The EEOC held that “[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”  The EEOC noted that sex-based considerations also encompassed gender-based considerations under Title VII. This ruling, if accepted by federal courts, would extend protection under Title VII to decisions made on the basis of sexual orientation. While only the Supreme Court can issue a final, definitive ruling on the interpretation of Title VII, EEOC decisions are given significant deference by federal courts.

Employers across the U.S. should anticipate that overt actions, practices, and harassment that could be construed as discriminatory on the basis of a worker’s sexual orientation will be challenged in federal court and subject employers to potential liability.

As we’ve previously advised, make sure you are prepared for interns this summer! This summer there’s a new legal trend about interns. While wage and hour lawsuits are still hot, the new “it” trend seems to be laws that extend protection against discrimination and harassment for interns.  Recently, states and cities have been adding interns to the protected individuals under their human rights laws.

Retailers have long used interns, both to provide training opportunities for the interns and to supplement their workforce over the summer months. Whether an intern should be paid or unpaid (meeting the test of a “trainee”) is a determination that should be made using the federal six-factor test, and any applicable state tests. 

Regardless if the intern is paid or unpaid, certain policies and procedures need to be tailored to interns, and should differ from those given to regular employees. While recruitment efforts and offer letters need to be prepared just for interns, certain benefits and policies may need to be provided to all workers – even unpaid interns.

This year, New York City joined Washington, D.C. and the state of Oregon in passing a law protecting interns from sexual harassment, and other forms of employment discrimination. Now, several other states are seeking to expand those same protections to interns. In the past month, legislatures in California, New York, and Illinois have debated and voted on these bills.

The decision to give interns the same protections against discrimination and harassment as employees could affect how interns are treated under wage and hour laws. While the NYC law states that it applies to both paid and unpaid interns, it doesn’t make any determination as to whether those interns should be classified as employees, to receive minimum wage and potentially overtime.

The proposed New York state legislation addresses such concerns that some employers may have over the decision to extend anti-discrimination protections to interns. The current text of the bill, which has advanced to the third reading within the state Senate, provides that “nothing in this section shall create an employment relationship between an employer and an intern.”

A similar law is pending in Illinois, but it has been amended to only protect unpaid interns who meet a certain set of factors, which are similar to the federal six-factor test:

the person works for the employer at least 10 hours per week; the employer is not committed to hiring the person at the conclusion of his or her tenure; the employer and the person agree that the person is not entitled to wages for the work performed; and the work provides experience for the benefit of the person, does not displace regular employees, and is performed under the close supervision of staff.

The wording of the Illinois bill shows that legislators are aware that granting unpaid interns, who may not qualify as employees under the law, rights typically only afforded to employees could affect their employment status.

As more states continue to address whether interns, paid or unpaid, will be protected under anti-discrimination laws, stay tuned to the Retail Labor and Employment Law blog for any updates. If you’re having interns this summer in NYC, DC or Oregon, make sure policies and procedures are updated and are distributed to all employees and non-employee interns!

In a matter of first impression, the California Court of Appeal held last month that an employee who exhausts all permissible leave under the Pregnancy Disability Leave (“PDL”) provisions of the California Fair Employment and Housing Act (“FEHA”) and is terminated by her employer may nevertheless state a cause of action for discrimination.

In Sanchez v. Swissport, Inc., the plaintiff, a former employee of Swissport, alleged that she was diagnosed with a high risk pregnancy requiring bed rest in February 2009 and was due to give birth in October 2009. The plaintiff alleges that she made Swissport aware of her condition and need to remain on bed rest until after the birth of her child. However, with three months remaining in her pregnancy, the plaintiff was terminated by Swissport in July 2009 after exhausting her 4-month PDL entitlement as well as her accrued vacation. The plaintiff alleges that she would have been able to return to work shortly after October 2009 and that her employer never engaged in the interactive process in order to identify available accommodations, such as the extended leave of absence she had requested.

At the trial court level, Swissport challenged the lawsuit on the grounds that the plaintiff had exhausted her PDL entitlement and that no further leave was required. The trial court agreed and the plaintiff appealed. Reversing the decision, the Court of Appeal stated that an employee’s entitlements under PDL are supplemental to the general non-discrimination provisions of FEHA.

While an employer must provide 4 months of PDL to an employee disabled by pregnancy without regard to the hardship to the employer, its duty continues after PDL has been exhausted to engage in the interactive process with the employee to determine whether it may accommodate the disability. Continuing the leave of absence may be a possible accommodation if it will not be an undue hardship to the employer.

This case presents a cautionary tale to employers who base termination decisions simply on the exhaustion of a guaranteed leave entitlement under state or federal law. In all cases, where an employee exhausts their guaranteed leave entitlement but seeks to continue his or her leave of absence due to disability, employers should consider whether an extended leave of absence may be accommodated. If it will be difficult to accommodate an extended absence in the employee’s current position, an employer may also consider transferring the employee to a comparable vacant position and continuing his or her leave of absence from that position. Discussing available options with counsel is highly recommended.

Last month, the California Court of Appeal ruled that a former employee of Forever 21 must try her claims against the retailer in arbitration, enforcing the company’s employment arbitration policy and reversing a lower court decision finding the agreement unconscionable under California law.  The plaintiff, Maribel Baltazar, alleged that she had been discriminated against by the retailer due to her race and sexually harassed by a supervisor and coworker.  She filed a complaint against Forever 21 and several of its employees in the Los Angeles Superior Court and the retailer moved to compel Baltazar to arbitration.

Reversing the lower court, the Court of Appeal found that Baltazar had been given the opportunity to review the arbitration agreement, which was contained in her employment contract, and that the contract’s provision allowing the parties to seek injunctive relief in court did not unduly favor Forever 21.  The panel noted that six of the claims asserted in Baltazar’s suit were brought under the Fair Employment and Housing Act (“FEHA”), which authorizes injunctive relief, and that there was nothing to suggest that the employer would be more likely than the employee to seek provisional remedies.

Injunctive relief provisions have sounded the death knell for many employment arbitration agreements in California of late, with multiple appellate decisions citing an injunctive remedy as unduly favoring the employer.  Ostensibly, these courts are inclined to believe that an employer is more likely than an employee to seek injunctive relief.  The Baltazar court felt otherwise. Until this issue is considered by the California Supreme Court, it remains likely that the luck of the draw will ultimately decide whether an arbitration agreement is enforceable if it contains a provisional remedies provision that allows parties to seek an injunction in court.

New York management-side attorneys and their clients were surprised and chagrined when they read Bennett v. Health Management Systems, Inc., a case decided in December 2011 by the New York State Supreme Court, Appellate Division, First Department (“the First Department”), which sits in Manhattan.  Writing for the unanimous five-judge court, Justice Rolando Acosta directed that because the New York City Human Rights Law (“NYCHRL”) explicitly provides that it should be liberally construed, summary judgment motions should only be granted in the employer’s favor in “rare and unusual” circumstances.

Justice Acosta stated that even if a terminated employee is unable to produce any evidence of discrimination, summary judgment should be denied and a jury trial ordered if the employee can show that the employer’s reason for the termination is “false, misleading or incomplete.”  For example, if an employee with a poor performance record is terminated because of his performance, but his supervisor – to spare his feelings – tells him only that his job was eliminated, a jury trial would be required to determine whether discrimination occurred under the NYCHRL.  Under federal and New York State law (e.g., Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the New York State Human Rights Law), summary judgment for the employer would likely be granted in such circumstances based on the absence of evidence pointing to discrimination as the reason for the termination.

Recently, however, in Melman v. Montefiore Medical Center, (1^st Dep’t May 29, 2012), a different First Department panel disagreed with the Bennett decision.  In a 4-1 majority opinion, with Justice Acosta as the lone dissenter, the First Department returned to the traditional guiding rule in employment discrimination cases that to defeat an employer’s summary judgment motion, the employee must not only produce some evidence showing that the employer’s reason for its decision was “false, misleading or incomplete,” but also evidence demonstrating that “discrimination was the real reason” for the employer’s decision.

The First Department in Melman explained that when there is no evidence of discrimination, a court “should not sit as a super-personnel department that reexamines an entity’s business decision.”  Referring to one of Justice Acosta’s contrary arguments, the Court stated that his “approach appears quite radical to us.”  And the Court concluded, using language that all employers can appreciate, “we see no justification for allowing a meritless lawsuit to continue to divert Montefiore’s limited resources, and the time attention of its staff, from the hospital’s true mission of advancing medicine, protecting public health, and healing the sick.”

The First Department’s decision in Melman is consistent with the decisions of other courts construing federal and New York State anti-discrimination laws.  While the NYCHRL will continue to be interpreted liberally by all courts, an employee is still required to come forward with some evidence of discrimination or else summary judgment should be granted.