Although not contractually required to do so, many employers offer their management-level employees a severance package in the event of a reduction-in-force or some other non-disciplinary event which requires an employer to terminate a relationship with a managerial employee. The terms and compensation contained in severance packages usually depend upon salary, years of service, and work performance and/or value of the employee to the employer. However, if an employee can show that the terms of a severance package offered to them are less favorable than those offered to other, similarly situated employees, the employee may be able to state a claim for discrimination.
In the case of Gerner v. City of Chesterfield, Virginia (2012), the United States Court of Appeals for the Fourth Circuit reversed a lower court ruling from the Eastern District of Virginia and found that although a severance agreement is offered upon employment termination and is not a contractual right, it is nevertheless an employment benefit upon which a discrimination claim may lie. Finding that the district court judge (Hudson, J.) erred in his analysis of the legal standard, the appellate court held Title VII protects current and former employees from discrimination, as well as those who have not been hired and have been discriminated against in the hiring process. Further, the Court found that Ms. Gerner's allegations that she was offered a less favorable severance package than her male counter-parts under the City’s reduction-in-force plan, were sufficient to allege an adverse employment action for a gender discrimination claim. In making its ruling, the Court relied upon U.S. Supreme Court precedent and decisions from other Circuit Courts.
This decision by the Fourth Circuit, which is the highest federal appellate court for Virginia, Maryland, West Virginia, and the Carolinas, is a reminder to employers that they must be vigilant in making sure that employment benefits (even severance packages which are often viewed as “voluntary” or “discretionary”) are provided on an equitable basis. Alternatively, employers must make sure that they have a strong, non-discriminatory, reason for any difference in the provision of such benefits among similarly situated employees.
© Copyright, PCT Law Group 2012, all rights reserved.
The Fourth Circuit Court of Appeals allowed a former city employee’s sexual harassment and retaliation claims to proceed to trial by reversing a lower court ruling which granted summary judgment in favor of the employer. Plaintiff Katrina Okoli, formerly an executive assistant for John P. Stewart, the director of Baltimore’s Commission on Aging and Retirement, filed a lawsuit alleging sexual harassment hostile work environment, quid pro quo sexual harassment, and retaliation. In the case of Okoli v. City of Baltimore, et al., Plaintiff Okoli alleged that over a four month span, Defendant Stewart repeatedly sexually propositioned her; told her of his alleged sexual exploits; asked her about her underwear; fondled her leg underneath a table on several occasions; and forcibly tried to kiss her when they were alone in a conference room. Okoli alleged that she rejected such advances by Stewart and also twice complained about the harassment to officials within the City government, as well as wrote a letter to Baltimore’s then-mayor Martin O’Malley concerning the harassment. Okoli was fired by Stewart just hours after her letter was received by the mayor’s office.
For its part, the City contended (and apparently the lower court agreed) that Stewart’s conduct was sporadic and infrequent and did not rise to the level of a hostile work environment. Further, the City argued that Okoli’s work had deficiencies, and that she was going to be fired even before she wrote the letter complaining of Stewart’s behavior. Additionally, the City argued, Okoli’s letter was non-specific and did not state that she was being “sexually” harassed by Stewart, only “harassed.” Therefore, they argued, Okoli did not engage in protected activity under Title VII to warrant a retaliation claim against the City.
The Appellate Court disagreed and held that the statements attributed to Stewart were both severe and pervasive. In addition, the Court held that a plaintiff need not mention the “magic words” of “sex” or “sexual” to effectively advance a sexual harassment complaint. Citing decisions from other circuit courts, the Court held that the complainant only need put the employer on notice that unlawful behavior is afoot. Okoli’s use of the words “unethical,” “degrading and dehumanizing” in her letter complaining about Stewart’s behavior were enough to raise a sexual harassment complaint. Finally, the Court determined that the district court erred in concluding that simply because Stewart had a document on his computer that pre-dated Okoli’s letter, such document was a termination letter. Stewart modified the computer document three times before delivering it to Okoli as a termination letter just hours after her sexual harassment complaint reached the mayor’s office. Under those facts, the Court concluded that there was sufficient evidence to infer that Stewart did not intend to fire Okoli prior to receiving word that she complained about his behavior to the mayor and his staff.
The Fourth Circuit Court of Appeals hears appeals involving Virginia employment cases.
© Copyright, PCT Law Group 2011. All rights reserved.
In a unanimous recent opinion, the United States Supreme Court broadly construed the term “person aggrieved” in Title VII's antiretaliation provision to include a co-worker who is a relative or close associate of a targeted employee.
In the case of Thompson v. North American Stainless, LP, Plaintiff Thompson worked as a metallurgic engineer for North American Stainless (“NAS”), the owner and operator of a stainless steel manufacturing facility in Kentucky. Thompson began dating a coworker, and thereafter they became engaged to be married. According to the lawsuit, the couple’s engagement was common knowledge at the facility. Three weeks after the Equal Employment Opportunity Commission notified NAS that Thompson’s fiancée had filed a discrimination charge, NAS fired Thompson. Thompson pursued a retaliation claim against NAS for his discharge.
NAS moved for dismissal of the case before trial, contending that Thompson’s claim of third-party retaliation under Title VII was insufficient as a matter of law. The trial court granted NAS’s motion for summary judgment, which decision was affirmed by the Sixth Circuit Court of Appeals. In denying Thompson a trial, the Sixth Circuit joined several other appeals courts in holding that the authorized class of claimants under Title VII’s antiretaliation provision is limited to persons who have personally engaged in protected activity.
The Supreme Court disagreed, and rejected this narrow interpretation of aggrieved persons under the law. However, it declined to expand the provision into the outer boundaries of the standing standard set forth in Article III of the Constitution – which would allow anyone who claimed an injury by a Title VII violation to sue. The Court noted that such expansive interpretation would allow a shareholder to sue a company for firing a valuable employee for racial discriminatory reasons if he showed a decrease in his stock value as a consequence.
In settling on the middle ground, the Supreme Court stated that “Title VII’s antiretaliation provision must be construed to cover a broad range of employer conduct.” The Court’s concern was to prohibit employer action that would dissuade a reasonable employee from asserting or supporting a discrimination claim. Thompson fell within the zone of interests protected by the law.
Employment Pointer: This decision clears up the ambiguity over whether third parties have standing to sue for retaliation under Title VII. Although, the Court noted that there is no bright line test for who is protected. Given the broader scope of persons to be protected under this law, companies must be aware of its management’s underlying reasons for adverse employment actions and ensure that indirect revenge against an employee for filing a discrimination charge has not been a contributing factor.
Even If Not Subject To Federal Law, Virginia Small Businesses May Still Be Prohibited From Discrimination Under Virginia Law
Although employers with less than 15 employees are generally not subject to federal discrimination statutes such as Title VII and the Americans with Disabilities Act, Virginia small businesses may still find themselves subject to Virginia’s discrimination laws even if they have fewer than 15 employees.
The Virginia Human Rights Act, which applies to Virginia businesses with more than 5 but less than 15 employees, makes it unlawful for a Virginia employer to discharge an employee on the “basis of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions,” or age (if the employee is over 40). An employee may file a lawsuit against an employer for an alleged violation of the Virginia Human Rights Act in either a general district court or a circuit court, provided the employee files the action within 300 days from the date of termination. (If the employee files a complaint with a human rights agency or commission within 300 days of the termination date, then the employee may bring a court action within 90 days from the date the commission or agency has rendered a final ruling on the complaint.) Employers who are found to have violated the Virginia Human Rights Act may be liable for the employee’s attorneys’ fees and up to 12 months of back pay with interest.
Under the Virginians with Disabilities Act, it is unlawful for employers of all sizes to “discriminate in employment or promotion practices against an otherwise qualified person with a disability solely because of such disability.” To comply with the Virginians with Disabilities Act, an employer must make a “reasonable accommodation to the known physical and mental impairments of an otherwise qualified person with a disability, if necessary to assist such person in performing a particular job, unless the employer can demonstrate that the accommodation would impose an undue burden on the employer.” Under Virginia disability law, whether an accommodation would impose an undue burden on an employer depends on a variety of factors such as potential hardship on the employer, the size of the facility where the employment occurs, the nature and cost of the accommodation, and safety and health considerations. (For Virginia employers with less than 50 employees, any accommodation that would exceed $500 is presumed to impose an undue burden.) Employers who are found to have violated the Virginians with Disabilities Act may be subject to an injunction (to enjoin the violation) or ordered to pay the employee compensatory damages and attorneys’ fees.
Virginia business owners should visit the Virginia Human Rights Council’s website for more information regarding the Virginia Human Rights Act and the Virginia Department of Rehabilitative Services' website for additional information pertaining to the Virginians with Disabilities Act.