[This Article was originally published by the Pennsylvania Bar Institute in its “Pennsylvania Employment Law Deskbook, 3rd Edition (July, 2016)]
John W. Murtagh, Jr., Esquire
Adam K. Hobaugh, Esquire
In the simplest terms, discrimination in employment can be demonstrated by proof of a defendant’s actions amounting to either (1) deliberate, intentional mistreatment of a plaintiff, whether as an applicant, current employee, or terminated worker, or (2) unintentional, but nonetheless biased action, based upon a facially neutral practice or policy that has an impact on a protected class to disproportionate effect and without reasonable business justification.
The most cogent, direct, and easily understandable formulation of the two distinct methods of proving employment discrimination is contained in Justice Kennedy’s opinion in Ricci v. DeStefano, 557 U.S. 557 (2009). In that case, Justice Kennedy wrote:
Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., as amended, prohibits employment discrimination on the basis of race, color, religion, sex, or national origin. Title VII prohibits both intentional discrimination (known as “disparate treatment”) as well as, in some cases, practices that are not intended to discriminate but in fact have a disproportionately adverse effect on minorities (known as “disparate impact”).
As enacted in 1964, Title VII’s principal nondiscrimination provision held employers liable only for disparate treatment. That section retains its original wording today. It makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” 2000e-2(a)(1); see also 78 Stat. 255. Disparate-treatment cases present “the most easily understood type of discrimination,” Teamsters v. United States, 431 U.S. 324, 335, n 15, 97 S. Ct. 1843, 52 L. Ed. 2d 396 (1977), and occur where an employer has “treated [a] particular person less favorably than others because of” a protected trait. Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 985–986, 108 S. Ct. 2777, 101 L. Ed. 2d 827 (1988). A disparate-treatment plaintiff must establish “that the defendant had a discriminatory intent or motive” for taking a job-related action. Id., at 986, 108 S. Ct. 2777, 101 L. Ed. 2d 827.
The Civil Rights Act of 1964 did not include an express prohibition on policies or practices that produce a disparate impact. But in Griggs v. Duke Power Co., 401 U.S. 424, 91 S. Ct. 849, 28 L. Ed. 2d 158 (1971), the Court interpreted the Act to prohibit, in some cases, employers’ facially neutral practices that, in fact, are “discriminatory in operation.” Id., at 431, 91 S. Ct. 849, 28 L. Ed. 2d 158. The Griggs Court stated that the “touchstone” for disparate-impact liability is the lack of “business necessity”: “If an employment practice which operates to exclude [minorities] cannot be shown to be related to job performance, the practice is prohibited.” Ibid.; see also id., at 432, 91 S. Ct. 849, 28 L. Ed. 2d 158 (employer’s burden to demonstrate that practice has “a manifest relationship to the employment in question”); Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S. Ct. 2362, 45 L. Ed. 2d 280 (1975). Under those precedents, if an employer met its burden by showing that its practice was job-related, the plaintiff was required to show a legitimate alternative that would have resulted in less discrimination. Ibid. (allowing complaining party to show “that other tests or selection devices, without a similarly undesirable racial effect, would also serve the employer’s legitimate interest”).
Twenty years after Griggs, the Civil Rights Act of 1991, 105 Stat. 1071, was enacted. The Act included a provision codifying the prohibition on disparate-impact discrimination. That provision is now in force along with the disparate-treatment section already noted. Under the disparate-impact statute, a plaintiff establishes a prima facie violation by showing that an employer uses “a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin.” 42 U.S.C. 2000e-2(k)(1)(A)(i). An employer may defend against liability by demonstrating that the practice is “job related for the position in question and consistent with business necessity.” Ibid. Even if the employer meets that burden, however, a plaintiff may still succeed by showing that the employer refuses to adopt an available alternative employment practice that has less disparate impact and serves the employer’s legitimate needs. 2000e-2(k)(1)(A)(ii) and (C).
Id. at 577–78.
Although the Ricci court was discussing Title VII protections, i.e., race, color, religion, sex, and national origin, the two methods of proof may also be used in the other main areas of employment discrimination litigation, that is, age cases brought under the Age Discrimination in Employment Act (ADEA), Smith v. City of Jackson, 544 U.S. 228 (2005) (resolving a conflict in the circuits), and disability actions under the Americans with Disabilities Act (ADA), Raytheon Co. v. Hernandez, 540 U.S. 44, 50, n.3 (2003). However, the disparate impact model has been explicitly excluded as a method of proof in cases arising under the reconstruction statutes. Washington v. Davis, 426 U.S. 229 (1976).
The particular requirements of each proof modality are considered in the following sections.
[Note: In all instances it is presumed that timely administrative filing prerequisites have been met, i.e., within 180/300 days of an intentional act of discrimination, or 180/300 days of the implementation of a policy or practice having a disparate impact. “Continuing violations” are discussed in section 2-4 of this chapter. Counsel must also be cognizant of the heightened pleading requirements discussed in Ashcroft v. Iqbal, 556 U.S. 662 (2009), as examined in Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009). Likewise, it is presumed that threshold jurisdictional issues such as the number of employees required for statutory coverage, and the status of putative plaintiffs as indeed being employees, are not present. A recent Third Circuit case, Mariotti v. Mariotti Building Products, Inc., 714 F.3d 761 (3d Cir. 2013), illustrates the importance of such preliminary determinations. In Mariotti, the Third Circuit affirmed a motion to dismiss Title VII claims of a shareholder/director, finding that such a plaintiff was not an employee under the statute, in light of the Supreme Court’s decision in Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003).]
1-2 DISPARATE TREATMENT
This method of proving discrimination is the most easily understood and readily applicable in both individual and class cases. Distilled to its essence, it focuses on workplace actions taken, or employment statuses denied, “because of” a protected characteristic—race, color, religion, sex, national origin, age, perceived or actual disability—with evidence showing that motivation.
It is, however, not without its knotty nuances and complicating concepts.
The evidence adduced can be either direct or circumstantial; explicitly carried out by or at the direction of the employer, or implicitly authorized by it and administered through the acts of responsible subordinates; particular to a single individual target or group of harassed employees; or the product of a corporate “culture,” “ambience,” or “milieu” that creates a general hostile environment. The proof offered may show a single discriminatory motivating factor, or it may document an illegal animus traceable to two or more protected characteristics, or a mix of legal and illegal elements. It may, but may not necessarily, see Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993), arise in the context of a failure to hire, a demotion, denied promotion, salary dispute, reduction in force, termination with or without cause, quid pro quo or hostile environment harassment, or other actual or perceived slight in status or benefits. In all such instances, it may be a claim arising in the first instance or the result of retaliation for complaining initially. It may result in tangible damages such as reduced or lost wages and benefits, together with emotional distress, or emotional distress standing alone.
All of these “subcategories” in the disparate treatment panorama merit individual attention.
1-2.1 Categories of Proof
As discrimination litigation has developed over the last half-century since the passage of Title VII of the Civil Rights Act of 1964, any and every disparate treatment case brought under that law and its sister acts—the ADEA, the ADA, and the ADAAA —share one thing in common: an allegation that someone, or some group, suffered demonstrable harm “because of” a statutorily protected characteristic or because of retaliation for advancing a claim of such harm or assisting in the prosecution or defense of such a claim.
1-2.1.1 Direct Evidence
The conceptually “cleanest” case is one in which the issue is joined by testimonial or documentary proof evincing the allegation, for example, when an employer answers the “Why me?” question with “Frankly, it’s because of your [insert protected characteristic here].” Such a statement, or a document, from the “boss,” a corporate hierarch, or a supervisor, will join the issue directly. See, e.g., Brown v. J. Kaz, Inc., 581 F.3d 175, 183 (3d Cir. 2009).
A similar conclusion will be called for by a corporate policy that, while not perhaps completely explicit in its animus, will nonetheless allow for a credible argument to be made that its intent is discriminatory. Such an example of damning evidence in the eyes of a jury was the infamous “blockers” memo in White v. Westinghouse Electric Co., 862 F.2d 56 (3d Cir. 1988). Corporate policies described in such missives have long been used by plaintiffs to survive summary judgment, and convince juries that the corporate “mind-set” was one of anti-[insert protected characteristic here] animus. See, e.g., Smith v. Leggett Wire Co., 220 F.3d 752, 761 (6th Cir. 2000); Ercegovich v. Goodyear Tire & Rubber Co., 154 F.3d 344, 356 (6th Cir. 1998); Conway v. Electro Switch Corp., 825 F.2d 593 (1st Cir. 1987).
1-2.1.2 Hostile Environment or Discrimination by Proxy Evidence
A particular subset of direct and circumstantial evidence is the now familiar “hostile environment,” which is a judicially created recognition that a workplace atmosphere can be so toxically polluted with discriminatory animus based on sex, race, age, religious, or national origin discrimination, for example, that a plaintiff or plaintiffs, although not precisely targeted by such misconduct, may be said to suffer harm, and be entitled to relief, if it is “severe and/or pervasive.” Faragher v. City of Boca Raton, 524 U.S. 775 (1998). Likewise, if a supervisor acts in such a way as to harm an employee in some tangible way, that action will be strictly imputed to the employer even in the absence of direct knowledge that the act(s) occurred. Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998); Reynolds v. USX Corp., 56 Fed. Appx. 80, 83 (3d Cir. 2003); Durham Life Ins. Co. v. Evans, 166 F.3d 139, 149 (3d Cir. 1999).
In Vance v. Ball State University, 133 S.Ct. 2434 (2013) the Supreme Court resolved a split in the circuits over the definition of supervisor for purposes of vicarious liability under Faragher/Ellerth analysis. The Court rejected a broad definition put forth by the EEOC and adopted by several circuits that had stressed an indivual’s ability to exercise significant direction over another’s work. Instead, a supervisor is someone empowered by the employer to take tangible emloyment actions against an employee.
1-2.1.3 Circumstantial Evidence or “Burden Shifting”
In the absence of direct evidence of discrimination, a plaintiff may still be able to carry the burden of proof in challenging an adverse employment decision by following the rubric first promulgated by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). In that case, the court was concerned with what it described as “the order and allocation of proof in a private, non-class action challenging employment discrimination,” id. at 800, and held that an individual could establish a prima facie case of race discrimination by making a four-part showing (1) that he or she belonged to a protected class, i.e., a racial minority, (2) that he or she applied for and was qualified for a job, (3) that he or she suffered an adverse employment action, i.e., that he or she was denied the job, and (4) that the position remained open after his or her rejection and the defendant sought other applicants for the position. Id. at 802.
If a plaintiff makes such a prima facie showing, the McDonnell Douglas court places a burden on the defendant employer to “articulate some legitimate, nondiscriminatory reason” for its action that, if forthcoming, in turn requires the employee to prove that the reason cited was a “pretext” for discrimination. Id. at 804. The defendant’s burden is not one of proving a nondiscriminatory motive for its action, but merely articulating one, and the plaintiff always bears the burden of proof of discrimination. Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248, 254 (1981).
The basic “burden shifting” analysis set out in McDonnell Douglas and Burdine has been applied in the other Title VII categories: sex, Greenawalt v. Clarion County, 459 Fed. Appx. 165 (3d Cir. 2012); Atkinson v. Lafayette Coll., 460 F.3d 447, 454 (3d Cir. 2006); religion, Abramson v. William Paterson Coll. of New Jersey, 260 F.3d 265, 281–82 (3d Cir. 2001); national origin, Schroder v. Pleasant Valley Sch. Dist., 458 Fed. Appx. 128 (3d Cir. 2012); Bhagat v. Hettche, 137 Fed. Appx. 507, 508 (3d Cir. 2005); ADA, Cottrell v. Good Wheels, 458 Fed. Appx. 98 (3d Cir. 2012), as well as in ADEA, Arenas v. L’Oreal USA Products, Inc., 461 Fed. Appx. 131 (3d Cir. 2012); Smith v. City of Jackson, 544 U.S. 228 (2005), and ADA cases, Raytheon Co. v. Hernandez, 540 U.S. 44, 50, n.3 (2003). It has been modified, adapted, and streamlined as circumstances required, as foretold by the McDonnell Douglas court in a footnote:
The facts necessarily will vary in Title VII cases, and the specification above of the prima facie proof required from [the plaintiff] is not necessarily applicable in every respect to differing factual situations.
411 U.S. at 802, n.13.
In the 40 years since the burden-shifting analysis was first articulated and applied, it has been used in literally thousands of cases involving a myriad of fact patterns. If one were to summarize its blackletter status today, it would be correct to say that it requires an initial showing that:
(1) the plaintiff is in a protected class or classes;
(2) the plaintiff is qualified for the position sought, currently held, or from which the plaintiff has been removed;
(3) the plaintiff has suffered an adverse job consequence; and
(4) that adverse action occurred under circumstances giving rise to an inference of
Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981); Waldron v. SL Industries, Inc., 56 F.3d 491, 494 (3d Cir. 1995); Sarullo v. United States Postal Serv., 352 F.3d 789, 797–98 (3d Cir. 2003); Kuzdrowski v. Nicholson, 314 Fed. Appx. 410, 413 (3d Cir. 2008); Jones v. School Dist. of Philadelphia, 198 F.3d 403, 410 (3d Cir. 1999); Storey v. Burns Int’l Sec. Servs., 390 F.3d 760, 763–64 (3d Cir. 2004).
The burden-shifting analysis can also be applied in a class action context when the plaintiffs allege that the defendant has intentionally acted in such a way as to suggest systemic discrimination against a minority class. Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867 (1984); Gavalik v. Continental Can Co., 812 F.2d 834, 852 (3d Cir. 1987).
At the summary judgment phase of the case, the plaintiff proceeding under a burden-shifting analysis must offer sufficient evidence to meet the requirements of the prima facie case, and, if the defendant articulates a legitimate reason for its adverse action against the plaintiff, the plaintiff must proffer some evidence of “pretext” sufficient to overcome the presumption of legitimacy that that assertion provides. In St. Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993), and Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000), the court explored in great depth the nature of the back-and-forth involved in the burden-shifting construct in light of the plaintiff’s continuing burden of proof and the methods of proving pretext.
Courts have also recognized that a plaintiff may establish pretext by what has been termed the “cat’s paw” theory of discrimination. Under this method of proof, a plaintiff may prevail if he or she can establish that even though the decision maker may not have harbored an illegal bias, that person relied on information from a subordinate who did harbor such an animus. In this scenario, the ultimate decision maker is a “cat’s paw” carrying out the illegal motivations of the subordinate employee. The Tenth Circuit discussed this theory of subordinate liability in detail in EEOC v. BCI Coca-Cola Bottling Co., 450 F.3d 476 (10th Cir. 2006), and the Third Circuit has recognized this method of proof since 1995. See, e.g., Abrams v. Lightolier, Inc., 50 F.3d 1204, 1214 (3d Cir. 1995); see also Palfrey v. Jefferson-Morgan Sch. Dist., 355 Fed. Appx. 590, 594 (3d Cir. 2009).
The Supreme Court has recently recognized and specifically approved the “cat’s paw” theory of liability in Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011), where it held that an employer may be liable even if a decision maker does not have an illegal motive, but relies, at least in part, on information provided by a subordinate who does. The Staub case arose under the Uniformed Services Employment and Reemployment Rights Act (USERRA), and is readily applicable to cases under Title VII, ADA, and ADAAA, as USERRA cases are analyzed under the same burden-shifting paradigm as other discrimination cases. The Supreme Court specifically held that an employee proceeding under a “cat’s paw” theory of liability need only establish that the discriminatory animus complained of was a motivating factor, and not that the lower-level supervisor’s animus was of “such singular influence over the decisionmaker.” Id. at 1190 (internal quotation marks omitted) see also McKenna v. City of Philadelphia, 649 F.3d 171 (3rd Cir. 2011) and Marcus v. PQ Corporation, 458 Fed. Appx. 207 (3rd Cir. 2012).
1-2.1.4 Mixed-Motive Cases
A mixed-motive case arises when an employment decision contains elements of more than one possible explanation for the underlying employment action, and all of these motivating factors may have played a part in the decision. In Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), the Supreme Court recognized that both a legal and an invidious reason might lie behind an employment decision, but that a defendant could escape liability by proving that it would have made the same decision based on the legitimate factor and regardless of the discriminatory motivation. In that gender discrimination case, Justice Brennan wrote:
To say that an employer may not take gender into account is not, however, the end of the matter, for that describes only one aspect of Title VII. The other important aspect of the statute is its preservation of an employer’s remaining freedom of choice. We conclude that the preservation of this freedom means that an employer shall not be liable if it can prove that, even if it had not taken gender into account, it would have come to the same decision regarding a particular person. The statute’s maintenance of employer prerogatives is evident from the statute itself and from its history, both in Congress and in this Court.
Id. at 282–83.
This judicial construct was abrogated by the Civil Rights Act of 1991, in which Congress legislated it out of existence and replaced it with a standard focused on the discriminatory animus as a motivating factor, “even though other factors also motivated the practice.” 42 U.S.C. 2000e 2(m). If, however, the legal motivation is established in addition to the impermissible one, the plaintiff’s remedies are limited by statute. 42 U.S.C. 2000e-5(g)(2)(B).
In Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003), the court concluded that a plaintiff may prove a mixed-motive case with either direct or circumstantial evidence. As a consequence, lower courts have held that at the summary judgment stage, the plaintiff need only produce evidence sufficient to allow a jury to conclude that an adverse action occurred and that an invidious consideration was a motivating factor for the decision. See, e.g., Houser v. Carpenter Technology Corp., 216 Fed. Appx. 263, 265 (3d Cir. 2007); Young v. St. James Mgmt., LLC, 749 F.Supp.2d 281 (E.D. Pa. 2010); Martin v. Pleasant Ridge Manor-East, Civ. No. 08-14E (W.D. Pa. March 10, 2010).
As stated by the court in Duffy v. Sodexho, Inc., Civil Action No. 05-5428 (E.D. Pa. November 17, 2008), the Third Circuit has been reluctant to apply Desert Palace in ADEA mixed-motive cases.
In Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), the Supreme Court held that mixed-motive claims may not be advanced under the ADEA, which requires a “but-for” standard of proof as opposed to Title VII’s “because of” language, and because Congress adjusted Title VII under the 1991 Civil Rights Act, but not the ADEA. Id. at 174. Unless and until Congress acts, mixed-motive cases are not now cognizable under the ADEA.
1-2.1.5 Pattern or Practice Cases
Initially developed for use in discrimination cases brought by the attorney general, which challenged a company’s “standard operating procedure” as violating Title VII, Franks v. Bowman Transportation Co., 424 U.S. 747 (1976), International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977), the “pattern or practice” method of proof has been extended to private class actions alleging discriminatory company policies under Title VII through appellate decisions relying on Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867 (1984). See, e.g., Hohider v. United Parcel Serv., Inc., 574 F.3d 169, 179, n.11 (3d Cir. 2009). In such a case, the plaintiffs have the initial burden to establish that the defendant engaged in intentional discrimination as a regular policy or procedure, i.e., to show by a preponderance that the policy exists, and is a regular, rather than an unusual, practice of the employer. If that is done, the burden shifts to the employer to demonstrate that the prima facie evidence is either “inaccurate or insignificant.” Teamsters, 431 U.S. at 360. If the plaintiffs are able to raise the issue of pretext in response to the defendant’s showing, id. at 362, n.50, and if the defendant fails to rebut the initial showing, or if pretext is demonstrated, the fact finder is free to conclude that discrimination exists and “award prospective relief” (id.), because “the finding of a pattern or practice [of unlawful discrimination] change[s] the position of the employer to that of a proved wrongdoer.” _Hohider, 574 F.3d at 179, citing Teamsters at 359–60, n.45.
If individual relief is sought as a result of the conclusion of pattern discrimination reached in the initial phase, additional proceedings are required to determine the scope of that relief for those individual class members. Cooper, 467 U.S. at 876.
1-2.2 A Word About Retaliation
Title VII, the ADA, and the ADEA all have retaliation provisions prohibiting an employer from reacting to an assertion of rights by adverse employment actions.
Under the ADEA, 29 U.S.C. 623(d) provides:
Opposition to unlawful practices; participation in investigations, proceedings, or litigation. It shall be unlawful for an employer to discriminate against any of his employees or applicants for employment, for an employment agency to discriminate against any individual, or for a labor organization to discriminate against any member thereof or applicant for membership, because such individual, member or applicant for membership has opposed any practice made unlawful by this section, or because such individual, member or applicant for membership has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or litigation under this Act.
Title VII’s prohibition is contained in 42 U.S.C. 2000e-3(a):
Discrimination for making charges, testifying, assisting, or participating in enforcement proceedings. It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment, for an employment agency, or joint labor-management committee controlling apprenticeship or other training or retraining, including on-the-job training programs, to discriminate against any individual, or for a labor organization to discriminate against any member thereof or applicant for membership, because he has opposed any practice made an unlawful employment practice by this subchapter [42 U.S.C. 2000e–2000e-17], or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter [42 U.S.C. 2000e–2000e-17].
The ADA’s antiretaliation provision is contained at 42 U.S.C. 12203:
(a) Retaliation. No person shall discriminate against any individual because such individual has opposed any act or practice made unlawful by this chapter or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this chapter.
(b) Interference, coercion, or intimidation. It shall be unlawful to coerce, intimidate, threaten, or interfere with any individual in the exercise or enjoyment of, or on account of his or her having exercised or enjoyed, or on account of his or her having aided or encouraged any other individual in the exercise or enjoyment of, any right granted or protected by this chapter.
(c) Remedies and procedures. The remedies and procedures available under sections 12117, 12133, and 12188 of this title shall be available to aggrieved persons for violations of subsections (a) and (b) of this section, with respect to subchapter I, subchapter II and subchapter III, respectively.
Proving a retaliation claim follows the same proof construct used in discrimination claims, i.e., a prima facie showing of protected activity under the cited statutes, an adverse action taken by the employer during or after that activity, and a nexus between the two. As in the consideration of discrimination, if the employer articulates a legitimate reason for its action, the plaintiff must prove pretext. See, e.g., Ade v. KidsPeace Corp., 401 Fed. Appx. 697 (3d Cir. 2010); Stouch v. Township of Irvington, 354 Fed. Appx. 660, 667 (3d Cir. 2009); Proctor v. UPS, 502 F.3d 1200, 1209 (10th Cir. 2007).
Proof of retaliation under Title VII now requires a “but-for” showing, as is the case under the ADEA after Gross, above. The Supreme Court decision in University of Texas Southwestern Medical Center v. Nassar, 133 S. Ct. 2517 (2013), held that the retaliation language of Title VII (42 U.S.C. 2000e-3(a)), like the express provisions of the ADEA (29 U.S.C. 623(a)), are clear and unambiguous in requiring that the articulated wrongdoing be the sole reason for the discriminatory event. A recent Third Circuit case, Verma v. University of Pennsylvania, 533 Fed. Appx. 115 (3d Cir. 2013), applied Nassar in affirming summary judgment and also indicated that temporal proximity alone is not sufficient to establish retaliation where negative performance reviews predated any protected activity. Id. at 119.
Both the Sarbanes Oxley (18 U.S.C.A. Sec. 1514A) and Dodd Frank (15 U.S.C.A. Sec. 78u-6(h)(1)(A),(B) statutes prohibit retaliation against whistle-blowers in publicly traded companies who suffer adverse job consequences as a result of complaints of corporate misconduct. Employees of privately held companies which provide services to publicly traded entities are also covered, Lawson v. FMR, 134 S.Ct. 1158 (2014), as well as those employed in wholly owned subsidiaries whose financial information is included in its parent’s consolidated financial statement (Dodd Frank Section 929A) and employees of firms which provide statistical ratings, such as Moody’s and Standard & Poor’s. While there are disputes between, and even within, some federal judicial districts, one district court in this circuit has held that an internal complaint under Dodd Frank is sufficient to invoke the statute’s protection (Khazin v. TD Ameritrade Holding Corporation, D. N.J. 2014, affirmed on other grounds 3rd Cir (2014)). Both statutes require adminstrative complaints to be filed with the Department of Labor within 180 days of the retaliatory conduct, and as a condition precedent to a federal lawsuit, but there is an exception allowing for direct filing in federal court under Dodd Frank in limited instances, and with a longer statute of limitations as well. (15 U.S.C.A. 78u-6(h)(1)(A) (iii), (B)(i),(iii).
1-2.3 The Issue of Sexual Orientation
Title VII as originally written and as amended does not prohibit discrimination based on sexual orientation, and Congress has repeatedly refused to include such a cause of action in the federal statutory armamentarium, rejecting the Employment Non-Discrimination Act (ENDA) in one form or another in all but one Congress between 1994 and 2014. ENDA was passed by the Senate in the 113th Congress, but made no progress through the House ofReptresentatives. A more encompassing approach was taken in the 114th Congress (2015-2016) with the introduction in both houses of the Equality Act of 2015 which would amend the Civil Rights Act of 1964 to include gender identity and sexual orientation as protected classes in employment, as well as in other social arenas such as housing, education and the like. The White House announced support for the bill in late 2015. Executive orders prohibit discrimination on the basis of sexual orientation in federal employment, protecting both government employees and those of federal contractors. In addition, the EEOC issued an opinion in mid-2015 indicating that, in federal employment at least, Title VII does cover discrimination practiced upon an employee “because of sex,” finding that sexual orientation is de facto “because of sex.” Complainant v. Anthony Fox, Secretary, Department of Transportation, Agency No. 2012-24738-FAA-03, Appeal No. 0120133080.
While such Title VII claims have been given short shrift in the courts in many instances, focusing on such an argument can bring a discrimination claim under Title VII’s umbrella, as was the case in Bibby v. Philadelphia Coca-Cola Bottling Co., 260 F.3d 257 (3d Cir. 2001), it is possible to come under the protection of Title VII by demonstrating that discrimination against “a homosexual individual” occurred “because of sex.” (See, Prowel v. Wise Bus. Forms, Inc., 579 F.3d 285, 289 (3d Cir. 2009). Sharpening the focus in such a way may work at least a partial elimination of this last major aspect of employment discrimination not prohibited by federal law, now that genetic discrimination has been outlawed. Pub. L. No. 110-233, 122 Stat. 881, enacted May 21, 2008.
1-3 DISPARATE IMPACT
As noted by Justice Kennedy in Ricci, section 2-1, above, even before McDonnell Douglas and its burden-shifting analysis was formulated for cases involving disparate treatment, the Supreme Court had recognized that facially neutral employer policies and practices could have unintended discriminatory consequences. In Griggs v. Duke Power Co., 401 U.S. 424 (1971), a unanimous court (Justice Brennan not participating) held that a defendant’s requirement of a high school diploma or passage of an aptitude/intelligence test as a necessary prerequisite for hire or transfer had a discriminatory impact on the plaintiffs, and was not justified by the needs of the business. Although there was no intent to discriminate demonstrated, id. at 432, the court found the requirements objectionable because they weren’t “demonstrably a reasonable measure of job performance” given that such tests “must measure the person for the job and not the person in the abstract.” Id. at 436. In the words of Justice Burger, “[t]he touchstone is business necessity.” Id. at 431.
In a series of cases that considered and refined the disparate impact construct, the court amplified “business necessity” by holding that test results had to be linked to “important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated,” Albemarle Paper Co. v. Moody, 422 U.S. 405, 431 (1975), or must “be shown to be necessary to safe and efficient job performance,” Dothard v. Rawlinson, 433 U.S. 321, 331 (1977). It also concluded that a test, discriminatory in its impact, could not be cured by concomitant use of “affirmative action” as an after-the-fact remedy. Connecticut v. Teal, 457 U.S. 440 (1982). In so concluding, the court noted that Title VII “operates not primarily to the benefit of racial or minority groups, but to ensure that individual applicants receive the consideration they are due and are not screened out by arbitrary policies or devices.” Teal, 457 U.S. at 453–54, as summarized in El v. SEPTA, 479 F.3d 232, 239–40 (3d Cir. 2007).
The business necessity standard was liberalized for defendants in Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989), when the court held that a disputed practice need not be “essential” or “indispensable” to survive a challenge, but must facilitate “in a significant way, the legitimate employment goals of the employer.” Id. at 659. The opinion also transferred the burden of proof from employer to employee. Wards Cove was short-lived; Congress reacted with the Civil Rights Act of 1991, transferring the burden of proof back to the defendant and codifying the definition of “business necessity” as it had been understood before Wards Cove.
The end result is that in “disparate impact” cases,
Putting these standards together, then, we require that employers show that a discriminatory hiring policy accurately—but not perfectly—ascertains an applicant’s ability to perform successfully the job in question. In addition, Title VII allows the employer to hire the applicant most likely to perform the job successfully over others less likely to do so.
El, 479 F.3d at 242.
In Lewis v. City of Chicago, 560 U.S. 205 (2010), the court held that, unlike disparate treatment cases requiring a plaintiff to show deliberate discrimination within the requisite 180/300-day period prior to filing an EEOC charge, disparate impact claims need only be filed when a challenged policy or practice is applied and not within such a period after its initial adoption. Id. at 214–15.
[Note: The lines between the disparate impact formulation and the disparate treatment method of proving discrimination have not always been rigidly observed, as noted by Justice Powell’s dissent in Teal, above, 457 U.S. at 457–60. In addition, disparate impact cases are not to be confused with “pattern and practice” cases discussed above in section 2-2.1.5. The former involve unintentional discriminatory consequences, while the latter challenge deliberate discrimination. That line is not always a bright one either, and at times may also seem more theoretical than practical.]
In Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the court reversed the Ninth Circuit’s certification of a putative class of 1.5 million female employees. The plaintiffs alleged that the defendant, by granting discretionary authority to supervisors in questions of promotion and wage increases, fostered discrimination against women in pay and promotions. The court recognized that the claims amounted to a disparate impact charge, but held that the various fact patterns present in multiple locations defeated “commonality” in judging suitability for class certification. Id. at 2545.
The Third Circuit cited Dukes in arriving at a similar decision in Rodriguez v. National City Bank, 726 F.3d 372 (3d Cir. 2013), denying class certification to plaintiffs alleging a pattern and practice of racial discrimination in mortgage loan processing. While not an employment case, the court’s reasoning in Rodriguez would seem to lend itself handily to the employment context.
1-4 CONTINUING VIOLATIONS
All of the statutory discrimination constructs require that a charge of discrimination be made within a limited 180/300-day window after a discrete act of discrimination. See 42 U.S.C. 2000e-5(e)(1); 29 U.S.C. 626(d)(1); 42 U.S.C. 12117(a). However, the Supreme Court recognized that it was proper to plead and prove a “continuing violation” where there were “present legal consequences” from past acts occurring outside the administrative filing period. United Air Lines, Inc. v. Evans, 431 U.S. 553, 558 (1977). Ms. Evans had been forced to resign under a “no married flight attendants” policy, but was later rehired as a new employee without her previous seniority. She had not filed an EEOC charge when terminated, but filed suit after her rehire, arguing that the refusal to credit her with past seniority service gave “present effect to [United’s] past illegal act and therefore perpetuate[d] the consequences of forbidden discrimination.” Id. at 578.
The court rejected that claim, holding that:
United was entitled to treat [her termination] as lawful after respondent failed to file a charge of discrimination within the 90 days then allowed by 706(d). A discriminatory act which is not made the basis for a timely charge . . . is merely an unfortunate event in history which has no present legal consequences.
Id. at 558. Evans made clear that a claim of discrimination requires a present violation, i.e., one within the administrative limitations period, and not just a continuing effect of past discriminatory action outside the period. Id. at 555.
Such a present violation of rights created by a policy adopted outside the limitations period was recognized in Bazemore v. Friday, 478 U.S. 385 (1986) (per curiam), when an ongoing salary disparity between African-American and White employees—adopted long before Title VII was applied to public employees and long before a suit was filed—was accorded continuing status because each paycheck represented a new, albeit continuing, violation. Id. at 395. Justice Brennan wrote a separate opinion, concurring in part, in which all the members of the court joined. In that separate opinion he stated:
A pattern or practice that would have constituted a violation of Title VII, but for the fact that the statute had not yet become effective, became a violation upon Title VII’s effective date, and to the extent an employer continued to engage in that act or practice, it is liable under that statute. While recovery may not be permitted for pre-1972 acts of discrimination, to the extent that this discrimination was perpetuated after 1972, liability may be imposed.
Id. at 395. Justice Brennan explained that liability was properly found to be continuing because the employer “ha[d] not from the date of the Act forward ‘made all [their] employment decisions in a wholly nondiscriminatory way,’ ” id. at 396–97, n.6 (emphasis in original), allowing him to conclude, as the court could not in Evans, above, that a “present violation” existed. He concluded by stating:
Each week’s paycheck that delivers less to a black than to a similarly situated white is a wrong actionable under Title VII, regardless of the fact that this pattern was begun prior to the effective date of Title VII.
Id. at 395–96.
Continuing violation status was refused for a college professor in Delaware State College v. Ricks, 449 U.S. 250 (1980), who was denied tenure in 1974, but did not file an EEOC charge until a year later when his terminal contract ended. The court agreed that the effect of the tenure denial did not occur for more than a year, but concluded that he failed to identify any specific discriminatory act “that continued until, or occurred at the time of, the actual termination of his employment. Id. at 257.
In Lorance v. AT&T Technologies, Inc., 490 U.S. 900 (1989), female employees challenged a seniority calculation method—which they asserted was adopted with discriminatory intent—that favored males. The court rejected the allegation as untimely, holding that the filing period for a charge ran from the time the allegedly intentionally discriminatory policy was adopted, not when its effects were felt. Id. at 907–08.
[Note: The specific situation involved in Lorance was addressed by Congress in the 1991 amendments to Title VII, allowing for Title VII liability arising from an intentionally discriminatory seniority system both at the time of its adoption and at the time of its application. (See 42 U.S.C. 2000e-5(e)(2).)]
In National Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 114 (2002), the court reaffirmed that the charge-filing period begins to run when the “discrete act” of discrimination occurs. The opinion in Morgan held that the statutory term “employment practice” is generally linked to “a discrete act or single ‘occurrence’ ” that takes place at a particular point in time. Id. at 110–11. The court declined to discuss the application of its holding to private “pattern-or-practice” cases (n.9), but did state that the statute does not “bar an employee from using the prior acts as background evidence in support of a timely claim.” Id. at 113.
It also noted that a “hostile environment” claim is by nature different, stating that:
Provided that an act contributing to the claim occurs within the filing period, the entire time period of the hostile environment may be considered by a court for the purposes of determining liability.
Id. at 117. The opinion also recognized that a filing period is subject to equitable tolling, citing Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393 (1982).
Drawing on these precedents, the court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), concluded that:
The EEOC charging period is triggered when a discrete unlawful practice takes place. A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination. But of course, if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.
Id. at 628. As the court saw the issue, Ms. Ledbetter was asserting discriminatory treatment because her employment evaluations adversely affected her pay and eligibility for raises during the term of her employment from hire in 1979 until retirement in 1998. Id. at 621.
The court stated:
Ledbetter asserted disparate treatment, the central element of which is discriminatory intent. See Chardon v. Fernandez, 454 U.S. 6, 8, 102 S. Ct. 28, 70 L. Ed. 2d 6 (1981) (per curiam); Teamsters v. United States, 431 U.S. 324, 335, n. 15, 97 S. Ct. 1843, 52 L. Ed. 2d 396 (1977); Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 1002, 108 S. Ct. 2777, 101 L. Ed. 2d 827 (1988) (Blackmun, J., joined by Brennan, and Marshall, JJ., concurring in part and concurring in judgment) (“[A] disparate-treatment challenge focuses exclusively on the intent of the employer”). However, Ledbetter does not assert that the relevant Goodyear decisionmakers acted with actual discriminatory intent either when they issued her checks during the EEOC charging period or when they denied her a raise in 1998. Rather, she argues that the paychecks were unlawful because they would have been larger if she had been evaluated in a nondiscriminatory manner prior to the EEOC charging period. Brief for Petitioner 22. Similarly, she maintains that the 1998 decision was unlawful because it “carried forward” the effects of prior, uncharged discrimination decisions. Reply Brief for Petitioner 20. In essence, she suggests that it is sufficient that discriminatory acts that occurred prior to the charging period had continuing effects during that period. Brief for Petitioner 13 (“[E]ach paycheck that offers a woman less pay than a similarly situated man because of her sex is a separate violation of Title VII with its own limitations period, regardless of whether the paycheck simply implements a prior discriminatory decision made outside the limitations period”); see also Reply Brief for Petitioner 20. The argument is squarely foreclosed by our precedents.
Id. at 624–25. The court concluded that Ms. Ledbetter was asking for special treatment of pay claims and, after extensively discussing, dissecting, and distinguishing the Bazemore precedent, which it found to have continuing validity, 550 U.S. at 633–37, it concluded that:
Ledbetter’s policy arguments for giving special treatment to pay claims find no support in the statute and are inconsistent with our precedents. We apply the statute as written, and this means that any unlawful employment practice, including those involving compensation, must be presented to the EEOC within the period prescribed by statute.
Id. at 642–43 (footnote omitted).
Reaction to the court’s Ledbetter decision resulted in Congressional action to “reinstate the law regarding timeliness of pay compensation claims as it was prior to the Ledbetter decision” Mikula v. Allegheny County, 583 F.3d 181, 184 (3d Cir. 2009). Mikula noted:
Accordingly, 42 U.S.C. 2000e-5(e)(3)(A) was amended to state:
For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation . . . when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.
The Act is retroactive and applies to all cases pending on or after May 28, 2007—the date when the Supreme Court issued the Ledbetter decision. Pub. L. No. 111-2, 6, 123 Stat. 5.
Mikula, 583 F.3d at 184. In light of Morgan and the Ledbetter amendment, the Third Circuit held in Mikula that:
Based on this framework, Mikula’s Title VII pay discrimination claim is timely as to paychecks that she received after June 20, 2006 (300 days before she filed her EEOC charge) if they reflect a “periodic implementation” of a previously made intentionally discriminatory employment decision or “other practice.”
Id. at 186. The Bazemore precedent, as amplified in Morgan and carried forward in the Lilly Ledbetter Fair Pay Act, is therefore the standard against which to measure continuing violation claims.
[Note: In Morgan, the court explicitly declined to answer the question whether a series of discrete acts might give rise to a pattern or practice suit. Morgan, 536 U.S. 101, 115, n.9 (2002).]