales representative. His job required him to drive to doctors’ offices to promote pharmaceuticals. In January 2016, Glynn requested, and Allergan approved, a medical leave of absence for his serious eye condition. Glynn’s doctor indicated that Glynn was unable to work because he could not safely drive. While on medical leave, Glynn repeatedly requested reassignment to a vacant position that did not require driving, but he was never reassigned.

On July 20, 2016, while on medical leave, Glynn became eligible for long-term, as opposed to short-term, disability benefits. That day, a temporary employee in Allergan’s benefits department sent Glynn a letter informing him that his employment was terminated due to his “inability to return to work by a certain date with or without some reasonable accommodation.” The temporary employee who sent Glynn the letter mistakenly believed that Allergan policy required termination once an employee transitioned from short-term to long-term disability benefits. In reality, Allergan’s policy only required termination once the employee had applied and been approved for long-term disability benefits.

The day after Glynn received the termination letter, he emailed a letter to the Human
Resources Department stating that: he never applied for long-term disability benefits; he could work in any position that did not require driving; and he disputed the termination decision. After Allergan did not reinstate Glynn, he sued the company alleging various disability discrimination and other claims.

In the lawsuit, Allergan moved for summary judgment, and the district court dismissed a number of Glynn’s claims, including his disability discrimination claim. However, the Court of Appeal concluded that the trial court erred in dismissing Glynn’s disability discrimination claim.

California has adopted a three-stage burden-shifting test for Fair Employment and
Housing Act (FEHA) discrimination claims. However, this three-stage test does not apply if the employee presents direct evidence of discrimination. In disability discrimination cases, the

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threshold issue is whether there is direct evidence that the motive for the employer’s conduct was related to the employee’s physical or mental condition.

Here, the court concluded there was direct evidence of discrimination. An employee alleging disability discrimination can establish the employer’s intent by proving: (1) the employer knew that employee had a physical condition that limited a major life activity, or perceived him to have such a condition; and (2) the employee’s actual or perceived physical condition was a substantial motivating reason for the employer’s decision to terminate or to take another adverse employment action. Allergan terminated Glynn because a temporary employee perceived, albeit mistakenly, that he was totally disabled and unable to work.

The court further reasoned that even if the employer’s mistake was reasonable and made in good faith, a lack of discriminatory intent does not preclude liability for a disability discrimination claim. This is because California law does not require an employee with an actual or perceived disability to prove that the employer’s adverse employment action was motivated by animosity or ill will against the employee. Instead, California’s law protects employees from an employer’s erroneous or mistaken beliefs about the employee’s physical condition. In short, the Legislature decided that the financial consequences of an employer’s mistaken belief that an employee is unable to safely perform a job’s essential functions should be borne by the employer, not the employee, even if the employer’s mistake was reasonable and made in good faith. Accordingly, the court found that the trial court should not have dismissed Glynn’s disability discrimination claim.

This case highlights that even good faith mistakes can be the basis of a discrimination claim. Cities should ensure that employees responsible for making or approving termination decisions are well versed in the agency’s reasonable accommodation policies to limit the risk of mistakes.

Each Disability Retirement Check That Was Based on an Allegedly Discriminatory Policy Was a New Unlawful Employment Action.

Carroll v. City and County of San Francisco (2019) 41 Cal.App.5th 805

Joyce Carroll started working for the City and County of San Francisco (City) when she was 43 years old. After 15 years of service, Carroll retired at age 58 due to rheumatoid arthritis. On June 22, 2000, Carroll applied for disability retirement, and the City granted her request. Accordingly, Carroll received monthly disability retirement benefit payments.

On November 17, 2017, more than 17 years after her retirement, Carroll filed a complaint with the Department of Fair Employment and Housing (DFEH) alleging that the City violated the Fair Employment and Housing Act (FEHA) by discriminating against employees on the basis of age. Specifically, Carroll alleged that the City intentionally discriminated against employees hired over the age of 40 by providing them with reduced retirement benefits.

The City’s charter provides that the maximum disability benefit a disabled employee can receive is one-third of average final compensation. If an employee’s benefit falls below one-third

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of final average compensation, but the employee has worked for the City for at least 10 years before retiring, the City credits additional service time to the employee to increase the benefit. However, the City limits this imputed service time to the number of years the disabled employee would have worked for the City had he or she continued City employment until age 60. Accordingly, Carroll alleged that the City violated the FEHA by using a standard policy that had a disparate impact on older employees because older employees were entitled to less imputed service and thus, reduced retirement benefits.

The City moved to dismiss Carroll’s lawsuit arguing that the statute of limitations barred her claims because she failed to timely file an administrative charge. The City argued that the limitations period began running in 2000 when it granted Carroll’s disability retirement. Accordingly, the City argued the charge Carroll filed in 2017 was well outside the one-year statute of limitations. The trial court agreed and dismissed the lawsuit. Carroll appealed.

On appeal, Carroll argued that each retirement check she received constituted a new
FEHA violation. The Court of Appeal sided with Carroll and concluded that an unlawful event occurred each time Carroll received a discriminatory disability retirement payment. Accordingly, the limitations period restarted with each allegedly discriminatory check. The court reasoned that an employer’s discriminatory decision to take an unlawful employment action is actionable not only when made but also when prohibited acts or practices occur because of that decision.

The court noted that an unlawful action occurred each time the City paid the allegedly discriminatory retirement benefits. This interpretation is consistent with the FEHA and the command that courts liberally interpret its provisions. Moreover, the court noted that federal cases, that addressed whether paychecks issued pursuant to a discriminatory compensation scheme under Title VII, and other state court decisions, also support this conclusion.

Carroll also argued that her lawsuit was timely under a specific variation of the
“continuing violation theory.” That theory applies when an employee alleges a systematic corporate policy of discrimination against a protected class that was enforced during the limitations period and the employee is seeking to recover for injury during the limitations period. The court also agreed that Carroll’s lawsuit was timely under this theory because she alleged the City used a fixed discriminatory policy to pay reduced retirement benefits to employees hired over the age of 40, and that the City used this policy each month by paying reduced retirement benefits.

The court also determined that Carroll could maintain a “disparate impact” claim against the City. An employee can establish a disparate impact claim by demonstrating that an employer uses a particular employment practice that causes a disparate impact on one of the protected classes. The court noted that because the City’s monthly application of an employment policy has a disparate impact on employees who began their employment over 40, she could sue for these payments under that theory as well.

The impact of periodic payments – such as disability checks or paychecks – on a discrimination or wage and hour claim – greatly expands the time in which an employee or former employee can sue a city.

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Summary Judgment Upheld Where Employee Presented No Evidence of an Adverse Employment Action and Failed to Notify Employer of a Disability.

Doe v. Department of Corrections and Rehabilitation (2019) 43 Cal.App.5th 721

John Doe worked as a psychologist at Ironwood State Prison for the California
Department of Corrections and Rehabilitation (CDCR). Between 2013 and 2016, Doe submitted three accommodation requests to assist him with his concentration, including a quieter workspace, a thumb drive, and a small recorder. In support of his requests, Doe submitted medical notes from his physician, which indicated that Doe had a “learning disability,” a “chronic work related medical condition” and a “physical disability” that made him “easily distracted” and disorganized when under stress.

When CDCR could not accommodate Doe’s requests, he voluntarily took two paid medical leaves of absence. In 2016, during a third leave of absence, Doe submitted his resignation. Doe then sued CDCR, alleging discrimination, retaliation and harassment based on disability in violation of the Fair Employment and Housing Act (FEHA). Doe alleged he had two disabilities: asthma and dyslexia. Doe also alleged CDCR violated FEHA by failing to both accommodate his disabilities and engage in the interactive process.

The trial court granted summary judgment for CDCR and Doe appealed. The Court of
Appeal affirmed summary judgment for CDCR on the following grounds.

The Court of Appeal held that Doe’s discrimination and retaliation claims failed because he presented no evidence that he was subjected to an adverse employment action—an essential element of both claims. Doe alleged CDCR subjected him to adverse employment actions by (i) criticizing his work performance, (ii) ordering a wellness check when he was out sick, (iii) suspecting him of bringing his personal cell phone into work in violation of work policy, (iv) assigning him to a primary crisis position on the same day as a union meeting, and (v) forcing him to take medical leave when he did not receive his requested accommodations.

The Court of Appeal held that the CDCR’s alleged actions were minor conduct that upset
Doe but did not threaten to materially affect the terms and conditions of his job. Therefore, the actions did not reach the level of an adverse employment action. Further, Doe’s decision to take medical leave was not an adverse employment action because the leave was voluntary and Doe requested it. The Court of Appeal also affirmed that CDCR’s failure to accommodate Doe’s alleged disability did not qualify as an adverse employment action for the purposes of a discrimination or retaliation claim.

As for Doe’s harassment claim, the Court of Appeal held that none of the alleged conduct was subjectively severe enough to constitute harassment. Rather, each incident involved a personnel decision by Doe’s supervisor within the scope of his supervisory duties. Simply because Doe felt his supervisor performed those duties in a negative or malicious way did not transform the conduct into disability harassment.

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Finally, the Court of Appeal held that Doe’s accommodation and interactive process claims failed because he presented insufficient evidence to support that CDCR was on notice that he had a FEHA-covered disability. Doe’s medical notes indicated that he had a “chronic work related medical condition” and “physical disability,” but did not state that Doe had asthma or dyslexia. Further, the medical notes failed to describe the extent of limitations his disability caused, which rendered CDCR unable to determine whether it could reasonably accommodate Doe.

Cities should request employees provide reasonable documentation to support a request for accommodation for an alleged disability. This allows a city to determine whether there is a FEHA-covered disability and to consider the full range of potential accommodations in the interactive process.

Filing of Worker’s Compensation Claim Supported Equitable Tolling of Deadline to File FEHA Discrimination Claim Where There Was Factual Overlap Between Claims.

Brome v. California Highway Patrol (2020) 44 Cal.App.5th 786

Jay Brome began his employment with the California Highway Patrol (CHP) in 1996.
During his nearly 20-year career, other officers subjected Brome, who was openly gay, to derogatory, homophobic comments, singled him out for pranks, repeatedly defaced his mailbox and refused to provide him with backup assistance during enforcement stops in the field.

Brome eventually transferred CHP offices seeking a better work environment, but the offensive comments about his sexual orientation continued. Officers at Brome’s new office also frequently refused to provide Brome with backup assistance during enforcement stops, including high-risk situations that should be handled by at least two officers. Brome was the only officer who did not receive backup. Further, when Brome won an officer of the year award, the CHP never displayed his photograph, which was a break from practice.

Through 2014, Brome continued to complain to his supervisors. They told him they would look into it, but the problems continued, and Brome believed management refused to do anything about it. As a result, Brome feared for his life during enforcement stops, experienced headaches, muscle pain, stomach issues, anxiety and stress, and became suicidal. In January 2015, Brome went on medical leave and filed a workers’ compensation claim based on workrelated stress.

After Brome took leave, his captain sent him a letter stating that he hoped they could work together to resolve Brome’s work-related issues. Brome’s workers’ compensation claim was eventually resolved in his favor, and on February 29, 2016, Brome took industrial disability retirement.

On September 15, 2016, Brome filed a complaint with the Department of Fair
Employment and House (DFEH) asserting discrimination and harassment based on his sexual orientation and other claims under the Fair Employment and Housing Act (FEHA). The next day, Brome filed a civil lawsuit. The CHP sought to dismiss the lawsuit as untimely. Under the FEHA

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at the time of the lawsuit, an employee’s DFEH complaint must have been filed within one year of the alleged discriminatory or harassing conduct. While the crux of Brome’s claims occurred before his medical leave in January 2015, Brome did not file his administrative complaint until September 15, 2016. Accordingly, the CHP argued that Brome could only sue based on acts occurring on or after September 15, 2015. While Brome argued that various exceptions to the one-year deadline applied, the trial court ultimately dismissed Brome’s lawsuit. Brome appealed.

The Court of Appeal considered three exceptions that could extend the one-year deadline: equitable tolling, continuing violation, and constructive discharge.

First, the court determined that Brome’s workers’ compensation claim could equitably toll the one-year deadline for filing his DFEH complaint. The equitable tolling doctrine suspends a statute of limitations to ensure fairness. To use equitable tolling, the employee has to prove: (1) timely notice; (2) lack of prejudice to the employer; and (3) his or her own good faith conduct. The court concluded that Brome could establish all of the elements. Brome’s workers’ compensation claim put the CHP on notice of his potential discrimination claims because it had to investigate the circumstances that caused him work-related stress. The court said that a reasonable jury could not find that applying the equitable tolling doctrine would prejudice the CHP. Finally, the court noted that Brome exhibited good faith and reasonable conduct in waiting to file his complaint until after the resolution of his workers’ compensation claim.

Second, the court determined that the statute of limitations could be extended as a continuing violation. That doctrine allows liability for conduct occurring outside the statute of limitations if the conduct is sufficiently connected to conduct within the limitations period. To establish a continuing violation, an employee must show that the employer’s actions are: (1) sufficiently similar in kind; (2) have occurred with reasonable frequency; and (3) have not acquired a degree of permanence. The homophonic conduct against Brome was ongoing and very common, and a jury could find that it was reasonable for Brome to seek a fresh start at a different office and request assistance from his supervisors there once similar problems arose. Further, Brome’s supervisors consistently told him they would look into and address his concerns.

Finally, the court concluded that the constructive discharge theory could possibly apply.
To establish constructive discharge, an employee must show that working conditions were so intolerable that a reasonable employee would be forced to resign. The court found that Brome raised a triable issue as to whether his working conditions were so bad a reasonable employee would have resigned. For example, Brome was routinely forced to respond to high-risk situations alone. For these reasons, the court held that the trial court erred in dismissing Brome’s lawsuit. The court remanded the case back to the trial court for further proceedings.

Effective January 1, 2020, the statute of limitations to file a DFEH claim has been extended from 1 to 3 years. Cities have a legal duty to promptly investigate claims of discrimination and harassment to not only limit liability, but to provide a safe and productive workplace for all employees.

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U.S. Supreme Court Confirms a “But-For” Causation Standard for Section 1981 Discrimination Claims.

Comcast Corp. v. Nat’l Ass’n of African Am.-Owned Media (2020) 140 S.Ct. 1009

African-American entrepreneur Byron Allen owns Entertainment Studios Network
(ESN), which operates seven television networks. For years, ESN sought to have Comcast Corporation (Comcast), a cable television conglomerate, carry its channels. However, Comcast refused and cited lack of demand, bandwidth constraints, and other programming preferences for its decision. ESN then sued Comcast under 42 U.S.C. section 1981 (Section 1981). Section 1981 guarantees that all persons have the same right to make and enforce contracts as is enjoyed by white citizens. ESN alleged that Comcast systematically disfavored “100% African Americanowned media companies” and that the reasons Comcast cited for refusing to carry its channels were pretextual.

The case made its way up to the United States Supreme Court (USSC) to resolve a split among the U.S. Circuit Court of Appeals regarding what type of causation is required to prevail in a Section 1981 claim. Some circuits, including the Ninth, say that a plaintiff only needs to show that race played “some role” in the defendant’s decision-making process. Other circuits, however, have held that a plaintiff needs to establish that racial animus was a “but-for” cause of the defendant’s conduct. Under that standard, a plaintiff must demonstrate that if not for the defendant’s unlawful conduct, its alleged injury would not have occurred.

The USSC concluded that in a Section 1981 claim, the plaintiff bears the burden of showing that race was the but-for cause of its injury. The court examined the statute’s language, structure and legislative history to determine that a Section 1981 claims requires but-for causation. For example, the court noted that when it first inferred a private cause of action under Section 1981, it described it as “afford[ing] a federal remedy against discrimination . . . on the basis of race,” which strongly supports a but-for causation standard. The court also noted that the neighboring statute, 42 U.S.C. section 1982, demands the same causation standard.

While ESN argued that the “motivating factor” causation test found in Title VII of the
Civil Rights Act should apply, the USSC declined to extend that standard to Section 1981 claims. The court noted that Section 1981 predates the Civil Rights Act by nearly 100 years and does not reference “motivating factors.” The court explained: “[We] have two statutes with two distinct histories, and not a shred of evidence that Congress meant to incorporate the same causation standard.” The court also dismissed ESN’s argument that the motivating factor test should apply only at the pleading phase of a case.