Title VII’s Pre-Suit Filing Is Not Jurisdictional

4 Jun

Much has been said about Fort Bend County, Texas v. Davis, No. 18-525 (June 3, 2019) in the past 24 hours.  Some articles make it sound as if a Title VII aggrieved party can bypass the EEOC’s charge-filing requirement, file a discrimination lawsuit, and all will be well.  Not so.  If a Title VII aggrieved party does just that, a respondent employer will likely filed a motion to dismiss in the court case for failing to exhaust administrative remedies.  As the court’s opinion clearly intimated, it would be foolhardy for a party to do just that only to end up back where he or she started, which is filing a discrimination charge in the first instance.  Id. at 11.

The Davis opinion will not dramatically change the existing practices of plaintiffs and defendants.  But it does place the burden on the defendant to raise the lack of a pre-suit discrimination charge filing at the earliest moment or it can be waived or forfeited.

If any employer has any doubt about whether claims raised in a subsequent lawsuit were initially brought in a discrimination charge with the EEOC, that objection must be pressed early.  Plaintiffs have time and time again included new claims in lawsuits that were not initially brought in pre-suit discrimination charges.  Employers need to fully understand that a claim that someone was terminated because of one’s race is not the same as a racially hostile work environment that did not lead to the employee’s termination.  These two claims are also much different than a retaliation claim.  Plaintiffs may have many claims arising from their employment that could give rise to a charge, and a keen eye must discern what was and what was not included in the discrimination charge.


Illinois Gender Violence Act Applies to Legal Entities

31 May

The Third District Appellate Court answered “yes” to the certified question of whether the Illinois Gender Violence Act, 740 ILCS 82/5 et seq. (“Act”) applies to legal entities, such as a corporation.  Gasic v. Marquette Management, Inc., 2019 IL App (3d) 170756.

The Act creates a cause of action against a person or persons that perpetrate gender-related violence, such as an assault or battery.  The Act defines “perpetrating” as “either personally committing the gender-related violence of personally encouraging or assisting the act or acts of gender-related violence.”  740 ILCS 82/10.

When defining terms in a statute, the court was persuaded that a “person” could include a corporation, 2019 IL App (3d) 170756, par. 11, and was also swayed by U.S. Supreme Court precedent where corporations enjoyed certain constitutional rights.  Id., par. 15.

What the court was not addressing was the merits of the lawsuit.  There, the plaintiff only alleged that the defendant knew that one of its employees received numerous complaints from third parties concerning his sexually harassing behavior and failed to protect others.   The case was thus remanded to the circuit court for further consideration.  So it is possible that the defendant corporation could file a motion to dismiss and successfully argue that the allegations do not meet what is required under the Act.

The Act now provides another arrow for plaintiffs who are victims of gender violence to seek monetary damages, including the recovery of attorney’s fees.  740 ILCS 82/15.  Causes of action under the Act have been alleged in sexual harassment cases in state and federal court.  Aided by Gasic, courts will likely see more gender violence claims being filed against employers (or former employers) and appeals will likely result on what constitutes “perpetrating” under the Act.  740 ILCS 82/10.

Title VII: Lateral Job Transfer, Without More, Did Not Deprive Employee of Opportunities

22 Jun

An employer may decide to have its workforce closely mirror the local population to which it serves.  For instance, a store frequented by predominantly Spanish speakers may require management to hire Spanish-speaking or bilingual employees.  Some, if not most of the employees that fall into this category, may be Hispanic.

This business practice was attacked by the Equal Employment Opportunity Commission (E.E.O.C.).  In E.E.O.C. v. AutoZone, Inc., et al., No. 15-3201 (7th Cir. June 20, 2017), the E.E.O.C. brought suit on behalf of a Black worker who was transferred from one of defendant’s stores that served predominantly Hispanic customers to a different store.  The employee (named Stuckey) did not lose any benefits or stature as a result of the transfer.  He filed a discrimination charge and the E.E.O.C. brought suit under a relatively under-utilized section of Title VII of the Civil Rights Act of 1964, as amended, which is 42 U.S.C. § 2000e-2(a)(2), which reads:

(a) Employer practices

It shall be an unlawful employment practice for an employer—


(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.

The E.E.O.C. argued that Stuckey did not have to suffer any tangible loss, such as decreased compensation, in order for section 42 U.S.C. 2000e-2(a)(2) to be violated.  The E.E.O.C. maintained that any transfer to limit, segregate or classify employees because of race automatically violates the statute.  Slip op. at 7.  The Seventh Circuit disagreed.

42 U.S.C. 2000e-2(a)(2) casts a wider net than subsection (a)(1) because any employment practice under subsection (a)(2) that “would deprive or tend to deprive” any individual of opportunities would violate that subsection.  Slip op. at 10.  But Stuckey suffered no tangible loss as a result of the transfer and more importantly, there was no evidence put forth by the E.E.O.C. that the lateral transfer would tend to deprive Stuckey of employment opportunities in the future.  Id.

It could certainly be the case that multiple lateral transfers could work against an employee working up the proverbial management ladder.  The E.E.O.C. never pursued that evidentiary line, instead resting solely on a statutory argument to carry the day.  Employers catering toward their ethnic clientele need to be cautious that employee transfers from one store to another do not disadvantage an employee’s advancement and any concomitant benefits within the company.

Illinois Expands “Misconduct” Under Unemployment Insurance Act

12 Feb

Employees who are terminated for statutory “misconduct” are ineligible for benefits under the Illinois Unemployment Insurance Act (“Act”).  “Misconduct” means the deliberate and willful violation of a reasonable rule or policy of the employing unit, governing the individual’s behavior in performance of his work, provided such violation has harmed the employing unit or other employees or has been repeated by the individual despite a warning or other explicit instruction from the employing unit.  820 ILCS 405/602A.  Thus, not every type of “misconduct” results in ineligibility, much to an employer’s dismay.

Under Public Act 99-488, effective January 3, 2016, the Illinois legislature recently changed this definition to include other specific items of “misconduct”:

  1. Falsification of an employment application, or any other documentation provided to the employer, to obtain employment through subterfuge.
  1. Failure to maintain licenses, registrations, and certifications reasonably required by the employer, or those that the individual is required to possess by law, to perform his or her regular job duties, unless the failure is not within the control of the individual.
  1. Knowing, repeated violation of the attendance policies of the employer that are in compliance with State and federal law following a written warning for an attendance violation, unless the individual can demonstrate that he or she has made a reasonable effort to remedy the reason or reasons for the violations or that the reason or reasons for the violations were out of the individual’s control. Attendance policies of the employer shall be reasonable and provided to the individual in writing, electronically, or via posting in the workplace.
  1. Damaging the employer’s property through conduct that is grossly negligent.
  1. Refusal to obey an employer’s reasonable and lawful instruction, unless the refusal is due to the lack of ability, skills, or training for the individual required to obey the instruction or the instruction would result in an unsafe act.
  1. Consuming alcohol or illegal or non-prescribed prescription drugs, or using an impairing substance in an off-label manner, on the employer’s premises during working hours in violation of the employer’s policies.
  1. Reporting to work under the influence of alcohol, illegal or non-prescribed prescription drugs, or an impairing substance used in an off-label manner in violation of the employer’s policies, unless the individual is compelled to report to work by the employer outside of scheduled and on-call working hours and informs the employer that he or she is under the influence of alcohol, illegal or non-prescribed prescription drugs, or an impairing substance used in an off-label manner in violation of the employer’s policies.
  1. Grossly negligent conduct endangering the safety of the individual or co-workers.

The amendment provides that “For purposes of paragraphs 4 and 8, conduct is “grossly negligent” when the individual is, or reasonably should be, aware of a substantial risk that the conduct will result in the harm sought to be prevented and the conduct constitutes a substantial deviation from the standard of care a reasonable person would exercise in the situation.”

The amendment further provides that “Nothing in paragraph 6 or 7 prohibits the lawful use of over-the-counter drug products as defined in Section 206 of the Illinois Controlled Substances Act, provided that the medication does not affect the safe performance of the employee’s work duties.”

Employers should review their employment handbooks and other policy statements to take advantage of this expanded “misconduct” definition.  Some employers may already have similar language in their employee handbooks.  It may be worth including these items in policies to place the employee on clear notice of proscribed behavior.  One of the biggest problems facing employers is item 3, and there are a variety of cases addressing absenteeism and tardiness, with mixed results.  Businesses with considerable employee turnover and high unemployment claims should consider how to more thoroughly address item 3 and enact procedures to investigate excessive absenteeism and tardiness.


Employers Beware!: EEOC Seeks to Expand Retaliation Under Title VII

10 Feb

On January 21, 2016, the Equal Employment Opportunity Commission (“EEOC”) issued its “Proposed Enforcement Guidance on Retaliation and Related Issues” (“Guidance”) for public comment.  The EEOC’s last Guidance on this topic was May 1998, so this is a major update.  As expected, it contains employee-friendly positions that will no doubt open the doors to more retaliation complaints.

Title VII’s Participation Clause.  Title VII of the Civil Rights Act of 1964, as amended, prohibits not only status-based discrimination (discrimination based on characteristics), but also retaliatory discrimination against individuals who “participate” in discrimination investigations and who may “oppose” discriminatory practices or behavior.  The EEOC’s position is that internal complaints to employers before a discrimination charge is filed with the EEOC is encompassed within the “participation” clause of Title VII.  This breaks with some current judicial interpretations of the “participation” clause and if this gains traction in the courts, it will lead to more retaliation charges.

Retaliation Causation.  To prove retaliation, an employee needs to show that “but for” his protected participation/opposition to discrimination, that his employer would not have retaliated against him.  This is a high standard.  The EEOC has now opined that an employee can prove causation by mustering various types of circumstantial evidence, such as suspicious timing, verbal or written statements, comparative evidence that similarly-situated employees who did not complain were treated better, the falsity of the employer’s reason for the adverse action against the employee, and any other evidence from which an inference of retaliatory intent might be drawn.

Since retaliation complaints are now the most frequent type of discrimination charge, employers must now double their efforts to stave off behavior that could be construed as retaliatory.  Best employer practices include:

  • Employment policies with clear anti-retaliation language, with examples of retaliation, steps to avoid actual or perceived retaliation, reporting mechanisms, and consequences for engaging in retaliation;
  • Training managers and supervisors about anti-retaliation policies and behavior that could appear retaliatory, a zero-tolerance policy for retaliatory behavior, and encourage better workplace civility; and
  • Ensure that employment decisions are free of retaliatory bias by having other decision-makers review employment decisions

Continued Employment as Contractual Consideration for Employee Restrictive Covenants in Flux

2 Jul

Illinois appellate courts have adopted a bright-line rule that requires at least two years of employment for a restrictive covenant’s (e.g. covenant not to compete) enforceability.  This means that an employee must work at least two years with the employer in order for the employer to enforce the restrictive covenant.  In a recent case, one justice filed a dissenting opinion criticizing this approach, and advocated for a case-by-case determination.  McInnis v. GAG Motorcycle Ventures, Inc., 2015 IL App (1st) 130097, ¶ 55 (Ellis, J., dissenting).

Some federal courts in Illinois that have dealt with this exact issue have rejected the two-year rule because the Illinois Supreme Court has not adopted it.  Id. ¶ 67.  Federal courts are obligated to follow the highest court in the state, or in the absence of an opinion on the subject, the federal court tried to predict how the state high court would rule.  Id.  Some federal courts think Illinois’ Supreme Court would reject the two-year rule.  Id.

Thus, whether an employee’s restrictive covenant is enforceable can depend on what court system the case is brought—Illinois state court or federal district courts in Illinois.  Until the Illinois Supreme Court addresses the issue, the adequacy of the length of continued employment as sufficient consideration for a restrictive covenant will remain in limbo.

Is an Illinois Medical Marijuana User Protected Under the Right to Privacy in the Workplace Act?

19 Jun

In a recent Colorado Supreme Court decision, Coats v. Dish Network, 2015 CO 44 (June 15, 2015), an employee who used medical marijuana was terminated after failing his employer’s drug test.  He sued his employer claiming that Colorado’s Lawful Activities law prevented his employer from discriminating against him based on “lawful” conduct, such as being a registered medicinal marijuana user.  His employer argued that while medical use was permitted under state law, marijuana is still a Schedule I controlled substance (and hence” unlawful”) under federal law, there being no exception for medical use.  The Colorado Supreme Court agreed with the employer.

Illinois has its own medical marijuana law, the Compassionate Use of Medical Cannabis Pilot Program Act (“Act”), which contains a specific section dealing with the employer-employee relationship.

In Illinois, an employer cannot penalize an employee solely for that employee’s status as a registered qualifying patient or registered caregiver, unless certain exceptions apply.  410 ILCS 130/40(a). Section 130/50(g) of the Act specifically states that no cause of action shall be created in favor of an employee when the employer, in good faith, believes the registered user used, possessed, or was impaired by cannabis while on the employer’s premises or during the hours of employment.

Illinois also has a privacy protection statute similar to Colorado’s statute.  Illinois’ Right to Privacy in the Workplace Act states, in pertinent part:

(a) Except as otherwise specifically provided by law and except as provided in subsections (b) and (c) of this Section, it shall be unlawful for an employer to refuse to hire or to discharge any individual, or otherwise disadvantage any individual, with respect to compensation, terms, conditions or privileges of employment because the individual uses lawful products off the premises of the employer during nonworking hours.  820 ILCS 55/5 (emphasis added)

The Coats’ court expressly declined to address whether the employee’s use of medicinal cannabis was lawful under Colorado’s Medical Marijuana Amendment.  Coats, 2015 44, ¶ 21.  Since Section 130/50 of the Act applies to the employer-employee relationship, any Illinois court would likely need to address the Act’s provisions if a registered user was terminated from employment for failing a drug test or because the employer learned of the employee’s marijuana use outside working hours.  It would seem anomalous for the Act to give certain protections to employees during working hours, but allow the employer to penalize the employee for off-duty conduct that implicates medical cannabis use.

In the age of social media, employees otherwise private lives can inevitably become public fodder, and savvy employers may learn about employee behavior during non-working hours.  While Illinois’ privacy act can certainly be used by employees to prevent employers from taking adverse action against them based on “lawful” product use, medicinal cannabis use may fall into a gray area.

New Laws in Illinois in 2015

11 Mar

Pregnancy Discrimination

The Illinois Human Rights Act was amended to now prohibit discrimination based on pregnancy and childbirth.

Payroll Cards

Illinois employers can now pay employee via payroll card.  The payroll card is linked to the employer and the employer deposits the employee’s wages to the card.  The new law is very specific as to how the payroll card is to operate.

Retirement Savings

Illinois passed the Secure Choice Savings Program Act which requires covered employers to establish retirement savings accounts for employees.

Cook County Wage Theft Ordinance

Cook County passed a wage theft ordinance that would bar employers from contracting with Cook County, prevent an employer from receiving property tax incentives, or prevent an employer from obtaining a business license if the employer is found liable for violating certain state or federal laws concerning the payment of wages to employees.  The ordinance takes effect May 1, 2015.

Terms of an Employer’s Drug Policy Can Be Key in Unemployment Cases

9 Dec

Employers terminating employees for violating a company drug policy should pay close attention to the policy’s phraseology.  In Eastham v. The Housing Authority of Jefferson County, 2014 IL App (5th) 130209, the employer’s drug policy prohibited the use of alcohol and controlled substances “while in the course of employment.”  The employee admitted using cannabis weeks earlier and that he may fail a random drug test.  The employee was fired for violating the policy, but the test came back negative.

The appellate court affirmed the circuit court’s decision that the employee did not engage in “misconduct,” a three-pronged test, under the Illinois Unemployment Insurance Act (“Act”).  The court concluded that the policy only prohibited employees from using or possessing drugs or controlled substances, or being under the influence thereof, while on the job.  Since the drug test did not detect any measurable amount of cannabis in the employee’s system, the employee was not under the influence of cannabis while at work.

The employer also argued that since it receives federal funding, it was required to maintain a drug-free workplace.  The court, however, found that the federal statute did not require grant recipients to terminate employees for off-duty cannabis use.

The court distinguished generally misconduct that could warrant an employee’s termination from statutory “misconduct” under the Act.  While the former could justify a discharge, it does not necessarily mean that the reasons would disqualify the employee from receiving benefits under the Act.  The Act sets forth a higher “misconduct” standard as compared to a lower standard that employers may set for their own workforce.

Since medical cannabis is now legal in Illinois, employers should now be mindful of the Compassionate Use of Medical Cannabis Pilot Program Act when crafting drug policies.

A Reoccurring Problem for Towing Companies: Vehicle Owners Filing for Bankruptcy

21 Oct

No business likes not getting paid or compensated for the value of its services, especially when the right to payment is protected under state law.  This rings especially true for towing companies that perform relocation towing under the Illinois Commercial Relocation of Trespassing Vehicles Law or police towing under Chapter 4, Article II of the Illinois Vehicle Code (625 ILCS 5/4-200 et seq.).  Under applicable Illinois law, towing companies are given “possessory liens” for towing and storage fees, which means that until those fees are paid, the tower can “possess” the vehicle.  However, vehicle owners have found a nice antidote for payment: file for bankruptcy protection, rely on Thomson v. General Motor Acceptance Corp., LLC, 566 F.3d 699 (7th Cir. 2009) (a Seventh Circuit bankruptcy case) and require the towing company to return the vehicle for free to the debtor.  A towing company has recourse in the bankruptcy court: it can seek a replacement lien (or judicial lien) that is a substitute the tower’s possessory lien.  The tower can then file a proof of claim alleging that it has a secured claim for towing and storage charges.  This gives the tower higher priority status for payment, but it does not always result in payment occurring if the bankruptcy case is dismissed.  A tower would still have its judicial lien, but to enforce the lien, it would need to repossess the vehicle, sell it, and hope there are proceeds available to satisfy its lien.  When the amount of the lien is small, this procedure may be cost-prohibitive.

In some instances, the tower may have sold the vehicle pre-bankruptcy filing, in which case it could argue that the vehicle is not property of the debtor’s bankruptcy estate, and thus, should not be turned over to the debtor.  This assumes that the tower has complied with the sale procedure under applicable Illinois law.  Again, proving this could be expensive and time-consuming for a small lien amount.

When a tower gets a call from a vehicle owner or the owner’s bankruptcy attorney advising that a bankruptcy petition has been filed, the tower should obtain the name of the owner, the vehicle information and the bankruptcy case number and immediately contact its attorney to verify that the owner has indeed filed for bankruptcy protection.  The tower can then take steps to protect its interests in the bankruptcy court through the established remedies afforded to creditors.  Withholding possession of the vehicle without taking any affirmative steps in the bankruptcy court could prove problematic.  A debtor may file a motion for sanctions against the tower seeking not only immediate turnover of the vehicle, but also actual damages, punitive damages and attorney’s fees.