Settlement and the Older Workers Benefit Protection Act

         

         When completing employment settlement or separation agreements for employees over 40 years old, an employment attorney might feel tempted to simply recycle the language which the attorney has used in prior settlement agreements, in order to ensure that the agreement complies with the provisions of the Older Workers Benefit Protection Act (“OWBPA”).  However, a recent United States District Court decision out of the District of Colorado discusses several different ways in which employees can challenge the legal sufficiency of such language, and therefore the binding effect of the underlying agreement, and its waiver of claims.  Indeed, as the plaintiff-employee’s challenges, in that case, to an employer’s OWBPA language was successful in at least some regards, the case serves as a useful lesson, for employees’ and employers’ counsel alike, about the importance of making sure that OWBPA language is worded correctly, so as to ensure enforceability of the underlying agreement.

I.                   Attorney Consultation

            In Foster v. Mountain Coal Co., LLC, No. 12-CV-03341-LTB-MJW, 2014 U.S. Dist. LEXIS 67637 (D. Colo. May 16, 2014), the Court held that a severance agreement did not comply with the OWBPA, because it did not state that the employee-plaintiff should consult an attorney before signing the severance agreement.  As the severance agreement merely stated that the employee “may” consult with a lawyer, rather than stating that the employee “should” or “ought” to do so, the release was held not to be enforceable, and the Court held that the plaintiff-employee could proceed with a claim under the Age Discrimination in Employment Act (“ADEA”), as well as claims under state law.

            The Court noted that the OWBPA “provides that a waiver is not valid unless the individual executing the release is ‘advised in writing to consult with an attorney prior to executing the agreement.’” Foster, 2014 U.S. Dist. LEXIS 67637 at *18 (quoting 29 U.S.C. § 626(f)(1)(E) (emphasis added in Court’s opinion; emphasis is not in statute).  In holding that the language of the separation agreement at hand did not meet that requirement, the Court noted as follows:

The language does not advise Plaintiff Fisk to consult with an attorney prior to signing the Agreement, or even that he ‘should’ or ‘ought to’ consult with an attorney before signing the Agreement. Instead it provides in passive language and in past tense that Plaintiff Fisk had the ‘opportunity for consideration and consultation with attorney,’ and that Plaintiff Fisk ‘may discuss the Agreement with his[] attorney.’

I read the statutory language as requiring the waiver to affirmatively advise the employee to consult with an attorney, or that the employee is affirmatively advised that he ‘should’ or ‘ought’ to consult with an attorney. See Am. Airlines, 133 F.3d at 118. This is so because the provisions of the OWBPA are precise, ‘strict, unqualified’ requirements for employers imposed by Congress, and courts cannot relax requirements that Congress lawfully imposes. Oubre, 522 U.S. at 427. The word ‘advise’ means ‘to give advice to,’ ‘caution,’ ‘warn,’ ‘recommend,’ or ‘inform.’ Merriam-Webster’s Collegiate Dictionary 19 (11th ed. 2004); see also Cole v. Gaming Entm't, LLC, 199 F. Supp. 2d 208, 214 (D. Del. 2002). The language in the Agreement is passive and does not ‘advise’ Plaintiff Fisk to do anything. Additionally, portions of it are in the past tense, and past directives are also insufficient. The language does not ‘give advice to,’ ‘caution,’ ‘warn,’ ‘recommend,’ or ‘inform’ Plaintiff Fisk to consult with an attorney; it only makes Plaintiff Fisk aware of a right that he has, but does not ‘advise,’ him to take advantage of, act on, or take any action regarding that right. Am. Airlines, 133 F.3d at 118. An employee, such as Plaintiff Fisk, is not required to infer the right to consult an attorney from language such as ‘may’ or ‘has had.’ See Cole, 199 F. Supp. 2d at 214. Additionally, Defendants argue that the fact that Plaintiff Fisk saw a workers' compensation attorney satisfies this requirement. However, the language mandates strict compliance, which the Agreement did not satisfy.

As the Agreement fails to advise Plaintiff Fisk to consult with an attorney prior to signing it, as explicitly required by the statute, the release is invalid and cannot be enforced against Plaintiff Fisk. Accordingly, Defendants are not entitled to summary judgment on Plaintiff Fisk’s ADEA claim.

Foster, 2014 U.S. Dist. LEXIS 67637 at *18-20. 

II.               Decisional Unit

            In Foster, since the plaintiff-employee had been fired as a part of a group termination, the Court also considered the provisions of the OWBPA (29 U.S.C. § 626(f)(1)(H)) which require that the employer provide the employee with detailed information concerning a group termination program.  Foster, 2014 U.S. Dist. LEXIS 67637 at *20-21.  The plaintiff claimed that he either did not receive, or did not recall receiving, the required information at the time of his termination and receipt of the Agreement – rather, he claimed that he received that information at a later time. Id. at 21.  The employer, in rebuttal, pointed to the testimony of plaintiff’s supervisor, who claimed that each employee was given an envelope containing both the agreement and the required disclosures. Id. at 22.  Since the plaintiff testified that he did not remember whether he received the document at the time in question, as compared to the supervisor’s testimony which was couched in certain terms, the Court held that no reasonable jury could find for the plaintiff-employee on this point, and that the Court could not conclude that there was a genuine issue of material fact on this point. Id. at 23-24.

            The Plaintiff-employee also challenged whether the notice in question adequately described the relevant decisional unit. Id. at *31.  As the Court noted, the OWBPA and its regulations provide that “flexible, manipulable, subjective criteria – even criteria couched in purportedly quantified terms, such as ‘performance’ rankings – are impermissible means of creating a decisional unit”, and “given the concerns regarding an employer’s incentive to manipulate statistics and the relevant decisional pool, the regulations understandably prohibit an employer from arguing, tautologically, that its ‘decisional unit’ is simply ‘the employees it decided were eligible.’” Id. at 30.  Here, on the other hand, the Court noted that the decisional unit which the employer used, the “Production Group”, could be objectively defined, and was not based upon a “subjective criteria based on flexible or manipulable terms,” and that “basing a decision on a group, such as the Production Group, does not pose the risks the regulations are designed to prevent.” Id. at *31-32.

III.            Eligibility Factors

Ms. Foster also challenged whether the employer’s notice had adequately described the relevant factors.  As the Court briefly discussed:

Section 626(f)(1)(H) requires employers to provide employees who are terminated as part of a termination program, such as a RIF, with information about the program. In particular, employers must supply the terminated employee with the criteria for eligibility for the program and with lists of the ages and positions of both, employees who were terminated through the program, and those who were retained. Id. § 626(f)(1)(H)(i, ii). An ‘employment termination program’ takes place when a group or class of employees are involuntarily terminated and ‘offered additional consideration for their decision to sign a waiver.’ 29 C.F.R. § 1625.22(f)(1)(iii)(A). ‘Typically, an involuntary termination program is a standardized formula or package of benefits that is available to two or more employees.’ Id. § 1625.22(f)(1)(iii)(B).

Foster, 2014 U.S. Dist. LEXIS 67637 at *32-33.  The Court concluded that the employer had satisfied both provisions, as the disclosure in question “clearly state[d] its eligibility criteria”, and it also “included the required list which provided the job titles and ages of the employees terminated with the decisional units, as well as the job titles and ages of all retained employees within the decisional units.” Id. at *33.  Similarly, the Court rejected the employee’s argument that the employer was required to provide the criteria for selection in the RIF program.  As the court noted, with citation to case law:

Instead, the OWBPA requires only the disclosure of the eligibility factors for a Severance Plan. See id. § 1625.22(f)(1)(iii)(A, B) (defining ‘program’ as the package of benefits offered, not the involuntary termination program); see also Recchia v. Kellogg Co., 951 F. Supp. 2d 676 (D. N.J. 2013); Rupert v. PPG Indus., Inc., Nos. 07-0705, 08-0616, 2009 U.S. Dist. LEXIS 16639, 2009 WL 596014, at *56-57 (W.D.Pa. Feb. 26, 2009) (following the EEOC regulations and finding that ‘program’ refers to the benefits plan); Ricciardi v. Elec. Data Sys. Corp., No. 03-5285, 2007 U.S. Dist. LEXIS 11758, 2007 WL 576323, at *4 (E.D. Pa. Feb. 20, 2007) (holding that a release needed to include only the criteria for eligibility in the severance plan, not the criteria for termination).

Foster, 2014 U.S. Dist. LEXIS 67637 at *33-34.

IV.             State Anti-Discrimination Claims: Failure to Tender Back Consideration

            In Foster, the employer argued that the plaintiff’s claims under state law had to be dismissed under Colorado’s “ tender back” doctrine, because he had retained the $8,800 severance payment which had been paid to him to release those claims, and that the plaintiff had to tender that amount back to the employer before he could challenge his waiver of those claims. Id. at 35.  While the employer cited case law from the Tenth Circuit to support its position, Bennett v. Coors Brewing Co., 189 F.3d 1221, 1228 (10th Cir. 1999), the Court in Foster found the citation to that case to be “misplaced”, as that opinion had dealt with state common law claims, and not, as here, with claims of discrimination under the Colorado Anti-Discrimination Act. Foster, 2014 U.S. Dist. LEXIS 67637 at *35-36.  The Court looked to a Supreme Court opinion, Oubre v. Energy Ops., Inc., 522 U.S. 422, 427, 118 S. Ct. 838, 139 L. Ed. 2d 849 (1998), which had rejected an employer’s argument that claims under the ADEA could be barred by the tender back doctrine.  As the Court in Foster noted:

There, as here, the employer moved for summary judgment, contending that the employee had ratified a release of all claims against the employer by failing to return the monies she had received. [Oubre, 522, U.S. at 422]. The Court held that the release signed by the plaintiff did not comply with the OWBPA’s specific requirements regarding releases covering ADEA claims. Id.; see also 29 U.S.C. §§ 626(f)(1)(B), (F), (G). The Supreme Court concluded that because it failed to comply with the OWBPA, the release should not bar the plaintiff’s ADEA claim, even if the employee retained the monies she received in exchange for the release. Id. at 842.

In so holding, the Court reasoned that enforcement of the tender back and ratification rules ‘would frustrate the statute's practical operation,’ and explained that:

In many instances a discharged employee likely will have spent the monies received and will lack the means to tender their return. These realities might tempt employers to risk noncompliance with the OWBPA’s waiver provisions, knowing it will be difficult to repay the monies and relying on ratification. We ought not to open the door to an evasion of the statute by this device.

Id.

Foster, 2014 U.S. Dist. LEXIS 67637 at *36-37.  Noting that Colorado courts had an “expressed desire and intention to look to federal cases for guidance in applying the Colorado Anti-Discrimination Act”, the Court in Foster extended the reasoning of Oubre to this case, and held that the plaintiff’s state law claims were not barred by the tender back doctrine. Id. at 37-38.  Thus, the Court also denied the employer’s motion for summary judgment as to the plaintiff’s state law claims. Id. at *39.

V.                Conclusion: Importance of Strict Compliance with OWBPA

            While most of Mr. Foster’s arguments discussed above were rejected by the Court, the fact that he won at least one of those arguments with regard to his ADEA claims was enough for those claims to survive summary judgment.  The relevant paragraph of the Court’s opinion makes this point very clearly and succinctly:

[B]ecause I concluded that Defendants failed to show that all the strict statutory requirements of the OWBPA were met, summary judgment on Plaintiff Fisk’s ADEA claims is denied. See Butcher v. Gerber Prods. Co., 8 F. Supp. 2d 307, 314 (S.D. N.Y. 1998) (‘The absence of even one of the OWBPA’s requirements invalidates a waiver.’) Furthermore, because the release is invalid, discussion of its validity under the totality of the circumstances approach is not warranted.

Foster, 2014 U.S. Dist. LEXIS 67637 at *34-35.  Further, as the above discussion demonstrates, it was that same shortcoming (failure to follow the OWBPA’s requirements strictly), which ultimately led to the plaintiff’s state law claims surviving as well, notwithstanding the fact that the employee did not pay back to the employer the underlying settlement monies, which he had been paid following his execution of the underlying settlement agreement.  Thus, to repeat the admonition at the opening of this post, the importance of strict compliance with the OWBPA’s provisions, and the consequences for failure to do so, simply cannot be overstated.

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Watch Your Mouth: Virginia Supreme Court Increasingly Receptive to Defamation Claims

            Claims of defamation for comments made by co-workers and supervisors regarding an employee’s performance on the job are increasingly common.  One significant barrier to such claims is a qualified privilege, often called the “common interest” privilege.  This privilege attaches to communications between persons on a subject in which the persons each have an interest or duty.  In Cashion v. Smith, a splintered Virginia Supreme Court voted 4-3 to expand the ability of plaintiffs to successfully bring defamation suits, and to limit the qualified privilege enjoyed by some defendants.  749 S.E.2d 526, 286 Va. 327 (2013).   In Cashion, Justice Mims wrote the majority opinion, while Justice McClanahan dissented.  Justices Powell and Goodwyn concurred in part and dissented in part.

            In Cashion, an anesthesiologist brought suit for defamation against a surgeon for comments made following the death of a patient which they had both been treating.  Id. at 331.  During the incident in question, both Dr. Cashion, the anesthesiologist, and Dr. Smith, a trauma surgeon, were providing care to a critically injured patient.  Id.  The patient died during surgery.  Id.  In the operating room following the patient’s death Dr. Smith made the following critical comments about Dr. Cashion in front of several members of the operating team:

1. “He could have made it with better resuscitation.”
2. “This was a very poor effort."
3. “You didn’t really try.”
4. “You gave up on him.”
5. “You determined from the beginning that he wasn’t going to make it and purposefully didn’t resuscitate him.”

Id. at 332.  In the hallway outside the operating room, Dr. Smith further stated that “You just euthanized my patient.”  Id
. 

            The anesthesiologist brought a defamation claim against the surgeon. Following discovery, the surgeon moved for summary judgment, arguing that his comments were protected by both the rhetorical hyperbole and the qualified privilege.  The circuit court granted summary judgment, based primarily on its determination that the statements were, as a matter of law, statements of opinion, subject to the qualified privilege, and, in some cases, mere rhetorical hyperbole.  In so holding, the circuit court found that there was no evidence of common law malice which would bring the statements outside the scope of the qualified privilege.

On appeal, the Supreme Court turned first to the question of whether the statements were statements of “opinion”.  First, the Court determined that whether a statement is “opinion” is a question of law.  A statement is one of “opinion” when it is “relative in nature and depends largely on a speaker’s viewpoint[.]”  Id. at 336, quoting Hyland v. Raytheon Tech. Servs. Co., 277 Va. 40, 47, 670 S.E.2d 746, 750 (2009).  By contrast, a statement is one of fact when it is “capable of being proven true or false.”  Fuste v. Riverside Healthcare Ass’n, 265 Va. 127, 676 S.E.2d 858, 861-62 (2003). 

Applying this standard, the Court found that 2, 3, and 4, above, were opinion because they were ‘subjective” and wholly dependent upon the speaker’s viewpoint and, accordingly, affirmed the circuit court’s determination to that effect.  However, the Court held that statements 1 and 5, above, were statements of fact.  As to the first statement, the Court explained that it implied that plaintiff had either failed to assist, or actively prevented, the patient’s resuscitation.  As to the fifth statement, the Court explained that it amounted to an accusation that plaintiff had purposefully caused the patient’s death by withholding treatment.    

Next, the Court addressed the circuit court’s determination that the “euthanasia” statement was protected by the qualified privilege.  First noting that “[w]hether a communication is privileged is a question of law”, the Court reiterated that the “qualified privilege attaches to ‘[c]ommunications between persons on a subject in which the persons have an interest or duty.’”  Id. at 337 (quoting Larimore v. Blaylock, 259 Va. 568, 528 S.E.2d 119, 121 (2000)).  Applying this standard, the Supreme Court found that the circuit court had correctly determined that the “euthanasia” statement was privileged as a matter of law. 

The Supreme Court’s inquiry did not end there, however.  The Court went on to address plaintiff’s argument that the privilege did not apply because the statements were not made in good faith.  Recognizing that, in the past, it had included the presence or absence of “good faith” as a factor in determining whether a qualified privilege exists, the Court in Cashion expressly overruled that formulation of the privilege.  Id. at 338.  Having so held, the Court found that “the question of whether a statement was made in good faith is a question of fact for the jury to decide when determining whether a qualified privilege has been lost or abused.”  Id.  Once the qualified privilege has attached, it is the plaintiff’s burden to establish, by clear and convincing evidence, that the privilege has been “lost or abused.”  Id.

The Court went on to explain that a plaintiff can show that the privilege has been “lost or abused” by establishing that the statement was made with common law malice.  Id. at 338.  The Court provided a non-exhaustive list of ways in which a plaintiff might establish common law malice:

1)     The statements were made with knowledge that they were false or with reckless disregard for their truth, Raytheon Technical Servs. Co. v. Hyland, 273 Va. 292, 301, 641 S.E.2d 84, 89-90 (2007);

2)     The “statements [we]re communicated to third parties who have no duty or interest in the subject matter,” Larimore, 259 Va. at 575, 528 S.E.2d at 122;

3)     The statements were motivated by personal spite or ill will, Preston v. Land, 220 Va. 118, 255 S.E.2d 509, 511 (1979);

4)     The statements included “strong or violent language disproportionate to the occasion,” Story v. Norfolk-Portsmouth Newspapers, Inc., 202 Va. 588, 591, 118 S.E.2d 668, 670 (1961); or

5)     The statements were not made in good faith, Chalkley v. Atlantic Coast Line R.R. Co., 150 Va. 301, 325, 143 S.E. 631, 637-38 (1928).

Cashion, 286 Va. at 339. 

Although the question of whether the a statement is privileged is one of law, the Court determined that the question of whether the privilege has been “lost or abused” is one of fact, and therefore reserved for the jury.  Id.  As such, the Court reversed the circuit court’s grant of summary judgment in favor of defendant on the issue of qualified privilege, and remanded the case for further proceedings.

Finally, the Court addressed whether the statements were mere “rhetorical hyperbole”, which are not defamatory under Virginia law.  Yeagle v. Collegiate Times, 255 Va. 293, 295-96, 497 S.E.2d 136, 137 (1998).  Statements are “rhetorical hyperbole” when “no reasonable inference could be drawn that the individual identified in the statements, as a matter of fact, engaged in the conduct described.”  After reviewing the facts of the case, the Court concluded that “[c]onsidering the context in which the statements were made, a listener could believe that [plaintiff] engaged in the conduct [defendant] attributed to him, i.e. euthanizing the patient or causing or contributing to the patient’s death by providing deficient care.”  Thus, the Court affirmed the circuit court’s determination that the statements were not rhetorical hyperbole.

The holding of the Virginia Supreme Court in Cashion is of a piece with its other recent jurisprudence in the area of defamation which, taken together, have substantially liberalized the pleading standards for defamation plaintiffs.  For example, in Tharpe v. Saunders, the plaintiff’s claim of defamation hinged on the defendant’s statement that “[plaintiff] told me that [plaintiff] was going to screw the Authority like he did at Fort Pickett.”  737 S.E.2d 890 (Va. 2013).  The circuit court found that this statement was non-defamatory opinion. 

The Virginia Supreme Court reversed, explaining that the statement was not opinion because it was capable of being proved true or false.  Interestingly, Justice McClanahan, who would go on to dissent in Cashion, wrote for the Court in Tharpe.  The Court noted that the statement could be proven to be true or false by adducing evidence that plaintiff either did, or did not, make the statement to defendant which defendant claimed plaintiff made.  In so holding, the Court expressly rejected the circuit court’s determination that, to be capable of supporting a claim for defamation, the statement attributed to plaintiff by defendant must also contain a provably false connotation.  I doing so, the Court relied on caselaw from other jurisdictions addressing fabricated quotations, and finding that quotations falsely attributed to a plaintiff are actionable as defamation regardless of the truth or falsity of the substance of the quotation, so long as the quotation injures the plaintiff’s reputation. 

Finally, in Webb v. Virginian-Pilot Media Cos., LLC, the Justice Mims, writing for the Virginia Supreme Court was faced with a situation in which the plaintiff alleged that he had been defamed “not by statements of fact that are literally true but by an implication arising from them[.]”  No. 122024 (Va. Jan. 10, 2014) (available at: http://scholar.google.com/scholar_case?case=18279223694508766601&hl=en&as_sdt=6&as_vis=1&oi=scholarr).  The Court found that the plaintiff could nonetheless make out a claim if “the alleged implication [can] be reasonably drawn from the words actually used.”  Id. Although holding that it was possible to make out such a claim, the Court found that plaintiff had not successfully done so on the facts before it.

Thus, it is now possible, in Virginia, to make out a claim of defamation if a statement of opinion is fabricated, and falsely attributed to the plaintiff, or if a true statement gives rise to defamatory meaning.  While the qualified privilege may offer some protection to defendants, its application is now, for all intents and purposes, to be decided by the jury.  

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April Employment Law Blog Carnival

Attorney Tim Eavenson is hosting this month's edition of the Employment Law Blog Carnival on his blog, "Current Employment".  We contribute almost every month, and it is always a good resource on breaking developments in employment law.

Please be sure to visit our website at http://RobertBFitzpatrick.com

Dodd-Frank Amendment to Arbitrability of SOX Whistleblower Claims Cause a Stir

The Dodd-Frank Act is a sweeping piece of legislation, with reforms touching a wide array of topics, including arbitration.  Below are briefly discussed some of the interpretive issues which courts are currently struggling with.

I.                Scope of Whistleblower Protections

The Dodd Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), 15 U.S.C. 78aaa et seq. contained, among other things, two clauses which are relevant here.  First, it created a private right of action for whistleblower retaliation.  See 15 U.S.C. § 78u-6(h)(1)(A). 

The scope of this right of action remains uncertain.  Some courts have held that only individuals who have reported information to the SEC are covered by the whistleblower anti-retaliation provisions created by the Dodd-Frank Act.  See Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) (“Based on our examination of the plain language and structure of the whistleblower-protection provision, we conclude that the whistleblower-protection provision unambiguously requires individuals to provide information relating to a violation of the securities laws to the SEC to qualify for protection from retaliation under § 78u-6(h).”(emphasis in original)); Wagner v. Bank of Am. Corp., No. 12-cv-00381, 2013 U.S. Dist. LEXIS 101297, 2013 WL 3786643 (D. Colo. July 19, 2013) (“Ms. Wagner did not provide any information to the Commission, whether relating to a violation of the securities laws or otherwise, prior to her termination. Accordingly, she was not a ‘whistleblower’ as defined in this statute.”); Bank v. Apple, Inc. No. 13-cv-2977, 2013 U.S. Dist. LEXIS 149686, 2013 WL 7394596 (N.D. Cal. Sept. 27, 2013) (“Because plaintiff did not file a complaint to the SEC, he is not a ‘whistleblower’ under the Dodd-Frank Act.”)

However, the majority of courts to consider the issue have determined that the whistleblower protections apply regardless of whether the conduct was reported to the SEC prior to termination.  See Khazin v. TD Ameritrade Holding Corp., No. 13-4149 (D.N.J. March 11, 2014) (available at: http://scholar.google.com/scholar_case?case=1464737894098735581) (collecting authority and following what it characterizes as the rule endorsed by “most district courts addressing [the] issue”); Ellington v. Giacoumakis, No. 13-11791, 2013 U.S. Dist. LEXIS 148939, 2013 WL 5631046, at *3 (D. Mass. Oct. 16, 2013) (relying on SEC's comments to the Dodd-Frank Act in holding that “Congress intended that an employee terminated for reporting Sarbanes-Oxley violations to a supervisor or an outside compliance officer, and ultimately to the SEC, have a private right of action under Dodd-Frank whether or not the employer wins the race to the SEC's door with a termination notice”); Murray v. UBS Sec., LLC, No. 12-5914, 2013 U.S. Dist. LEXIS 71945, 2013 WL 2190084, at *4 (S.D.N.Y. May 21, 2013) (giving deference to the SEC's interpretation of the rule and holding that the anti-retaliation whistleblower provisions apply to individuals who report information to the SEC or provide disclosures that fall under § 78u-6(h)(1)(A)(iii));  Genberg v. Porter, 935 F. Supp. 2d 1094, 1106-07 (D. Colo. 2013); Nollner v. S. Baptist Convention, Inc., 852 F. Supp. 2d 986, 995 (M.D. Tenn 2012); Kramer v. Trans-Lux Corp., No. 11 Civ. 1424, 2012 U.S. Dist. LEXIS 136939, 2012 WL 4444820, at *6-7 (D. Conn. Sept. 25, 2012); Egan v. Tradingscreen, Inc., No. 10 Civ. 8202, 2011 U.S. Dist. LEXIS 47713, 2011 WL 1672066, at *6-7 (S.D.N.Y., May 4, 2011) (all holding that the Dodd-Frank Act’s whistleblower protections apply regardless of whether the employee reported information to the SEC). 

The SEC’s final rule, which was relied upon by the federal district court for the Southern District of New York, as well as other courts, in construing the reach of the Dodd-Frank Act’s whistleblower protections deals with whether SEC reporting is mandatory for whistleblower protections.  The rule explains that “the anti-retaliation whistleblower protection provisions of Dodd-Frank require Plaintiff to show that he either provided information to the SEC or that his disclosures fell under the four categories listed in Section 78u-6(h)(1)(A)(iii).” Murray, 2013 U.S. Dist. LEXIS 71945, 2013 WL 2190084 at *7 (emphasis in original); 76 Fed. Reg. 34300, 34304 (June 13, 2011) (available at: https://www.sec.gov/rules/final/2011/34-64545fr.pdf).  In brief, the SEC’s interpretation of the Dodd-Frank Act’s whistleblower protections encompasses individuals who make internal reports of violations, not only individuals who make complaints to the SEC.  In Khazin, the federal district court for the District of New Jersey held that the SEC’s rule is “a permissible construction of the statute” and, therefore, deferred to the SEC’s interpretation.  Khazin, No. 13-4149 (available at: http://scholar.google.com/scholar_case?case=1464737894098735581).

II.             Dodd-Frank and Pre-Dispute Arbitration Agreements

The Dodd-Frank Act amended the Securities Exchange Act of 1934, 15 U.S.C. § §  78a-78ll to create an Anti-Retaliation Provision.  Separately, Congress also amended 15 U.S.C. § 1514A, which contains the private right of action against retaliation which had been created by the Sarbanes-Oxley Act to append a prohibition against pre-dispute arbitration agreements.  The Anti-Retaliation Provision which the Dodd-Frank Act added to the Securities Exchange Act of 1934 did not include any provision analogous to the prohibition against pre-dispute arbitration agreements.  Although the language of the two causes of action is broadly similar, the remedy created by Dodd-Frank in the Securities Exchange Act provides for a greater recovery, and does not require that a claimant first file with OSHA. 

The provision added by the Dodd-Frank Act to the Sarbanes-Oxley Act prohibiting pre-dispute arbitration agreements is codified at 15 U.S.C. § 1514A(e), and reads:

(1) Waiver of rights and remedies.— The rights and remedies provided for in this section may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement.
(2) Predispute arbitration agreements.— No predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section.

This provision makes pre-dispute arbitration agreements unenforceable to the extent that they would cover whistleblower claims brought under the provisions of the Sarbanes-Oxley Act.  The Dodd-Frank Act’s own whistleblower retaliation cause of action contains no similar provision.

Plaintiffs have argued that this provision should be read to apply to the Dodd-Frank Act’s whistleblower provisions as well due to the fact that the language of these provisions is otherwise largely parallel.  See Murray v. UBS Sec., LLC, No. 12-civ-5914, 2014 U.S. Dist. LEXIS 9696, 2014 WL 285093 at *29-*32 (S.D.N.Y. Jan. 27, 2014).  In support of this argument, plaintiffs note that the Dodd-Frank Act amended both the Sarbanes-Oxley Act and the Commodity Exchange Act to prohibit pre-dispute arbitration agreements.  However, the Securities Exchange Act was not included in this amendment.  While there is little authority on this issue, this argument appears to have been rejected by the few courts which have had occasion to consider it.  See Id.; Ruhe v. Masimo Corp., SACV 11-00734-CJC, 2011 U.S. Dist. LEXIS 104811, 2011 WL 4442790 at *4 (C.D. Cal. Sept. 16, 2011) (“Plaintiffs must arbitrate their claims brought pursuant to 15 U.S.C. § 78-u because the Dodd-Frank act does not render predispute arbitration agreements invalid or unenforceable for actions brought pursuant to this section.”)).  Similarly, the federal district court for the Southern District of New York compelled arbitration based on the “plain language” of the Securities Exchange Act – in other words, the lack of any provision voiding pre-dispute arbitration agreements.  Murray, 2014 U.S. Dist. LEXIS 9696; John Fullerton III and Jason Kaufman, The Enforceability of Predispute Arbitration Agreements With Respect to Dodd-Frank and SOX Whistleblower Retaliation Claims Continues to be a Puzzle, Lexology (March 27, 2014) (available at: http://www.financialservicesemploymentlaw.com/2014/03/27/the-enforceability-of-predispute-arbitration-agreements-with-respect-to-dodd-frank-and-sox-whistleblower-retaliation-claims-continues-to-be-a-puzzle/). 

The question of whether the Dodd-Frank Act permits pre-dispute arbitration agreements remains open.  However, the little authority extant on this question favors the enforceability of such an agreement.

III.           Retroactivity of the Dodd-Frank Amendments to the Sarbanes-Oxley Act Regarding Pre-Dispute Arbitration Agreements

Although the Sarbanes-Oxley Act was expressly amended to invalidate pre-dispute arbitration agreements to the extent that they apply to whistleblower claims brought under the Sarbanes-Oxley Act, courts are divided on the question of whether this amendment applies retroactively to void such agreements made prior to the effective date of the Dodd-Frank Act, or whether it should apply only to agreements entered into subsequent to the effective date of the Dodd-Frank Act.  See Bradley M. Nerderman, Note: Should Courts Apply Dodd-Frank’s Prohibition on the Enforcement of Pre-Dispute Arbitration Agreements Retroactively, 98 Iowa L. Rev. 2141 (July 2013) (available at: http://www.uiowa.edu/~ilr/issues/ILR_98-5_Nerderman.pdf) 

The rationale for refusing retroactive application relies on several points.  First, it is worth noting that “retroactivity is not favored by the law” absent a clear congressional intent to the contrary.  Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1998).  Assuming that there is no such clearly expressed intent, a court will evaluate whether retroactive application of the statute will “have a retroactive consequence in the disfavored sense of affecting substantive rights.”  Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37 (2006). 

In most cases the dispute hinges on whether the court in question views arbitration as a jurisdictional or procedural right, or a substantive contractual right.  Courts have split on this issue.  Compare Pezza v. Investors Capital Corp., 767 F. Supp. 2d 225, 234 (D. Mass. 2011); Wong v. CKX, Inc., 890 F. Supp. 2d 411, 422 (S.D.N.Y. 2012) (both holding that the provisions prohibiting pre-dispute arbitration agreements apply retroactively); with Henderson v. Masco Framing Corp., No. 11-0088, 2011 U.S. Dist. LEXIS 80494, 2011 WL 3022535 (D. Nev. July 22, 2011); Weller v. HSBC Mrtg. Servs. Inc., No. 13-00185, 2013 U.S. Dist. LEXIS 130544, 2013 WL 4882758 at *4 (D. Colo. Sept. 11, 2013) (both holding that the provisions prohibiting pre-dispute arbitration agreements do not apply retroactively).

The federal district court for the District of Columbia addressed this issue in Taylor v. Fannie Mae, 839 F. Supp. 2d 259, 263 (D.D.C. 2012).  In Taylor, the Court denied retroactive effect to the provisions of the Sarbanes-Oxley Act which prohibit pre-dispute arbitration agreements.  Id.  After first determining that the Sarbanes-Oxley act was silent as to whether the provisions were intended to have retroactive effect, the Taylor court interpreted the provisions as having only prospective effect because it “fail[ed] to see how a retroactive application would not impair the parties’ rights possessed when they acted.”  Id. 

This, also, remains an open issue within the District of Columbia, and it is possible that other courts will not follow the decision in Taylor.  Of course it is also possible that the reasoning in Taylor will prevail and that a court would refuse to apply the amendment retroactively to invalidate arbitration agreements entered into prior to the effective date of the Dodd-Frank Act. 

Finally, assuming that the holding in Taylor prevails, an interesting question remains as to whether that determination will erode as time goes by.  To explain, it seems arbitrary that an employee of twenty years tenure, who signed a pre-amendment employment agreement should be bound to arbitrate claims decades after the United States Congress clearly stated that such agreements are void, while an employee of nineteen years tenure would not be so bound.  

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Respect Your Elders: Lessons from Age Discrimination Cases

Age discrimination is an under-utilized tool for redressing workplace grievances, in part due to the perception by practitioners that it is difficult to prevail on claims under the Age Discrimination in Employment Act, (“ADEA”), 29 U.S.C. § 621, et seq. One sad consequence of this is that the body of law surrounding age discrimination is often overlooked when bringing claims related to other protected characteristics. This is unfortunate because, as with many other areas of life, our elders have much to teach us. This article is a discussion of some of the areas in which age discrimination case law can inform our approach to the litigation of discrimination based on other protected characteristics.

I. INCONSISTENT EVALUATIONS

“The lawyer’s truth is not Truth, but consistency or a consistent expediency.”
- Thoreau

Pointing to inconsistent explanations proffered by an employer for an adverse employment action is a time-honored way of demonstrating pretext under the McDonnell-Douglas framework. Several recent age-related cases dealt with the circumstances under which inconsistent performance evaluations would be capable of giving rise to a similar inference of discrimination.

In Barker v. Ellington Bd. of Educ., No. 3:12-cv-00313, 2013 U.S. Dist. LEXIS 171324, 2013 WL 6331159 (D. Conn. Dec. 5, 2013), the plaintiff, an elementary school teacher, was terminated when her contract was not renewed. Plaintiff alleged that the decision not to renew her contract was due to age discrimination, and brought suit under the ADEA.

In defense of its non-renewal decision, the School Board cited poor performance evaluations received by Ms. Barker during the school year preceding her termination. Barker, 2013 U.S. Dist. LEXIS at *32-34. Ms. Barker argued that these evaluations were internally inconsistent in that the narrative comments and notes prepared in support of the evaluations contradicted the criticism of her performance made elsewhere in the evaluation and that, as such, it was permissible for the jury to infer that the School Board’s stated reason for termination was pretextual. Id. For example, one of the criticisms contained in Ms. Barker’s performance evaluation was that she did not give a “clear statement of her lessons”, but in the supporting description of Ms. Barker’s teaching, the evaluator noted that she “read[] an opening statement from the book” and “referr[ed] to a cork board describing the subject of the lesson.” Id. at 34-35 (internal quotations omitted).

Although recognizing that an employer’s termination decision need not be correct – or even rational – the Court nevertheless denied summary judgment to the employer. Id. at 38. The Court, citing Reeves v. Sanderson Plumbing Prods., 530 U.S. 133 (2000), denied the employer’s motion for summary judgment, explaining that “discriminatory intent can be inferred from the falsity of an employer’s justification for its adverse action[,]” and that the internal contradictions in the plaintiff’s performance evaluation, upon which the employer had based its termination decision, were capable of giving rise to an inference of discriminatory intent. Id. at *37-*38.

Not all disagreements surrounding a performance review are sufficient to demonstrate the “falsity of an employer’s justification” sufficient to support an inference of discrimination. In Mattera v. JPMorgan Chase Corp., the federal district court for the Southern District of New York granted the employer’s motion for summary judgment based, in part, on its holding that neither “an employee’s disagreement with her employer’s evaluation of her performance” nor the “claim that he had received good performance evaluations in the past” were sufficient to create an inference of discrimination. 740 F. Supp. 2d 561, 576-77 (S.D.N.Y. 2010). In so holding, the Court explained that “[d]isagreements regarding poor performance evaluations and claims of prior good performance do not, as a matter of law or logic, mean that present poor performance reviews were unfounded.” Id. at 574. Similarly, in Godfrey v. Ethan Allen, Inc., the Second Circuit noted “[t]hat [plaintiff] had been favorably evaluated in the past is irrelevant.” No. 96-7978, 1997 U.S. App. LEXIS 12334 at *6 (2d Cir. May 23, 1997); see also Billet v. CIGNA Corp., 940 F.2d 812, 826 (3d Cir. 1991) (“Prior good evaluations alone cannot establish that later unsatisfactory evaluations are pretextual”).

To leverage inconsistent performance reviews into evidence supporting an inference of discrimination, employees should simply focus on how the inconsistencies identified meet the traditional burden of demonstrating the falsity of the proffered reason for termination. The most obvious of such circumstances is when the evaluation which led to the adverse action is, itself, internally inconsistent, as was the case in Barker. Even if the evaluation is not internally inconsistent, unfavorable evaluations might still give rise to an inference of discrimination in context with other data – for example, if the unfavorable review states criticisms distinct from those contained in a termination memo, if they are inconsistent with objective performance metrics generated around the same time as the performance review, or if the criticisms in the performance evaluation are otherwise provably false.

  II. JOB QUALIFICATIONS

“I adore adverbs; they are the only qualifications I really much respect.”
- Henry James

To establish a prima facie case of age discrimination, a plaintiff must show, among other things, that she was qualified for the job in question. See Blizzard v. Marian Technical Coll., 698 F.3d 275, 283 (6th Cir. 2012). At this stage, however, the plaintiff can carry this burden by demonstrating that her qualifications are “at least equivalent to the minimum objective criteria for employment in the relevant field.” Wexler v. White’s Fine Furniture, Inc., 317 F.3d 564, 575-76 (6th Cir. 2003). Although these qualifications can vary, they generally include such criteria as education, experience, and demonstrated possession of the pertinent skills. Id. at 576. Significantly, the question of whether an employee possesses a “subjective” quality – such as leadership or management skill – is left to a later stage of the McDonnel Douglas analysis. See Celluci v. RBF Citizens, N.A., Civ. No. 12-6038, 2013 U.S. Dist. LEXIS 177282 (E.D. Pa. Dec. 18, 2013) quoting Weldon v. Kraft, Inc., 896 F.2d 793, 798 (3d Cir. 1990).

In Isolato v. Kelly Servs., the federal district court for the Eastern District of Michigan addressed whether a plaintiff’s claim for Social Security Disability Insurance (“SSDI”) benefits prevented him from demonstrating he was qualified for a particular job. 945 F. Supp. 2d 825, 830, 834-35 (E.D. Mich. 2013). Prior to initiating litigation, plaintiff had filed for SSDI benefits as an individual who was “totally disabled”, and indicated in that filing that he was “disabled and unable to perform any substantial gainful activity[.]” Id. at 835.

In approaching this question, the Court in Isolato first noted that, under the Supreme Court’s analysis in Cleveland v. Policy Mgmt. Sys. Corp., 326 U.S. 795 (1999), the receipt of SSDI benefits did not automatically estop the recipient from pursuing an ADA claim, but that such receipt did create a “strong presumption” against the success of such a claim that the recipient must rebut. Isolato, 945 F. Supp. 2d at 830. The Court found that this analysis applied equally to claims under the ADEA. Id. at 831; see also McClaren v. Morrison Mgmt. Specialists, Inc., 420 F.3d 457, 463-64 (5th Cir. 2005) (applying Cleveland to ADEA claims); Detz v. Greiner Indus., Inc., 346 F.3d 109 (3d Cir. 2003) (same).

Finding that Plaintiff had not presented an explanation for the statements made in his application for SSDI benefits and the instant lawsuit, the Court granted defendant’s motion for summary judgment. Id. at 835. In so holding, the Court distinguished the holding of the Sixth Circuit in Kiely v. Heartland Rehabilitation Servs., 359 F.3d 386 (6th Cir. 2004) in which the Sixth Circuit had found that plaintiff’s assertion that he was “legally blind” was not necessarily inconsistent with his assertion that he was qualified to perform his job. In Kiely, the Court noted that a reasonable juror could find that plaintiff’s claim for SSDI was based upon his blindness, not an inability to work. Id. at 390.

To preserve claims for employment discrimination, whether under the ADEA, ADA, or otherwise, counsel should make note of the distinction, identified by the court in Isolato, between an assertion that an employee’s disability entitles them to benefits and an assertion that an employee’s inability to work entitles them to benefits. To the extent possible, an applicant for SSDI benefits should focus the claim on proving that the applicant meets the criteria listed for one or more particular disability(ies), rather than on an inability to find work. See Overton v. Reilly, 977 F.2d 1190, 1196 (7th Cir. 1992) (holding that an award of SSDI benefits based on a particular disability was not inconsistent with a claim of discrimination). Even to the extent that an SSDI benefits applicant cannot so phrase such claims, the applicant should be careful about the statements made in the application regarding the applicant’s ability to perform work.

III. MITIGATION OF DAMAGES

“That terrible mood of depression of whether it’s any good or not is what is known as the Artist’s Reward.”
- Ernest Hemingway

An employee claiming damages for lost wages is required to make efforts to mitigate his or her damages by obtaining comparable employment. Waver v. Casa Gallardo, Inc., 922 F.2d 1515, 1527-28 (11th Cir. 1991). These efforts must be “reasonable under the circumstances”. Ford Motor Co. v. EEOC, 458 U.S. 219, 231 n.15 (1982).

In Harris v. CVS Caremark Corp., No. 1:11-cv-732, 2013 U.S. Dist. LEXIS 11591, 2013 WL 365259 (N.D. Ala. Jan. 29, 2013), the federal district court for the Northern District of Alabama was faced with the question as to whether, and to what extent, mental impairments suffered by the plaintiff impact the nature of efforts which are reasonable “under the circumstances”. In Harris, the plaintiff had, in fact, accepted a job, but failed to actually start in that position due to his depression over his termination. Id. at *10. It is not clear from the decision whether or not plaintiff had received a clinical diagnosis of depression. In any event, the Court held that this testimony, as well as other testimony from plaintiff regarding the negative impact that defendant’s termination of his employment had on his mental state, created a triable issue of fact as to whether plaintiff had taken reasonable steps under the circumstances to mitigate his damages. Id. at *35.

IV. INTERSECTIONAL DISCRIMINATION

“Fools ignore complexity. Pragmatists suffer it. Geniuses remove it.”
- Alan Perlis

The Supreme Court first recognized that Title VII extended to discrimination against identifiable sub-groups of protected classes in Phillips v. Martin Marietta Corp., 400 U.S. 542 (1971). In Phillips, the court held that Title VII prohibited discrimination against a sub-group of women who had pre-school-age children. Id. at 544. The holding in Phillips has since been expanded to include other sub-groups. E.g. Jefferies v. Harris Cty. Community Action Ass’n, 615 F.2d 1025 (5th Cir. 1980) (combination of race and sex discrimination); Sprogis v. United Airlines, 444 F.2d 1194, 1194-98 (7th Cir. 1971) (marital status); see also Minna J. Kotkin, Diversity & Discrimination: A Look at Complex Bias, 50 Wm. & Mary L. R. 1439 (April 2009); Bradley Allen Areheart, Intersectionality and Identity: Revisiting a Wrinkle in Title VII, 7 Geo. Mason U. Civ. Rts. L.J. 199, 201-202 (2006); Darren Lenard Hutchinson, Identity Crisis and the Development of an Adequate Theory of Subordination, 6 Mich. J. Race & L. 285, 308-309 (2001); Rosalio Castro & Lucia Corral, Comment: Women of Color and Employment Discrimination: Race and Gender Combined in Title VII Claims, 6 La Raza L.J. 159, 162 (1993); Virginia W. Wei, Note, Asian Women and Employment Discrimination: Using Intersectionality Theory to Address Title VII Claims Based on Combined Factors of Race, Gender & National Origin, 37 B.C.L.R. 771, 776 (1996); Elizabeth V. Spelman, Inessential Women: Problems of Exclusion in Feminist Thought, 114-32 (1988); Elaine W. Shoben, Compound Discrimination: The Interaction of Race and Sex in Employment Discrimination, 55 N.Y.U. L. R. 793, 793-98 (1980); Joanne Song, Between the Cracks: Discrimination Laws and Older Women, Univ. Cal. At Irvine Dept. of Economics (April 2011) (available at: http://paa2013.princeton.edu/papers/130235) (accessed March 13, 2014).

While such intersectional claims are broadly recognized, some courts have resisted attempts by plaintiff to “combine the protected categories[.]” See Ganaway v. Pittsburgh Dept. of Public Safety, No. 2:05-cv-1657, 2008 U.S. Dist. LEXIS 8077 (W.D. Pa. Feb. 4, 2008); Taylor v. Procter & Gamble Dover Wipes, 184 F. Supp. 2d 402, 407 (D. Del. 2002); Floyd v. New Jersey, Civ. No. 89-5293, 1991 U.S. Dist. LEXIS 10102 ((D.N.J. July 16, 1991) (all holding that Title VII protects sex or race, each of which must be analyzed separately); but see Shazor v. Prof’l Transit Mgmt., Ltd., No. 13-3253, 2014 U.S. App. LEXIS 2943, 2014 WL 627406 (6th Cir. Feb. 19, 2014) (allowing an intersectional sex-plus-race claim to proceed, holding that “Title VII does not permit plaintiffs to fall between two stools when their claim rests on multiple protected grounds”); Chadwick v. Wellpoint, Inc., 561 F.3d 38, 43 (1st Cir. 2009) (noting that “sex plus” claims are permitted when not all members of a disfavored class are discriminated against).

In Doucette v. Morrison Cnty., No. 12-cv-00373, 2013 U.S. Dist. LEXIS 75177, 2013 WL 2359660 (D. Minn. May 29, 2013), the Court addressed a case of intersectional, “sex-plus” age discrimination under the Minnesota Human Rights Act, Minn. Stat. § 363A.01, et seq. Although the Minnesota Supreme Court has not held that age is a criteria which an employer could use to discriminate against some members of one sex but not the others, the Court noted that “district courts within this circuit have recognized sex-plus-age claims[.]” Id. at *35-*36; see also Hall v. Mo. Highway & Transp. Comm’n, 995 F. Supp. 1001, 1005 (E.D. Mo. 1998). In Doucette, the Court found that, even if a sex-plus-age claim had been properly pled, that it would fail to survive the employer’s motion for summary judgment. Doucette, 2013 U.S. Dist. LEXIS 75177 at *36. The evidence adduced by plaintiff included a claim that younger women were treated more favorably than plaintiff and that older men were likewise treated more favorably than plaintiff due to the “old boys club.” Id. at *36-*37. This evidence, however, did not demonstrate that the adverse disciplinary actions taken against plaintiff were on account of her age and sex, or that the stated reasons for her termination were a pretext for discrimination.

On the federal level, it is not yet clear whether the ADEA, as opposed to Title VII, can support a claim for “intersectional” discrimination. The Second Circuit, in Gorzynski v. JetBlue Airways Corp., the Court seemed to accept such a claim, explaining that “there is no need for us to create an age-plus-sex claim independent from [plaintiff’s] viable ADEA claim. Even if some subset off employees protected by the ADEA were not subject to age-based discrimination were not subject to age-based discrimination, [plaintiff] may still have encountered such discrimination.” 596 F.3d 93 (2d Cir. 2010). In Wittenburg v. Am. Express Fin. Advisors, Inc., No. 04-922, 2005 U.S. Dist. LEXiS 29471 (D. Minn. Sept. 19, 2005) the court denied summary judgment on plaintiff’s combined sex-plus-age discrimination. On appeal, the Eighth Circuit divided the claims and considered them individually, finding each sufficient standing alone, and did not comment on the district court’s alternate analysis. Wittenburg v. Am. Express Fin. Advisors, Inc., 464 F.3d 831 (8th Cir. 2006).

Two cases from the Eastern District of Pennsylvania further illustrate the approach courts have taken to this issue. In Arnett v. Aspin, the federal district court for the Eastern District of Pennsylvania noted that such “sex-plus” under Title VII do not “allege that an employer discriminated against a protected class as a whole, but rather that the employer disparately treated a subclass within the protected class.” 846 F. Supp. 1234, 1238 (E.D. Pa. 1994). In Arnett, the defendant argued that plaintiff’s claims of age discrimination under the ADEA and sex discrimination under Title VII should be construed as two separate claims. Id. at 1237. While noting that age discrimination claims could be brought only under Title VII, the Court nonetheless allowed a “sex-plus-age” claim to proceed under Title VII. Id. at 1240-41.

The next year, the Eastern District of Pennsylvania addressed the question of whether an “age-plus” claim was cognizable under the ADEA, rather than Title VII. See Kelly v. Drexel Univ., 907 F. Supp. 864 (E.D. Pa. 1995). Recognizing that Arnett had not specifically addressed this issue, the Court held that there was “no authority to recognize an “age-plus-disability” discrimination claim under the ADEA. Id. at 875 n.8. As such, plaintiff was not entitled to protection as a subclass of older, disabled, workers. Id. For further discussion of the decision in Kelly, see Kotkin, 50 Wm. & Mary L. Rev. at 1480.

Other courts have reviewed the evidentiary requirements for such intersectional or “complex” discrimination claims in more detail. For example, in Jefferies v. Thompson, the federal district court for the District of Maryland addressed a situation in which the plaintiff, an African American woman, claimed discrimination based on her age, sex, race, and her “race and gender combined”. 264 F. Supp. 2d 314, 319 (D. Md. 2003). While finding sufficient direct evidence to deny summary judgment as to the plaintiff’s race claim, the court was more skeptical regarding her “complex” claim of race and gender discrimination. In analyzing this claim, the court noted that “the more specific the composite class in which the Plaintiff claims membership, the more onerous [the plaintiff’s burden of persuasion] becomes.” Id. at 327. This is, at least in part, due to the difficulty in collecting sufficient evidence to permit a meaningful comparison between the plaintiff’s sub-group and employee’s in general. Id. at 328.

Employment attorneys should be aware of the remedies for intersectional discrimination. In particular, the Fifth Circuit in Jefferies and the Sixth Circuit in Shazor both took strong stands against allowing plaintiffs to “fall through the cracks” merely because biases against their race, sex, or other protected characteristic was, in essence, triggered by another characteristic, whether protected or unprotected. Plaintiffs may want to adopt the phrasing of the Second Circuit in Gorzynski, when it held that plaintiffs are protected from discrimination, whether under Title VII, the ADEA, or otherwise, based on their protected characteristics regardless of whether other individuals who shared those protected characteristics experienced discrimination.

V. INQUIRIES ABOUT CHARACTERISTICS RELATED TO PROTECTED CLASSIFICATIONS

“Retirement may be looked upon either as a prolonged holiday or as a rejection, a being thrown on to the scrap-heap.”
- Simone de Beauvoir

While perhaps less broadly applicable than the other subjects dealt with herein, one additional issue faced by older workers involves retirement-related inquiries by their employers. Several courts have addressed the question of whether such inquiries are capable of giving rise to an inference of discrimination. The reasoning behind the refusal of courts to use such inquiries to infer discriminatory intent on the part of employers is instructive in other matters involving employer inquiries regarding unprotected activities or characteristics correlated with protected characteristics.

In DeBarr v. Cleveland Clinic Found., the federal district court for the Northern District of Ohio granted the employer’s motion for summary judgment on the employee’s claim of age discrimination. 917 F. Supp. 2d 676, 683 (N.D. Ohio 2013). In that case, the plaintiff had relied, in part, on several inquiries from his employer over a period of years regarding if and when plaintiff was planning to retire. Id. In each instance the plaintiff-employee indicated he had no plans to retire. Id. The Court found that these exchanges did not provide direct evidence of age discrimination “because they do not require the conclusion that plaintiff was terminated because of his age, and require inferences by a fact finder.” Id.

In Colosi v. Electri-Flex Co., the plaintiff asked the court to infer discriminatory intent from, among other evidence, two occasions on which plaintiff’s supervisor asked him when he was intending to retire. 965 F.2d 500, 502 (7th Cir. 1992). Noting first that “[t]here is no direct evidence of age discrimination” the Seventh Circuit held that the retirement-related exchanges did not create an inference of discrimination because “a company has a legitimate interest in learning its employees’ plans for the future, and it would be absurd to deter such inquiries by treating them as evidence of unlawful conduct.” Id. Similarly, in Doucette, the federal district court for the District of Minnesota found that a retirement inquiry did not provide evidence of discriminatory intent, reasoning that “[t]he question itself was neutral, and [plaintiff] makes no effort, beyond repeating it, to indicate how it demonstrates discriminatory intent.” 2013 U.S. Dist. LEXIS 75177 at *38-*39.

In sum, employees will face an uphill battle in using evidence of inquiries related to legitimate employer interests as either direct or indirect evidence of discrimination, even if those inquiries are tangentially related to protected characteristics. Of course, some laws, such as the Genetic Information Non-Discrimination Act, 122 Stat. 881 (May 21, 2008) (“GINA”) prohibit a broad swathe of what might otherwise be potentially legitimate inquiries, so it is important that employment lawyers think beyond traditional Title VII remedies when representing clients in such circumstances.

 Please be sure to visit our website at http://RobertBFitzpatrick.com

Charting the Un-Discovered Country: Discovery About Discovery

Charting the Un-Discovered Country: Discovery About Discovery

Technology Assisted Review (“TAR”), also known as predictive coding, is increasingly popular as a means of controlling discovery costs, especially with large organizational defendants faced with the mounting costs of reliably searching and producing hundreds of gigabytes – or even terabytes – of potentially discoverable information.  TAR proponents tout studies showing its ability to simultaneously lower costs and increase search recall and precision (both these terms of art are discussed below).  See Maura R. Grossman & Gordon V. Cormack, Technology-Assisted Review in E-Discovery Can Be More Effective and More Efficient Than Exhaustive Manual Review, Rich. J.L.& Tech., Spring 2011, at 8-9, (available at http://jolt.richmond.edu/v17i3/article11.pdf).  Indeed, advancements in TAR technology have been made which, when properly employed, can allow predictive coding algorithms to deal effectively with situations which have complicated the use of TAR in the past, such as low-richness data sets (data sets with a low percentage of responsive documents), unrepresentative initial seed sets, and other potential complications.

The numbers, however, tell only a part of the story.  TAR is not a one-size-fits all solution, and each search process must be individually tailored to the data set under review.  This tailoring (or “training”) can be conducted in a number of different ways, but generally involves creating one or more “seed set(s)” of documents, having a human reviewer review and code the “seed” or “training” documents, and then feeding those coding decisions back to the algorithm so it can learn the distinction between relevant and non-relevant documents.  Most training processes are iterative and some TAR tools involve the correction of errors made by the algorithm.  The training process is repeated until the algorithm’s recall (the percentage of responsive documents retrieved) and precision (the percentage of retrieved documents which are responsive) are within acceptable limits.  The “seed sets” themselves can be generated in several ways, including hand-picking documents using keyword or otherwise, reviewing a random sample of documents, and/or through the use of “intelligent learning” algorithms (“active learning”) to select documents that would assist the algorithm in learning, independent of direct human intervention.  These techniques are not mutually exclusive and different predictive coding algorithms may make use of them either singly or in combination, depending on the needs of the production and the characteristics of the data set.  As noted above, not all TAR tools and protocols are created equal so some diligence is needed in selecting a tool and implementing a reasonable and defensible process. 

With TAR’s increasing popularity, the training process is being subjected to increasing scrutiny, with a growing number of attorneys seeking “discovery about discovery” to ascertain the methods used to train the TAR process – and to identify any errors, omissions, or flaws in that process.  In particular, the creation and composition of the iterative “seed sets” used to train the algorithm are often the subject of great interest to plaintiffs, who may wish to review, and potentially provide input into, the generation of the seed set and/or the conduct of the training process. 

The courts are still struggling to determine how to approach the thorny issues present at the intersection of broad discovery, the work product doctrine, the attorney-client privilege, and the cooperation protocols enunciated by the Sedona Conference.  Some have expressed hesitation regarding discovery about discovery, while others argue in favor of broad discoverability.  Notably, Judge Paul Grimm, writing in a law review, stated simply that, at least in the context of record preservation, “[i]t is axiomatic that an opponent may routinely obtain discovery of a client’s actions taken to implement the duty to preserve information[,]” explaining that “[i]t is of no moment that the…search was conducted at the direction of counsel.  Parties are permitted to inquire into an opponent’s efforts to preserve relevant information[.]”  Hon. Paul W. Grimm, et al. “Discovery About Discovery: Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?”, 37 Balt. L.R. 413 (2008) (available at:http://www.aporter.com/resources/documents/9_Grimm_et_al_Discovery_About_Discovery%5B1%5D%5B1%5D.pdf).  While TAR is currently used principally in support of document review and production efforts, it is hard to see why the processes used by a party to identify responsive documents should be provided greater protection than the processes used to identify the location of potentially responsive documents. 

A number of courts have relied on Rule 26(f) and the Sedona Conference’s Cooperation Protocol to permit discovery about discovery.  For example, courts have compelled disclosure of the data repositories (e.g. custodians and sources) searched, as well as the search terms used to conduct that search.  See Am. Home Assurance Co. v. Greater Omaha Packing Co., Inc., No. 8:11-cv-270, 2013 U.S. Dist. LEXIS 129638, 2013 WL 4875997 (D. Neb. Sept. 11, 2013); Apple Inc. v. Samsung Electronics Co. Ltd., No. 12-cv-0630, 2013 U.S. Dist. LEXIS 67085 (N.D. Cal. May 9, 2013); Uelian de Abadia-Peixoto v. U.S. Dept. of Homeland Sec., Civ. No. 11-04001 (N.D. Cal. Aug. 23, 2013) (all compelling production of search terms); see alsoRalph Losey, More Courts Are Requiring Disclosure of Keywords, E-Discovery Law Today (May 28, 2013) (available at:http://www.ediscoverylawtoday.com/2013/05/more-courts-are-requiring-disclosure-of-keywords/).  Other courts have permitted wider-ranging discovery on discovery in appropriate circumstances.  For example, in Ruiz-Bueno, III v. Scott, the federal district court for the Southern District of Ohio found that, by refusing to provide discovery on discovery, defendants had “fail[ed] to acknowledge the nuanced nature of discovery.”  No. 2:12-cv-0809, 2013 U.S. Dist. LEXIS 162953, 2013 WL 6055402 (S.D. Ohio Nov. 15, 2013).  While noting that, ideally, the need for discovery on discovery should be obviated by the Rule 26(f) planning process, the Court nevertheless held that “[s]imply put, when plaintiffs expressed some skepticism about the sufficiency of defendants’ efforts to produce…defendants’ counsel should have been forthcoming with information…[t]hat did not happen.  The Court has the power…to make that happen now.” 

            The debate about discovery of the discovery process, as it relates to TAR, primarily revolves around the “seed set”.  While this terminology implies a single “set” of documents, TAR programs are trained in many different ways, and often make use of an iterative process with multiple “sets” of documents coupled with human review and correction.  As such, discovery about the seed set should be viewed as discovery of the documents and processes used to “train” the algorithm to recognize responsive and non-responsive documents. 

            However, rather than address a deficiency after the fact as in Ruiz-Bueno, potentially after the expenditure of substantial time and expense by both parties, plaintiffs may be better off trying obtain transparency and cooperation in advance – either through agreement with defendants or by use of a motion to compel cooperation.  In Moore v. Publicis Groupe, Magistrate Judge Andrew Peck avoided the need for “discovery about discovery” by encouraging that the that the seed set be disclosed to plaintiff’s as part of the discovery protocol.  287 F.R.D. 182 (S.D.N.Y. 2012); see also William A. Gross Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134 (S.D.N.Y. 2009) (Peck, M.J.) (holding that the parties must cooperate in selecting appropriate key-words to facilitate computerized search for relevant e-mails).  Indeed, under the protocol outlined in Moore, the parties agreed to participate cooperatively in an iterative process which included conferring several times regarding the composition of the seed set, and on the training process in general.  Id.  In that case defendant committed to provide to plaintiff all non-privileged documents used as part of the seed set, regardless of final relevancy.  Id. at 185, 192 (while not entering a ruling on the subject, the Court noted that “[i]f you do predictive coding, you are going to have to give your seed set, including the seed documents marked as nonresponsive to the plaintiffs counsel[.]”). 

Other courts also appear to have contemplated the establishment of the same sort of collaborative effort envisioned by the Sedona Conference and established in Moore.  See, e.g. Gordon v. Kaleida Health, No. 08-cv-378S, 2013 U.S. Dist. LEXIS 73330 (W.D.N.Y. May 21, 2013) (Foschio, M.J.);  Hinterberger v. Catholic Health Sys., No. 08-cv-380S, 2013 U.S. Dist. LEXIS 73141 (W.D.N.Y. May 21, 2013) (Foschio, M.J.); see alsoSedona Conference, The Sedona Conference Cooperation Proclamation, 10 Sedona Conf. J. 331 (2009) (available at: https://thesedonaconference.org/cooperation-proclamation).  But see H. Christopher Boehning & Daniel J. Toal, ‘Seed Set’ Documents Should Not Be Discoverable, New York Law Journal (Feb. 4, 2014) (available at: http://www.newyorklawjournal.com/id=1202641220784);  In Gordon and Hinterberger, the plaintiff moved to compel Defendants to “engage in meaningful meet and confer discussions regarding an ESI protocol” and, if an agreement could not be reached, to compel the submission by each party of a proposed protocol for adoption by the Court.  Id.  The Court in Gordon denied plaintiff’s motion in each case without prejudice, explaining that “Defendants state they are prepared to meet and confer with Plaintiffs… regarding Defendants’ ESI production using predictive coding… [a]ccordingly, it is not necessary for the court to further address the merits of Plaintiffs’ motion at this time.”  Gordon, 2013 U.S. Dist. LEXIS at *11; see also Hinterberger, 2013 U.S. Dist. LEXIS at *10 (same).   While the Court in Gordon and Hinterberger did not find any need to enter an order, given defendants’ expressed willingness to cooperate, where defendants prove unwilling to cooperate – or where there is reason to doubt the sufficiency of their production – a court may prove more amenable to compelling either cooperation or permitting discovery on discovery, as did the court in Ruiz-Bueno, above.  2013 U.S. Dist. LEXIS 162953, 2013 WL 6055402.

At least one court, however, has taken a more restrictive view about the discoverability of the seed set.  This position is well summarized by the federal district court for the Northern District of Indiana in In Re: Biomet M2A Magnum Hip Implant Prods. Liability Litig., No. 3:12-MD-2391, 2013 U.S. Dist. LEXIS 172570 (N.D. Ind. Aug. 21, 2013).  In that case, plaintiff requested that defendant produce “the discoverable documents used in the training of the ‘predictive coding’ algorithm.”  Defendants disclosed only that the discoverable documents used in the training had already been provided, without specifically identifying those documents.  Id. at *2.  After first noting that it was “self evident” that plaintiff did not have a right to discover the entirety of the “seed set” used to train the algorithm, the Court addressed whether defendant was required to disclose which of the admittedly responsive documents were used in training the algorithm.  Id. at *3.  The Court held that Rule 26(b)(1) does not permit discovery into the use to which defendant put discoverable documents prior to their production.  Id. at *4.  Nevertheless, the Court called defendant’s refusal to cooperate “troubling” and indicated that, although it could not compel production of the seed set, that “[defendant]’s cooperation falls below what the Sedona Conference endorses[,]”, going on to state that “[a]n unexplained lack of cooperation in discovery can lead a court to question why the uncooperative party is hiding something, and such questions can affect the exercise of discretion.”  Id. at *5. 

            Given the concerns identified by Biomet, plaintiff’s counsel should work assiduously with defense counsel to arrive at an agreeable protocol whereby, to the extent practicable, they are able to review and participate in the creation of the “seed set” and the training of the TAR algorithm used.  This cooperation is desirable not only for its potential to resolve this issue with a minimum of time and expense, but also to ensure that the real goal – maximal production of responsive information in an efficient, and timely, fashion – can be achieved with a minimum of collateral litigation.  It is worth noting that even the Court in Biomet found defendant’s lack of transparency “troubling”.  As such, it may be that courts would be more open to mandating such cooperation than to mandating after-the-fact discovery on discovery.  That said, if such a compromise cannot be reached, plaintiff should consider moving to compel cooperation and/or to compel entry of a cooperative discovery protocol. 

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