Pennsylvania Labor and Employment Blog : Pennsylvania Labor and Employment Lawyer & Attorney : McNees Wallace & Nurick Law Firm : Human Resources, Workplace and Business Law : Harrisburg, Lancaster, Allentown, Lehigh

A governmental employer cannot throw out a employment promotion test because it thinks that the test results have a disparate impact against a minority group unless there is a "strong basis in evidence" to believe it will be liable for discrimination unless it rejects the test results. Fear of litigation alone cannot justify an employer’s decision that is based on race even if the employer will be sued regardless of which group it favors.

In Ricci v. DeStefano, the City of New Haven, Connecticut used a validated test to select firefighters for promotion. However, the results the promotion examination to fill vacant lieutenant and captain positions showed that white candidates had scored higher than other minority candidates. Strong public opposition to use of the test followed. Confronted with arguments both for and against certifying the test results—and threats of a lawsuit either way—the City threw out the results based on the statistical racial disparity.

White and Hispanic firefighters who scored well on the exams but were denied a chance at promotions by the City’s refusal to certify the test results, sued the City, alleging that discarding the test results discriminated against them based on their race in violation of Title VII. The City responded that had it certified the test results, it could have faced Title VII liability for adopting a practice having a disparate impact on minority firefighters.

The District Court granted summary judgment for the City, and the Second Circuit affirmed. The Supreme Court reversed holding that City discriminated against the White and Hispanic firefighters who passed the test because there was not a strong basis in evidence to throw out the test scores in response to their disparate impact. The City conducted hearings on the test results and determined that there was a statistical adverse impact on minority employees. This showed that there was at least a prima facie case of disparate impact. However, this fear of litigation alone cannot justify the City’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. To reject the test, the City needed to go further and show that the exams at issue were not job related and consistent with business necessity, or if there existed an equally valid, less discriminatory alternative that served the City’s needs. Based on the record the parties developed through discovery, there was no substantial basis in evidence that the test was deficient in either respect.

Under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional, disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action. The Court’s analysis held that the City’s actions would violate Title VII’s disparate-treatment prohibition absent some valid defense. All the evidence demonstrates that the City rejected the test results because the higher scoring candidates were white. Without some other justification, this express, race-based decision-making is prohibited. The question, therefore, is whether the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination.

The Court held that certain government actions to remedy past racial discrimination—actions that are themselves based on race—are constitutional only where there is a “strong basis in evidence” that the remedial actions were necessary. The same interests are at work in the interplay between Title VII’s disparate-treatment and disparate-impact provisions. However, the Court gave little other guidance on how employers may use tests in the hiring and promotion processes.

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Effective July 10, 2009, medical insurers covering small employers in Pennsylvania will be required to offer COBRA-like continuation coverage to qualified employees and their eligible dependents. The new law covers small employers who have between two and 19 employees on a typical business day during the preceding calendar year. 

The so-called mini-COBRA coverage expands on the federal COBRA law that covers employers with at least 20 employees and allows employees who are involuntarily terminated to qualify under a federal economic stimulus law for a 65% federal subsidy of both COBRA and mini-COBRA premiums.

Like the federal law, qualifying events for coverage under the new Pennsylvania mini-COBRA are loss of group coverage due to termination of employment, death, divorce or marital separation. However, there are some key differences between the federal COBRA  and Pennsylvania’s mini-COBRA law, some of which are as follows:

• Under the Pennsylvania law, an employee or dependent must have been continuously covered by medical insurance for three months prior to termination of coverage and may not be covered or eligible for coverage under another medical plan or Medicare.
• Under the Pennsylvania law, continuation coverage must be extended for nine months; under federal COBRA law, coverage is available up to 18 months when employment is terminated and 36 months in situations involving death, divorce or legal separation.
• Under the Pennsylvania mini-COBRA law, beneficiaries can be charged a premium up to 105% of the group rate; federal COBRA beneficiaries can be charged a premium of up to 102% of the group rate.
• Pennsylvania mini-COBRA obligations apply to insurers; federal COBRA applies to employers that provide medical coverage through self-insurance or insurance products.

Employers and insurers will need to provide notices to employees and dependents of the provisions of the new law as well as their rights to elect continuation coverage upon the occurrence of a qualifying event.

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The United States Supreme Court decision in Gross v. FBL Financial Services, Inc. creates a rift between the treatment of so called "mixed-motive" cases under the ADEA and Title VII. Under Title VII, an employee may allege that he suffered an adverse employment action because of both permissible and impermissible considerations—i.e., a “mixed-motives” case. If a Title VII plaintiff shows that discrimination was a “motivating” or a “ substantial” factor in the employer’s action, the burden of persuasion shifts to the employer to show that it would have taken the same action regardless of that impermissible consideration.

The Supreme Court declined to apply the mixed-motive burden shifting to ADEA cases holding that a plaintiff bringing an ADEA disparate-treatment claim must prove, by a preponderance of the evidence, that age was the “but-for” cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision.

Congress amended Title VII to explicitly authorize discrimination claims where an improper consideration was “a motivating factor” for the adverse action, see 42 U. S. C. §§2000e–2(m) and 2000e–5(g)(2)(B),while leaving the ADEA language unchanged. The Supreme Court viewed this omission as a congressional policy statement and declined to recognize the so called "mixed motive" analysis in ADEA claims. However the Courts' opinion invites Congress to fix the discrepancy by legislatively negating the Court's decision much like it did in with both the ADA Amendments Act and the Ledbetter Fair Pay Act:

Unlike Title VII, the ADEA’s text does not provide that a plaintiff may establish discrimination by showing that age was simply a motivating factor. Moreover, Congress neglected to add such a provision to the ADEA when it amended Title VII to add §§2000e–2(m) and 2000e–5(g)(2)(B), even though it contemporaneously amended the ADEA in several ways, see Civil Rights Act of 1991, §115, 105 Stat. 1079; id., §302, at 1088.

Expect Congress to harmonize the treatment of Title VII and ADEA claims so that the mixed motive analysis applies to both. Congress should really fix the differentiation between age discrimination cases and other discrimination claims. For some reason unknown to me, Congress placed protections from age discrimination in the Fair Labor Standards Act (governing topics like minimum wage and overtime) rather than just adding "age" to the list of Title VII's protected classifications. As a result, federal age discrimination claims have different rights, procedures, and damages.

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On June 9, Facebook, the social networking website, publicly announced that beginning Saturday, June 13 at 12:01 a.m. U.S. EDT, it will allow users to adopt personalized username URLs (e.g., facebook.com/yourname). Trademark owners who want to prevent their trademarks from being registered as a Facebook username URL by another Facebook user should take action as soon as possible and preferably before Saturday.

According to a release by our Intellectual Property Group, it is suggested that once a URL is assigned to a user it cannot be transferred, and under the new Facebook policy it can never be used again, even by the rightful owner of the trademark. Trademark owners who might someday consider marketing through Facebook are encouraged to reserve their trademarks before Saturday, June 13 when the general registration opens.

Trademark owners can reserve their trademark on the Facebook platform by submitting relevant information to Facebook through its trademark protection contact form, available at Preventing the Registration of a Username | Facebook. It appears that a separate form is required for each trademark and registration number. Facebook promises to then advise the trademark owner when the username URL is available for the owner to adopt.

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An employer's liability for co-worker harassment exists if the employer knew or should have known of the harassment and failed to take prompt remedial action. In other words, an employer may be liable for non-supervisory co-worker harassment if the employer was negligent in failing to discover the co-worker harassment or in responding to a report of harassment. Knowledge of a sexually hostile work environment arises when a "management level employee" obtains enough information to raise the probability of sexual harassment in the mind of a reasonable employer.

In its decision in Huston v. The Proctor & Gamble Paper Products Corp., the Third Circuit Court of Appeals concluded that an employee’s knowledge of allegations of co-worker sexual harassment may typically be imputed to the employer in two circumstances:

1. "where the employee is sufficiently senior in the employer’s governing hierarchy, or otherwise in a position of administrative responsibility over employees under him, such as a departmental or plant manager, so that such knowledge is important to the employee’s general managerial duties. In this case, the employee usually has the authority to act on behalf of the employer to stop the harassment, for example, by disciplining employees or by changing their employment status or work assignments. The employee’s knowledge of sexual harassment is then imputed to the employer because it is significant to the employee’s general mandate to manage employer resources, including humanresources;" or
2. "where the employee is specifically employed to deal with sexual harassment. Typicallysuch an employee will be part of the employer’s human resources, personnel, or employee relations group or department. Often an employer will designate a human resources manager as a point person for receiving complaints of harassment. In this circumstance, employee knowledge is imputed to the employer based on the specific mandate from the employer to respond to and report on sexual harassment."

The court went on to clarify that mere supervisory authority over the performance of work assignments by other co-workers is not, by itself, sufficient to qualify an employee for management level status unless the worker has  a mandate generally to regulate the workplace environment. This reasonably bright line test should help employers to avoid allegations of constructive knowledge of workplace problems; provided, job descriptions clearly define the employee's job duties. Employers should examine generalized policy statements that create a "duty" to report workplace harassment or mistreatment.

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U.S. Citizenship and Immigration Services’ (USCIS) announced the third postponement of the implementation of the final rule requiring federal contractors and subcontractors to begin using E-Verify system which is now delayed until Sept. 8, 2009.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (collectively known as the Federal Acquisitions Regulatory Councils) will published an amendment in the Federal Register on June 5, 2009, postponing the applicability of the final rule until Sept. 8, 2009. The rule was first published on Nov. 14, 2008 requiring federal contractors and subcontractors to agree to electronically verify the employment eligibility of their employees. I previously summarized the rule in "E-Verify Final Regulations Issued Requiring Government Contractors and Subcontractors to Verify Employment for New and Existing Employees who Perform Contract Work."

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The Bureau of Labor Statistics numbers for May show the national unemployment rate reaching a 26 year high to 9.4% up from 8.9% in April.  The number of unemployed persons increased by 787,000 to 14.5 million.  Since the start of the recession in December 2007, the number of unemployed persons has risen by 7.0 million, and the unemployment rate has grown by 4.5 percentage points.

Unemployment rates rose in May for adult men (9.8%), adult women (7.5%), whites (8.6%), and Hispanics (12.7%).  The jobless rates for teenagers (22.7%) and blacks (14.9%) were little changed over the month.  The unemployment rate for Asians was 6.7% in May, not seasonally adjusted, up from 3.8 percent a year earlier.

The BLS statistics by job class and sector continue to show weakness in the construction, manufacturing, wholesale/retail and leisure/hospitality sectors.  All sectors are as follows:

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The ADA Amendments Act re-wrote the definition of disability so that it will likely include obesity-related health conditions and perhaps obesity itself as a protected disability. Before the ADA Amendments, being overweight and even obese was not generally considered a "disability". For example in EEOC v. Watkins Motor Lines, Inc., a court determined that non-physiological morbid obesity was not a protected disability.

The EEOC is considering regulations regarding the equal employment provisions of the ADAAA.  In December 2008, the EEOC commissioners deadlocked along party lines on whether to approve former Chair Naomi Earp’s proposed regulations. According to the EEOC’s agenda, a notice of proposed rulemaking will be issued by August of this year.  I predict that obesity will become a protected disability requiring employers to reasonably accommodate the condition.  I also expect that the correlation between BMI and obesity will be challenged by agruing that disqualifying an employee based on a high BMI consistitutes "regarded as" disability discrimination.

The ADA changes have important implications for businesses including employment discrimination claims, health plan design, and wellness program administration. There are several issues that merit discussion when examining obesity such as following. 

What is Body Mass Index (BMI)? BMI has become the unofficial scientific measure for assessing obesity. BMI is a function of height and weight (BMI calculator). The Center for Disease Control classifies a person who has a BMI of less than 18.5 as underweight; normal is 18.5-24.9; overweight is 25-29.9; obese is over 30; and extremely obese is over 40.

What is the BMI analysis telling us about our weight? A Report by the Trust for America's Health recently disclosed statistics about obesity trends. In the Report, Pennsylvania had the 24th highest rate of adult obesity with 25.7 percent of its population having a BMI over 30. The Report correlated obesity figures with other factors like Diabetes and Hypertension rates. It also noted levels of admitted physical activity (or inactivity). Twenty-Four percent of Pennsylvanians admit no physical activity.

How good is BMI as a measure of obesity? Martica Heaner points out the limitations of BMI in her posts BMI Blues and Is Body Mass Index a Bad Measure?:

The BMI works well for research purposes, but doesn’t necessarily translate precisely to the individual. Unfortunately, it tends to convey that people that exercise regularly, for example, are overweight, when they are not actually overfat. A fit person tends to have more muscle, so their body weight is a reflection of body fat as well as muscle and other lean tissue.

Since the problem with being overfat is that health risks are increased, a BMI in the overweight range is probably not a negative indicator for a fit person. Regular exercise, low body fat and increased muscle mass are all factors that tend to outweigh any health risks suggested by a higher BMI.

Is there correlation between high BMI and bad health? According to the CDC, the BMI ranges were established based on the health consequences associated with obesity as determined by different BMIs. Some, like Paul Campos in his book, The Obesity Myth, challenge this conclusion. However, the correlation between high BMI and bad health is quickly becoming an assumption.

Other than being incorrectly labeled "overweight" or "obese", why should we care whether BMI is a accurate health status predictor? BMI is fast becoming the legal standard for determining whether someone is "obese" and therefore a "health risk". Those with high BMIs can face increase cost and eligibility barriers for certain employee benefits.

Individual insurance policies for life, disability and medical insurance almost universally use underwriting procedures that take into account BMI as a basis for determining insurability and premium. A survey by the Texas Office of Public Insurance Counsel found that insurance company individual health plan underwriting guidelines used BMI as a basis to deny coverage, charge a higher premium, and offer less coverage. The California Insurance Commission has made comments alerting consumers about BMI as a basis for insurance denial.

Some group health plans are community rated and not subject to medical underwriting. These plans calculate premium based on the expected claims of the community not the individual employer group. Other group health insurance programs can be subject to medical underwriting in which BMI analysis and other factors will be used to price the coverage for the group. An employer with a compliment of employees with potential for high claims (including high BMI) will face higher premiums or denial. Likewise, self-insured medical plans that utilize stop loss coverage may undergo medical underwriting where BMI will be factored into the rate for reinsurance.

Group health plan wellness program incentives may be keyed to BMI targets for premium discounts and other incentives. The availability of incentives to those with high BMI is subject to limitations including situations when it is "unreasonably difficult" or "medically inadvisable" for a participant to attempt to achieve the BMI standard.

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The Gosselin Family, which has been the center of a media attention in recent weeks, is reportedly under investigation by the Pennsylvania Department of Labor and Industry for child labor law violations stemming from their children's appearance on the reality TV show "Jon & Kate Plus 8". Much of the reality show is filmed in the family's Wernersville, Pennsylvania home. The Gosselins have twin daughters age 8 and five-year old sextuplets, all of whom appear on the show.

The obvious legal issue is whether a children's involvement in a reality TV filmed in the children's home with the participation of parents constitutes "work in, about, or in connection with, any establishment." An "establishment" is a place "where work is done for compensation of any kind, to whomever payable." Children employed on a farm or in domestic service in private homes are excluded.

In Commonwealth V. McKaig (decided in 1937), a court found that it is not a violation of child labor laws for a nine year old child to give skating exhibition for an amateur skating society where she received no compensation; the exhibition was not for profit, although admission fee was charged; and the exhibition was not held at place of public resort but one privately leased for purely private purpose. The court focused on the role that the child played in the overall program and found that it is material that professional skater appeared on same program for compensation if child's skating was in no way linked with his. However, a child would have been engaged in "work" If  the participation of the child been "linked with commercial channels and so connected with the work of others as to be immediately supplementary to that work or in direct aid and direction of the work of others." Reality TV as "work" will be an interesting legal issue. The Gosselin children play an integral part the show and their roles may be somewhat staged. Furthermore, the family has created a business around the show. 

Pennsylvania's Child Labor Law regulates that hours and types of work that minors under the age of 18 may perform. The Child Labor Law specifically requires the Department of Labor and Industry (L&I) issue a special permit for "the employment of minors seven and under eighteen years of age in theatrical productions, musical recitals or concerts, entertainment acts, modeling, radio, television, motion picture making, or in other similar forms or media of entertainment in Pennsylvania where the performance of such minor is not hazardous to his safety or well-being." The Child Labor Law requires that performances occur before 11:30 p.m. and be no more frequent than two per day and 8 per week. There are also rules for "temporary" employment of minors as part of the performing cast in the production of a motion picture, if the department determines that adequate provision has been made for the educational instruction, supervision, health and welfare of the minor provided a minors work as part of the performing cast does not exceed forty-four hours in any one week and eight hours in any one day.

With the end of school approaching and children entering the summer workforce, employers should review their child labor law compliance.

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