Management Update Newsletter

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Volume 7, Issue 3

March 2018

Second Circuit Rules Gay Workers Protected Under Civil Rights Act

On February 26, the U.S. Court of Appeals for the Second Circuit ruled that employers may not discriminate against workers based on their sexual orientation. The ruling ignored the Justice Department's argument that Title VII of the 1964 Civil Rights Act does not explicitly protect sexual orientation discrimination in the workplace. The decision makes the Second Circuit the second federal appellate court to rule that the protections of the Civil Rights Act should be extended to include sexual orientation. However, a third appeals court, the Eleventh Circuit in Atlanta recently ruled that sexual orientation is not protected under Title VII. While the Supreme Court has denied to accept a writ application filed by the plaintiff in the Atlanta case, the decision by the Second Circuit, along with an earlier decision by the Seventh Circuit in Chicago, may be enough to prompt the Supreme Court to consider the issue.

Wisconsin City's Anti-Discrimination Ordinance Facing Legal and Legislative Challenges

De Pere, Wisconsin, a suburb of Green Bay has set a March 1 enactment date for its ordinance banning discrimination based on sexual orientation, gender identity and other non listed protected classes under state and federal law. However, the measure is facing legal and legislative challenges. While Title VII of the 1964 Civil Rights Act does not specifically mention sexual orientation as part of sex discrimination, Federal Courts are split on whether sexual orientation is protected. The Seventh Circuit was the first circuit court to rule that the federal law does cover sexual orientation discrimination. The Second Circuit recently followed suit in February as reported above. Five area churches and a Christian radio station filed a lawsuit on February 22 attempting to block the ordinance. The lawsuit claims the ordinance does not accommodate free exercise of religion because it would bar them from making employment decisions and facility access based on whether groups or individuals act according to their Christian teachings. In addition to the lawsuit, there is a bill in the Wisconsin state legislature that would effectively block De Pere and other local jurisdictions from implementing a wide range of workplace-related measures. Those measures would include discrimination, minimum wage, unions and worker scheduling. On February 22, the legislature's lower chamber, the Wisconsin State Assembly, passed the bill after stripping the portion that would block anti-discrimination rules.

Class Lawsuit Claims Discrimination and Gender Bias Against Corning Inc.

Corning Inc., a materials science giant, is facing a race discrimination and gender bias class action lawsuit. The lawsuit, filed by Yulonda Woods-Early in federal court in Rochester, N.Y. on February 22, claims that Corning intentionally places black and female employees in nontraditional, lower-paying positions which excludes them from promotion to lucrative senior roles, effectively reserving those positions for white men. The complaint also alleges that Corning uses racially and sexually discriminatory payment practices that has black employees - especially black women - earning less than their non black and male counterparts even when they are performing similar jobs under similar conditions. According to Woods-Early, performance scores for black and female professionals are rounded down company wide while the scores of white male professionals are rounded up. She claims that Corning repeatedly ignored complaints about promotion and pay bias from herself and other employees. Woods-Early claims that a common practice at Corning was to deny performance reviews or artificially lower reviews for black and female employees which limited their promotional opportunities.

Staffing Company Cannot Force Arbitration for Truck Driver

A California appellate court has ruled that Cornerstone Staffing Solutions, a transportation staffing company, cannot force a truck driver to arbitrate his wage and hour claims. The ruling is part of a number of cases, some of which have made it to the U.S. Supreme Court, that are calling into question the validity of class action waivers and employee arbitration agreements under the Federal Arbitration Act (FAA) and federal labor laws. Generally, the FAA supports the enforcement of arbitration agreements against employees in interstate commerce positions, but transportation workers are not covered under the FAA. According to the lawsuit, Tony Muro, a truck driver hired by Cornerstone Staffing Solutions, proposed a wage and hour class action that alleged that he and other employees were denied meal and rest periods and other benefits required under California law. Cornerstone argued that the employment agreement with Muro required him to arbitrate individually. Cornerstone claimed that, as a staffing company that derived 8 percent of revenue from logistics clients, it wasn't engaged in transportation which meant that Muro could not claim to be exempt from the FAA. However, the appellate court judge agreed with the lower court's decision that the company was at least partly involved in the transportation industry and therefore subject to the transportation industry exemption from the FAA.

Sixth Circuit Decision in Kelsey-Hayes Retiree Benefit Case Must Be Revisited After Supreme Court Decision In Similar Case

On February 26, the U.S. Supreme Court ordered the U.S. Court of Appeals for the Sixth Circuit to revisit its 2017 decision which awarded lifetime health benefits to certain retirees of Kelsey-Hayes Co., an auto parts manufacturer. The order comes after the Supreme Court ruling that clarified how disputes over union retiree health benefits should be handled. The Sixth Circuit had previously said retirees from Kelsey-Hayes were entitled to lifetime benefits because a collective bargaining agreement between the company and the United Auto Workers union was ambiguous. The order comes one week after the justices rebuked the recent Sixth Circuit decision in a similar case, CNH Industrial N.V. v. Reese. The Supreme Court determined the proper way to handle these disputes was to use ordinary principles of contract law to analyze relevant bargaining agreements, rather than the Sixth Circuit's method, which the Justices said was rooted in inferences and assumptions that had a pro-retiree bent.