Whistleblowers—Public Heroes in an Uncertain Time for Workplace Safety

This morning, Dr. Rick Bright is testifying on Capitol Hill. Dr. Bright is known for being fired from the Biomedical Advanced Research and Development Authority for opposing the use of a drug falsely touted by Trump as a possible coronavirus treatment. His testimony today, which is in progress during this writing, has emphasized safety measures he believes the federal government should be making to prevent the spread of the deadly disease.

The current COVID-19 pandemic has heightened the importance of whistleblowers such as Dr. Bright reporting workplace safety like never before. Workers who still must report to a physical work site depend on their employers taking serious and effective measures to protect them. While many conscientious employers engage in such safety practices, others have thrown their employees under the bus, forcing them to risk their health for the companies’ profits—literally profiting off the lives of their workers.

Perhaps the most famous heroic COVID-19 whistleblower is China’s Li Wenliang, a doctor who sounded the alarm about the seriousness of the virus in its early days only to be sanctioned by the Chinese government and later die of the illness. Beyond Dr. Bright, the United States has seen its fair share of whistleblowing as well, especially concerning unsafe working conditions. Holding employers accountable for workplace safety is paramount during the pandemic, given that the workplace is one of the places where the virus is most likely to spread. Whistleblowing employees are necessary to bring employer safety inadequacies to light.

But despite the importance of whistleblowing during these times—or perhaps because of it—the government and private companies have fired employees in retaliation for blowing the whistle. Like the federal government's termination of Dr. Bright, Amazon, one of the most powerful and wealthiest companies in the world, fired several warehouse employees, including Staten Island’s Christian Small, for raising concerns about workplace safety and attempting to organize a response. This prompted former Amazon VP Tim Bray to resign “in dismay” because of the company’s decision to fire whistleblowers. Bray noted in an open letter that the six or so whistleblowers who faced retaliation from Amazon at that time were all people of color, women, or both. At the end of the letter, Bray decried power imbalances in the workplace, writing that “warehouse workers are weak and getting weaker…[s]o they’re gonna get treated like crap….” Amazon has profited during the pandemic.

Other employees throughout the country have similarly faced retaliation for raising workplace safety concerns. An emergency room physician in early hard-hit Washington State, Ming Lin, was fired for giving a newspaper interview about his concern that his employer had inadequate testing and protective equipment. Navy aircraft carrier captain Brett Crozier was fired for writing a letter about the Navy’s failure to provide him with sufficient means to combat the virus (he later contracted it). Nurse Lauri Mazurkiewicz was fired for emailing her colleagues that that N-95 masks were more effective at protecting against the disease’s spread than the masks provided by the hospital where she worked, then wearing an N-95 mask to work—she has since filed a lawsuit.

It is especially wrong for employers to retaliate against whistleblowers, given the historic state of unemployment—jobs are precious and hard to come by for terminated whistleblowers trying to feed their families. Now more than ever, whistleblower protection laws are vital, as work environments have become less safe at employment sites where employees’ health is not taken seriously enough. For instance, meat packing plants, deemed essential by the Trump administration and already dangerous working environments even in the absence of COVID-19, are hotbeds for the virus to spread, leading to public concern and at least one federal lawsuit. Nursing homes, especially those who serve indigent or lower-class senior citizens, have been hit hard. Essential retail stores, such as grocery outlets, have also been seen suddenly dangerous working conditions. 

Employees at workplaces like these are understandably concerned about workplace safety. Consequently, thousands of employees have courageously filed workplace safety complaints against their employers related to the coronavirus. These complaints have involved poor safety practices such as failing to provide personal protective equipment like gloves, masks, disinfectant, and cleaning supplies; failing to follow or implement social distancing requirements; forcing employees to work alongside sick co-workers; and requiring employees to report to work on-site in non-essential sectors. Recently, the CDC revised its guidelines to allow asymptomatic workers to continue working, which may lead to further workplace safety issues as asymptomatic carriers infect their coworkers.

Concerned employees can file workplace safety complaints with the federal Occupational Safety and Health Administration (OSHA), the corresponding California state agency Cal/OSHA, or their local county health departments if the county has a separate health order in place. 

Now, more than ever, we need heroes willing to step forward. One of the only good bits of news in this pandemic has been that heroes are emerging like never before to protect their colleagues, themselves, and their families.  

Do not let the fear of unlawful retaliation stop you from blowing the whistle. If you face workplace retaliation for raising safety concerns, contact Bryan Schwartz Law. 

What happens to workers, workers’ rights, and their advocates in a pandemic?

A look at both old and new laws that will help us protect workers’ rights in the age of COVID-19

(This article was first published in Plaintiff magazine, May 2020 edition)

By Bryan Schwartz and Jinny Kim

Maybe we never expected to be helping clients from our living room recliners, between organizing videoconferences for our kindergartners and answering questions on mobile technology and “what’s for dinner?” from our middle and high schoolers. But, few of us expected a lot of things that are happening now. Though our work lives have been impacted, many of our clients’ lives have been upended far more dramatically. Their challenges keep us fighting, even as new hurdles are placed in our paths.

In this article, we discuss the contours of Pandemic World for plaintiffs’ employment lawyers – how our practices have been affected by COVID-19, and then how our clients’ rights are developing.

Practicing in unpracticed ways

In practicing law, the wise know the precedents – knowing what happened years ago helps us decide what to do now, on this case. Yet, suddenly how we practice law is new for many of us. This must have been what the old guard felt like when Westlaw, Lexis, and other types of online legal research became available and bookcases of yellow books with yellowing pages became more ornamental than fundamental to our law practices.

We have to look forward, rather than looking back – the remote practice of law might become an additional arrow in our quiver, rather than an inconvenience. Could we hire more lawyers and support staff, with less office space and travel costs in the future? For now, everything is Zoom and Hangouts and GoToMeeting and we feel like we are all getting to know each others’ living rooms and pets and kids and sweatshirt collections.

Beyond the obvious differences – that we are all communicating remotely with our colleagues using a host of new technologies – our law practices have been affected by court closures, stalled discovery, defendants becoming insolvent, changes in how we conduct depositions and mediations, frozen hiring of new lawyers and law clerks, and in myriad other ways. The question is how to keep up the pressure on defendants and their counsel – plaintiffs’ attorneys’ number one job – when so many of our usual weapons are holstered.

Keep pressing

Some defendants have had operations overwhelmed by COVID-19 – health care providers, for example – and one can readily sympathize with a need for a time out. Other defendants, however, seem cynically to be commandeering the coronavirus “opportunity” to delay what previously they could not stall. Your blessed motion to compel hearing date would finally be arriving, after 20 meet-and-confers, an informal discovery dispute process, several flimsy supplemental productions by defendant trying to derail your motion, hundreds of pages of briefing and separate statements and attachments and exhibits. And now? Off-calendar, with no court date in sight. Defendant rides hard the newest excuse in the playbook – that the virus is inhibiting its ability to do what it was already avoiding for many months before the virus. What can we do?

Never stop. Call and email every day, cell and office numbers and addresses, maybe twice a day. Keep the guns blazing, secure in the knowledge that all over, plaintiffs’ attorneys are hearing the same thing. While being empathetic to legitimate health and safety concerns, we call foul on this like we do with other nefarious employer practices. If the court is accepting filings (even if it is not processing them speedily), then keep filing. Meanwhile, keep taking new cases – as we discuss below, there are as many (or more) violations now than in pre-Pandemic World.

The good news – cases are settling

Unlike many of our clients whose employers are shuttered and who are laid off indefinitely, we attorneys can do this work remotely with the new technologies.

Top mediators are reporting great success rates at Zoom mediations. Said one, “I have settled every one I’ve done in the past three weeks, many by 3:00 p.m. or 4:00 p.m. Ironically, it seems like people are more invested in getting serious earlier and getting it done as soon as possible; maybe because they have childcare issues at home, smell dinner cooking in the background, want to get to their Covidtini – whatever it is, it seems to be working.”

The lesson: keep scheduling mediations, especially with mediators you know and trust. While it may be harder to develop trust relationships with unknown quantities, you can still get cases settled with your go-to mediators.

Court reporting services have pivoted to remote depositions. Keep scheduling them – especially for witnesses who are not the core wrongdoers. There seems to be no downside to defending plaintiffs and our witnesses remotely (apart from the inability to kick your client under the table). Some defendants will not agree to remote depositions – perhaps soon the courts will require parties to comply with remote depositions, like the courts have recently forced employers’ hands with electronic service (https://newsroom.courts.ca.gov/news/judicial-council-mandates-electronic-service-of-documents-in-most-civil-cases).

The bad news – employers in financial trouble

A typical message some plaintiffs’ lawyers are receiving is this recent one: “I have not been able to discuss this with my client. Moreover, one key issue is that I am unsure about the continued viability of an offer including reinstatement given the [employer’s] developing financial condition. I will follow up as soon as I have some more information.” Another defendant said, “who knows where the employer will be in three months with COVID - they could be out of business.”

While many of us are accustomed to poverty pleas from defendants even in the best of times, now unquestionably these are a common feature of our landscape. Though many businesses are currently avoiding bankruptcy with the government’s massive cash infusion into the economy, soon, we will start to see a wave of failing businesses. Line up your bankruptcy lawyers now because they will be busy later in the year! Many businesses will fail and not have bankruptcy filings, trying to come out on the other side of this pandemic, but many others will try to pull through. Even now, bankruptcy courts are conducting hearings, remotely.

Generally, confusion abounds about which courts are accepting which types of filings, and details on courts’ different Pandemic World approaches are beyond the scope of this article. (In any event, such information would be outdated by the time you read this!) Check each court’s website for this week’s latest updates. Plaintiffs’ attorneys should continue to seek tolling agreements, though certainly with courts closed, it is likely that many exhaustion deadlines are continued. The smart play is – as usual – exhaust and file as early as you can, wherever you can, rather than letting the clock run.

We are all being forced to make some hard decisions. With trial dates far in the distance, and many businesses in treacherous financial waters, the smart play in many cases may be to get the sure money for your client today where you can, instead of holding out for the best-day outcome. Many of our clients need the money, now.

The bad news is far worse for our clients who are out of work and whose rights have been violated, than it is for us. Following are some of the protections and claims we are discussing with them every day.

Sick leave

With the closing of offices, schools and childcare centers around the country, many workers are suddenly juggling work and family obligations – in the home – while focusing on staying healthy and safe. The COVID-19 crisis highlights and supplements the complex and confusing patchwork of programs and laws that protect workers’ jobs and income when they cannot work because they are sick, caring for family members who are sick or caring for children whose schools and childcare centers are now closed.

Existing California law can be used by sick workers, workers who need preventative care relating to COVID-19 or are caring for sick family members, including when public authorities recommend quarantine or self-isolation.

California law requires that all workers have access to at least three paid sick days each year. Local laws provide more paid sick days including for those workers in Berkeley, Emeryville, Los Angeles, Oakland, San Diego, San Francisco and Santa Monica.

Qualified California workers also have access to an existing State Disability Insurance and Paid Family Leave program that allows workers who are unable to work because of their own disability or because they are caring for a family member who has a serious health condition to receive wage replacement benefits. This program is entirely employee funded and provides wage replacement benefits at 60 or 70 percent of a worker’s normal pay.

Many employees can access twelve weeks of job-protected unpaid leave under the Family Medical Leave Act (FMLA)/California Family Rights Act (CFRA) for an employee’s serious health condition, such as COVID-19, or to care for a family member with a serious health condition. To qualify for coverage, an employee must work for an employer with at least 50 employees within 75 miles of their worksite; have worked there for at least one year; and have worked for a minimum of 1,250 hours in the year prior to taking time off. Because of these stringent requirements, 40% of workers – primarily low-wage earners – are not covered.

For employees who do not meet the requirements of the FMLA/CFRA and have a qualifying disability or medical condition, a leave of absence may be a reasonable accommodation under the Americans with Disabilities Act (ADA) or California’s Fair Employment and Housing Act (FEHA).

Families First Coronavirus Response Act

Through the end of the year, employees who work for employers with fewer than 500 employees, are entitled to two weeks (up to 80 hours) of paid sick days paid directly by their employer but reimbursed by the Federal government through the Families First Coronavirus Response Act (FFCRA). These paid sick days are available to current (not furloughed or laid off) employees who have been told to self-isolate, quarantine, or are seeking medical attention because of COVID-19-related symptoms or to employees who are caring for a family member based on these same reasons.

Employees can also use these paid sick days if they cannot work due to caring for a child whose school or place of care has closed down. Employees who use paid sick days to care for themselves will receive full pay of up to $511 per day. Employees who use paid sick days to care for a family member or a child whose school or childcare is unavailable will receive 2/3 of their pay of up to $200 per day.

FFCRA also narrowly expands the FMLA by providing up to an additional 10 weeks of paid leave only for employees who need to take care of children who cannot go to school or daycare. This narrow expansion of the FMLA does not cover employees who actually have COVID-19 or to care for family members who have COVID-19.

Exemptions from FFCRA

Employers with fewer than 50 employees can seek an exemption from the paid sick days provision of the FFCRA if it “would jeopardize the viability of the business as a going concern.” Health care workers (which is very broadly defined) and first responders may also be exempt from both the paid sick days and the expanded FMLA provisions of the FFCRA. The Department of Labor itself estimates that 9 million health care workers, 4.4 million first responders and 96% of firms are exempt from coverage. (https://www.federalregister.gov/documents/2020/04/06/2020-07237/paid-leave-under-the-families-first-coronavirus-response-act#p-187)

Enforcement of the FFCRA will depend on what part of the FFCRA you want to challenge. An employer violating the FFCRA’s paid sick leave requirements is considered to have failed to pay the minimum wage under the Fair Labor Standards Act. An employer who violates the FFCRA’s expanded FMLA provision can be sued under the FMLA itself for failure to provide leave, failure to reinstate, discrimination, or retaliation. However, employees may have no private right of action for the FFCRA’s expanded FMLA provision if the employer was not already subject to the FMLA (e.g., employers with fewer than 50 employees).

While the FFCRA will provide a crucial lifeline for those who qualify, a huge percentage of the workforce will not benefit from the legislation. Therefore, states and municipalities are filling in the gaps. To date, Emeryville, Los Angeles, San Francisco and San Jose have passed their own ordinances to offset the shortcomings of the FFCRA by mandating paid sick time for employees of large corporations (500+ employees). In addition, Governor Newsom recently issued an executive order which provides two weeks of paid time off for isolation, quarantine and other medical directives to California workers in the food industry, including farm and agricultural workers, grocery and fast food workers, and delivery workers.

Layoffs, furloughs and the WARN Act

Due to the coronavirus pandemic, millions of workers across the country are getting laid off, furloughed, or outright terminated.

While most workers in California are considered at-will, some workers have contracts with their employer which set forth termination procedures requiring notice and severance. Employers who fail to fulfill their contractual obligations could face a breach of contract action which would make them liable for lost wages, future wages, and general or special damages.

Employers must pay terminated employees with their final paycheck, accrued vacation pay and required unemployment and COBRA documentation. The failure to do so can subject an employer to waiting-time penalties (under Labor Code section 203), civil and criminal penalties, and attorneys’ fees.

On March 17, 2020, Governor Newsom issued Executive Order N-31-20 which temporarily suspends the 60-day advance notice required under the California Worker Adjustment and Retraining Notification (WARN) Act for a layoff, relocation or termination of 50+ employees, in a 30-day period at a business that employs 75 or more employees. The temporary suspension must be for COVID-19-related “business circumstances that was not reasonably foreseeable at the time that notice would have been required.” Notice is still required but only “as much notice as practicable.” Employers can owe 60 days of backpay and benefits for the period of violation as well as attorneys’ fees for failure to provide adequate notice.

Employers are also on the hook to the state for civil penalties in the amount of $500 per day of delay, as well as attorneys’ fees. Certainly, for any mass layoff, plaintiffs’ attorneys should determine if disparate impact claims can be brought on behalf of a protected class such as older workers or workers with disabilities.

A furlough is different from a layoff – an employer-initiated unpaid leave of absence. Furloughed employees must be paid for all work performed and should not be working (including checking email or voicemail) during the furlough. According to an opinion letter by the Department of Labor Standards Enforcement (the California agency charged with enforcing wage and hour law), a furlough without a definite return to work date within the shorter of 10 days or the employee’s normal pay period may be a termination requiring the payment of final wages. A furlough exceeding a de minimis amount of time could trigger WARN Act obligations. (See Int’l Brotherhood of Boilermakers, et al. v. NASSCO Holdings, Inc. (2017) 17 Cal.App.5th 1105.)

Unemployment insurance — up to $1,050 a week

According to Department of Labor data, nearly 17 million, or one in ten, American workers applied for unemployment insurance between March 15 and April 4. (https://www.dol.gov/ui/data.pdf) This does not include workers affected by the coronavirus pandemic but who may not be eligible for regular unemployment insurance, such as independent contractors and those forced to quit because of lack of childcare.

In California, under the existing unemployment insurance (UI) benefits program, qualified employees can receive between $40 and $450 per week depending on their work history and how much they are able to still earn. To qualify for UI, employees must: be out of work or underemployed through no fault of their own; have enough past wages; and be able, available, and willing to work.

On March 27, Congress passed the $250 billion Coronavirus Aid, Relief and Economic Security (CARES) Act which created three new programs:

(1) Pandemic Unemployment Assistance (PUA) which provides up to 39 weeks of emergency unemployment assistance to workers who do not qualify for regular state unemployment insurance – including self-employed workers, independent contractors, and freelancers – or who have exhausted their state UI benefits; 

(2) Pandemic Unemployment Compensation (PUC) which provides all regular UI and PUA  claimants with an additional $600 payment per week through July 2020; and 

(3) Pandemic Emergency Unemployment Compensation (PEUC) which provides an additional 13 weeks of state UI benefits until December 31, 2020, unless it is otherwise extended.

As expected, California and other states are scrambling to set up the infrastructure

to administer the federal program. The Employment Development Department will accept online applications for PUA beginning April 28. (https://edd.ca.gov/about_edd/coronavirus-2019/pandemic-unemployment-assistance.htm).

Health and safety

As most Americans shelter in place, front-line workers are still providing critical care and support, risking their own health and safety and that of their loved ones. These essential workers include health care employees, grocery and pharmacy employees and employees of shipping companies. Many workers needlessly lost their lives. In order to stop tragedies from endlessly repeating, employers must take appropriate measures to provide employees with safe and healthy work environments. Thousands of employees have filed workplace safety complaints against their employers related to coronavirus, due to lack of Personal Protective Equipment (PPE) (e.g., gloves, masks and cleaning supplies), failure to follow social distancing requirements, and being forced to work alongside sick co-workers.

The CDC’s reversal of guidance for essential workers, allowing asymptomatic workers to continue working, will only expose others to coronavirus and escalate safety violations. (https://www.cdc.gov/coronavirus/2019-ncov/community/critical-workers/implementing-safety-practices.html)

Workers fear not only contagion, but retaliation for raising their concerns with their employers. Employees are being terminated for raising well-founded health and safety concerns to their employers. An employee terminated for exercising their OSHA rights has strong claims for wrongful termination in violation of public policy and Labor Code sections 1102.5 and 6310, in addition to the Labor Code Private Attorneys General Act (PAGA).

COVID-19 and Workers’ Comp

When a worker contracts COVID-19 on the job, they may be eligible for workers’ compensation benefits, including temporary disability payments and medical treatment. Illness due to the common cold or flu is not considered work related for purposes of workers’ compensation benefits, but diseases such as tuberculosis, Hepatitis A, and COVID-19 are considered work related. Employees may bring claims for negligence where a company fails to take reasonable measures to prevent the spread of COVID-19, and possibly a public nuisance claim.

In a memo to its members dated April 13, the Chamber of Commerce stated that “exposure liability” is “the largest area of concern for the overall business community.” (https://www.uschamber.com/coronavirus/implementing-national-return-to-work-plan#liability) The Chamber argues that lawsuits may send businesses and industries into bankruptcy, lobbying for blanket protections against coronavirus-related claims and procedural reforms. (Ibid.)

Instead, we should have legislation providing real protections to critical workers who remain on the job. Until that happens, workers will continue to work without access to PPE, get fired for asserting their rights, and will ultimately put their health, safety, and many lives at risk.

Disability

Employees who work for employers following the guidelines of the Centers for Disease Control (CDC) and local public health authorities are still entitled to worker protections under the ADA and FEHA, including reasonable accommodations, non-discrimination based on disability, and prohibitions against medical examinations and inquiries.

Both the Equal Employment Opportunity Commission (EEOC) and the Department of Fair Employment and Housing (DFEH) have issued coronavirus guidance: “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act” (https://www.eeoc.gov/facts/pandemic_flu.html) and the “DFEH Employment Information on COVID-19.” (https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2020/03/DFEH-Employment-Information-on-COVID-19-FAQ_ENG.pdf) The EEOC has also published technical assistance questions and answers entitled, “What You Should Know about COVID-19 and the ADA, Rehabilitation Act, and other EEO laws.” (https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm) 

The EEOC and DFEH have not yet found COVID-19 to be a disability requiring reasonable 

accommodations.

Both the EEOC and DFEH guidance make clear that medical testing such as temperature checks and asking employees directly about symptoms and diagnoses are allowed. Employers may report diagnosed coronavirus cases to public health officials, while ensuring that medical privacy is maintained.

While some employers have previously been resistant to granting telework as a reasonable accommodation, asserting that physical presence is an “essential job function,” many employers will be hard-pressed in the future to argue that telework as a reasonable accommodation is an “undue burden,” since so many of us are now doing it routinely.

Discrimination claims

The COVID-19 pandemic has reportedly resulted in violent attacks, harassment, and discrimination against Asian-Americans and other people of Asian descent in workplaces across California, and litigation is commencing concerning these actionable claims.

An employer cannot exclude certain subsets of workers based upon protected classifications, due to a concern about COVID-19 transmissions. An employer can be liable for any failure to take reasonable steps to prevent and promptly correct discriminatory and harassing conduct. Discrimination based on association (including marriage or co-habitation) with someone based on race or national origin is also unlawful. (See DFEH FAQ at 2.) 

Workplace discrimination based on marital status is actionable under the FEHA. As one example, an unmarried worker’s request for scheduling accommodations due to childcare was denied while her married counterpart was granted a similar scheduling request.

As plaintiffs’ attorneys, we should also prepare for disparate treatment litigation around other protected categories including marital status, pregnancy, and age. The CDC has identified older people and pregnant workers as vulnerable populations more likely to experience severe symptoms, but employers still cannot discriminate (including terminate, furlough or withdraw a job offer) simply because a worker is pregnant or older.

Conclusion

We are all alternating between anxiety, helplessness, boredom, incredulity, and occasionally, hope. How long will Californians be sheltering in place? Are we flattening the curve of the pandemic? Will our favorite establishments still be around a few months from now? And, perhaps most importantly for our clients – how many of us will be out of work in the coming months? Our job as workers’ rights advocates is to keep up to date with rapidly changing government agency guidelines and Judicial Council updates that affect our clients. They are counting on us to jump every new hurdle as we keep prosecuting their claims.

Bryan Schwartz has an Oakland-based firm representing workers in class, collective, and individual actions in discrimination, wage/hour, whistleblower, and unique federal and public employee claims. He practices in state and federal trial and appeals courts, in arbitration, and before a variety of administrative agencies. He is past Chair of the 8,000+ State Bar Labor and Employment Law Section (now called California Lawyers Association), and on the Board of Directors of Legal Aid at Work, and the Foundation for Advocacy, Inclusion and Resources (FAIR), and is a former Board member of the California Employment Lawyers Association (CELA). He is a regular speaker, moderator, and conference co-chair on employment law issues, and a frequent contributor to Plaintiff magazine and other publications.

Jinny Kim directs the Disability Rights Program at Legal Aid at Work, where she represents clients seeking accommodation and facing discrimination by employers, educational institutions, and public entities. She joined Legal Aid at Work as the Félix Velarde-Muñoz Fellow in 1999-2001 and litigated race, disability, national origin, and gender cases. She returned as a staff attorney in 2008 following work in Washington, D.C., and in private practice. As a Georgetown Women’s Law and Public Policy Fellow, she served as Labor Counsel to the late Sen. Edward Kennedy on the Senate’s Committee for Health, Education, Labor and Pensions. She also has held positions at Asian Pacific Islander Legal Outreach; at Schneider, Wallace, Cottrell, Brayton and Konecky; and at Goldstein, Demchak, Baller, Borgen & Dardarian. Jinny received her J.D. in 1999 from the University of California, Davis, and her B.A. in 1995 from the University of California, Berkeley.

Certified: Thousands of Oracle Women Permitted to Proceed as a Class in a Significant Win for Gender and Pay Discrimination Actions

Last week, the San Mateo County Superior Court in Jewett v. Oracle granted the representative plaintiffs’ motion for class certification, permitting plaintiffs to proceed as representatives of a class of over 4,100 women. The case alleges systematic underpayment of women, in violation of California’s Equal Pay Act (EPA), Labor Code 1197.5 and California’s Unfair Competition Law, Business & Professions Code 17200.

While the ruling does not reach the merits of the allegations, it nevertheless is a crucial victory and an important breakthrough in pay and sex discrimination class action cases. In recent years, plaintiffs have sometimes met resistance in trying to bring class claims of systemic gender-based discrimination. For example, in Huang v. Twitter, the California courts declined to certify a class of approximately 135 software engineers in an action alleging that Twitter’s discretionary promotion policy had a disparate impact on women in violation of California’s Fair Employment and Housing Act. Similarly, in Moussoris v. Microsoft, the federal district and appellate courts declined to certify a class of approximately 8,600 women in technical and engineering roles in an action alleging that Microsoft’s policies and practices had a disparate impact on women with respect to compensation, promotions, and performance evaluations, in violation of Title VII of the Civil Rights Act and Washington state law. In both cases, the courts cited to Wal-Mart v. Dukes in concluding that commonality could not be established because the discrimination that the women faced was a result of an individualized exercise of discretion, so the inquiry was not suitable for a class case. In a sense, the employers were able to avoid liability on a classwide basis by granting decision-makers the type of discretionary authority that perpetuated the very structural, implicit biases that these cases sought to challenge.

In the instant case, plaintiffs’ claims differed in two notable ways. First, the claims were brought under California’s EPA, which is a strict liability statute – meaning there is no requirement to prove intent, discriminatory animus, or motive for the identified pay disparity. Second, plaintiffs contended that much of this pay disparity arose from Oracle’s use of prior salary at jobs before Oracle, an impermissible factor with respect to pay disparity under the statute (see Labor Code 1197.5(a)(1)(D)(4)).¹

In support of their claims, Plaintiffs submitted evidence that Oracle has a detailed, company-wide system of job codes that groups employees by job function, job specialty, job family, and responsibility level. Plaintiffs subsequently elicited Person Most Qualified (PMQ) testimony that individuals within job code share basic skills, knowledge, and abilities, and similar levels of responsibility and impact. Plaintiffs also introduced expert reports establishing that: (1) work within Oracle’s specific job codes were substantially equal with respect to skills, effort, and responsibilities; and (2) that women working in the same job codes as men receive less base pay, fewer bonuses, and lower stock compensation, to a statistically significant degree, such that the discrepancy could not be explained by job definition, tenure at Oracle, tenure in position, job performance, years of job experience, or location of work site.

The Superior Court found that Plaintiffs’ theory of recovery was suitable for class-wide proof because Oracle’s job codes would allow for comparison of salary data between individuals that performed work similar in skill, effort, and responsibility. The Court concluded that Plaintiffs’ evidence supported a finding that Oracle employed a top-down, centralized compensation system that was appropriate for classwide resolution.

Oracle argued that there was sufficient variance within each job code with respect to the specific duties of each employee that a comparison at the job code level was improper. However, the Court concluded that this was inconsistent with Oracle’s own PMQ testimony, and the EPA’s requirement that jobs only share similarities with respect to a composition of skill, effort, and responsibility performed under similar working conditions. Further, at the certification stage, Plaintiffs need only offer a theory that is susceptible to common proof, which they had done here.

Oracle also argued that it was entitled to present individualized evidence with respect to each and every class member to attempt to establish that there was a “bona fide” factor responsible for that woman’s lower pay compared to every man in her job code who is paid more. The Court rejected Oracle’s argument, finding that to be “bona fide” and applied “reasonably,” any job-related factor that Oracle could point to would have to have been applied consistently with respect to employees performing the same work. As the Court explained: “it is not reasonable or consistent with the purposes of the EPA to permit an employer to pick and choose factors inconsistently and idiosyncratically to justify disparate pay decisions for employees performing substantially similar work.” Although Jewett is not directly responsive to the decisions in the Twitter, Microsoft, and Wal-Mart cases, the Jewett order rebuffs the notion that an employer can insulate itself from classwide gender discrimination claims with respect to pay disparity by letting decision-makers operate with unchecked discretion.

Jewett thus marks an important step in bridging the gender pay gap as it provides employees with a simpler mechanism to bring their claims. Specifically, the Jewett order has solidified the California EPA as a pathway forward to challenging systemic gender discrimination in pay on a classwide basis.

If you believe you are being paid less because of your sex, contact Bryan Schwartz Law.

---

1 The 9^th Circuit recently reiterated that reliance on prior pay history does not insulate an employer from liability under the federal EPA, which this firm has blogged about here.^↩

Most Disabled California Workers Should File State, Rather than Federal, Employment Discrimination Claims, after Anthony v. TRAX

The Ninth Circuit Court of Appeals issued a disappointing ruling interpreting the Americans with Disabilities Act (“ADA”) earlier this month. The case is Anthony v. TRAX International Corp. According to that ruling, an employee cannot pursue remedies under the ADA if their employer discovers after its discrimination that the employee lacked the prerequisite qualifications to perform the job. Even though the employer lacks this “after-acquired evidence” at the time it discriminates against the employee—even though the employer actually discriminated against the employee—such evidence can preclude recovery under the ADA, under this precedent. As discussed below, in the wake of this decision, plaintiff-side attorneys should consider bringing disability discrimination actions under California law instead of the ADA, and must investigate the qualifications issue in any case with ADA claims.

The employee in the case, Sunny Anthony, suffered from PTSD and related anxiety and depression. When her condition worsened, she was forced to miss significant time at work. Afterwards, her employer, TRAX, a government contractor with the Department of the Army, warned her that she would be fired if she did not submit a doctor’s note saying that she could return to work without restrictions, even though policies requiring employees to be 100% healthy do not comply with the ADA. When she failed to provide such a note, TRAX fired her. Ms. Anthony would have been eligible for rehire at administrative positions that were open at the time of her termination, but TRAX did not consider transferring or reassigning her, or any other measure, as an accommodation.

Ms. Anthony sued TRAX for disability discrimination and failure to engage in the interactive process regarding disability accommodations under the ADA. During the lawsuit, TRAX learned that Ms. Anthony did not have a bachelor’s degree, a requirement for all workers at Ms. Anthony’s position under TRAX’s contract with the Department of the Army. On this basis, TRAX successfully moved to have the case dismissed.

The Ninth Circuit affirmed the ruling in TRAX’s favor, holding that Ms. Anthony was not “qualified” under the ADA. See 42 U.S.C. § 12112(a). The court relied on EEOC regulation 29 C.F.R. § 1630.2(m) interpreting the ADA to analyze Ms. Anthony’s qualifications. To determine whether an individual is qualified pursuant to this ADA regulation, a court examines whether the individual has the qualifications necessary to perform the position (such as educational or experiential background) and whether the individual could perform the essential duties of the job with or without accommodations.

TRAX did not know about Ms. Anthony’s lack of a bachelor’s degree when it discriminatorily fired her. But despite TRAX’s wrongdoing, the Ninth Circuit held that Ms. Anthony’s lack of a bachelor’s degree completely barred her ADA claim. Because of 29 C.F.R. § 1630.2(m), according to the court, the question of an ADA plaintiff’s qualification is always pertinent, even if it has nothing to do with the alleged wrongdoing. The court suggested that the EEOC could amend this regulation in order to achieve a different result, though amending regulations is no easy task under any administration, and amending regulations to favor employees is even less likely under the current administration.

Ms. Anthony invoked the U.S. Supreme Court decision in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), an age discrimination case, to support her argument that the evidence of her lack of a bachelor’s degree acquired after her termination did not disqualify her from bringing her ADA claim. Bryan Schwartz Law has written about this case and the after-acquired evidence doctrine here, here, and here. McKennon held that, at most, such after-acquired evidence cuts off liability after the employer learns of a legitimate reason for termination. Ms. Anthony argued the same logic was at play in her ADA case.

In disagreeing, the Ninth Circuit argued that the Age Discrimination in Employment Act lacked a “qualified individual” requirement, unlike the ADA. It held that after-acquired evidence can show that a plaintiff is not qualified in an ADA case, even though such evidence cannot be used to support an employer’s purportedly neutral non-discriminatory basis for terminating an employee. The court noted, “An employer’s ignorance cannot create a qualification when there is none.”

Although the Anthony decision represents a setback for disabled employees seeking to enforce their ADA rights, the decision specifically applies to cases brought under the federal ADA, where 29 C.F.R. § 1630.2(m) is in effect, and not California’s Fair Employment and Housing Act (“FEHA”). After-acquired evidence does not provide a complete defense to a FEHA claim, thanks to the California Supreme Court decision in Salas v. Sierra Chemical Co., which followed McKennon and held that due to FEHA’s strong antidiscrimination purpose, “the doctrine[] of after-acquired evidence… [is] not complete defense[] to a worker’s claims under California's FEHA….” Instead, wronged employees are entitled to compensation from the date of the adverse action to the date the employer acquired information about the employee’s ineligibility for work. See Horne v. Dist. Council 16 Int’l Union of Painters & Allied Trades, (2015) 234 Cal. App. 4th 524, 540 (“Salas makes clear that after-acquired evidence is only relevant in the damages phase of a FEHA proceeding.”) Bryan Schwartz Law has written about Salas here.

Because after-acquired evidence cannot disqualify a disabled employee from recovery under FEHA pursuant to current law, practitioners should consider filing under FEHA rather than the ADA if possible. If the ADA is the only option, practitioners considering new cases should investigate the job requirements and the employee’s actual qualifications, without assuming that the fact of employment, no matter how long or exemplary, indicates that the employee was qualified. It is also important to note that Anthony hinged on an interpretation of a regulation specific to the ADA and distinguished McKennon on that ground; other federal discrimination statutes without an analogous regulation are unaffected. Furthermore, Anthony does not allow employers to retroactively come up with job requirements that did not exist at the time the employee was terminated, because a plaintiff must demonstrate that they were “qualified at the time of the adverse employment action, rather than at some earlier or later time.” Anthony Slip Op. at 11.

In addition, the Anthony court did not bolster the “unclean hands” doctrine, another legal defense based on misconduct by the employee. This defense is based on the questionable theory that a defendant should not have to pay for its wrongdoing when the accuser is just as guilty of wrongdoing. “Unclean hands” can constitute a complete defense, but it is unavailable “where a private suit serves important public purposes,” such as to enforce anti-discrimination statutes like the ADA. McKennon, 513 U.S. at 360-361.

If you believe your employer has discriminated against you based on your disability, contact Bryan Schwartz Law. 

In Kim, California Supreme Court Protects Employees' Rights to Bring PAGA Claims

Earlier this month, the Supreme Court of California ruled that an employee does not lose standing to pursue a claim under the Private Attorneys General Act of 2004, California Labor Code § 2698, et seq. (PAGA) where that employee settles and dismisses his or her individual claims. In Kim v. Reins International California, Inc. (full opinion here), the Court rejected the employer’s injury-focused argument that an employee who settles his or her individual claims is no longer a “person aggrieved” for purposes of PAGA. The result is a positive judicial step in the right direction in ensuring that PAGA will continue to be a viable tool that may be used to protect the public interest in enforcement of the State’s labor laws.

The Plaintiff in Kim brought a putative class action claiming that he had been misclassified as exempt from overtime laws. The operative complaint alleged claims for failure to pay wages and overtime (Cal. Labor Code § 1194), failure to provide meal and rest periods (Cal. Labor Code § 226.7), failure to provide accurate time statements (Cal. Labor Code § 226(a)), waiting time penalties (Cal. Labor Code § 203), and unfair competition (Cal. Bus. & Prof. Code § 17200). It also sought civil penalties under PAGA. The employer compelled Plaintiff to arbitration and the PAGA litigation - which could not be compelled to arbitration, under Iskanian v. CLS Transportation Los Angeles (as explained here) - was stayed pending arbitration. While the PAGA action was stayed, the employer made a statutory offer to settle Plaintiff’s individual claims pursuant to Cal. Code Civ. Proc. § 998. Despite the settlement encompassing only Kim's "individual claims" (as discussed in footnote 7 of the Supreme Court opinion), the company sought and the court granted summary adjudication on the PAGA claim, concluding that Plaintiff lacked standing because his rights had been completely redressed by the settlement of his individual claims. The Appellate Court affirmed, leaving the California Supreme Court to weigh in on standing in PAGA cases.

Looking to the statutory language, the Supreme Court concluded that the settlement of individual claims does not strip an individual employee of standing to bring a PAGA claim. First, the plain language of PAGA only requires that a plaintiff be an aggrieved employee – someone “who was employed by the alleged violator” and “against whom one or more of the alleged violations was committed.” In rejecting the employer’s argument that a continuing injury was required to meet this definition, the Court explained that an injury-centric focus was misplaced as PAGA standing is defined in terms of an employer’s violations rather than an employee’s injuries. PAGA does not require an employee to claim any economic injury resulted from a labor violation, only that the labor violation itself occurred. Whereas the employer’s reading would read in requirements not found in the text itself, PAGA’s language only requires that an employee have suffered “one or more of the alleged violations” committed, which permits an employee to serve as a PAGA representative for violations that the employee did not personally experience, as the Court of Appeal in Huff v. Securitas had explained (see our amicus brief here for discussion of Huff).

The Court went on to discuss that injury is not a requirement for civil penalties; damages and civil penalties serve different purposes. In the case of PAGA, the statutory purpose is to remediate present violations and deter future violations as a matter of public interest, not to redress employees injuries. The Court also distinguished PAGA actions from class actions, emphasizing that whereas in a class action the representative only possesses his or her own claim for relief, a PAGA claim is brought on behalf of all affected employees as the state’s designated proxy, as in a qui tam action.

Turning to broader policy considerations, the Court explained that a narrower interpretation of who was an aggrieved employee for purposes of PAGA would have the effect of eliminating employees that settled their claims from the group of individuals eligible to receive a share of the penalties, which in turn would mitigate or potentially completely eliminate the amount of penalties that the state could collect. The Court also reasoned that, in light of plaintiffs' recognized ability to bring stand-alone PAGA claims, standing for a PAGA claim cannot be dependent on the maintenance of an individual claim as PAGA-only cases are not cases in which individual relief has been sought. Further, as there are numerous Labor Code violations that do not have a private right of action (for example, Cal. Labor Code § 558, which we previously discussed here) but can be vindicated in a PAGA action, it would be inconsistent to require a plaintiff to have an unredressed injury to have standing. Finally, the Court rejected as unsupported the employer’s arguments that the legislative history supported its argument or that Plaintiff should be precluded from raising his claim.

Notably, the Court also described Reins's conduct as "troubling." Specifically, Reins explicitly carved out Plaintiff's PAGA claim and made its settlement offer pursuant to California Code of Civil Procedure § 998, which permits defendants to recover defense costs if a jury awards a smaller award to the plaintiff than the defendant previously offered in settlement. The Court opined that "if Reins's prior conduct did not amount to an estoppel, this turnabout was hardly fair play," and observed that reaching a contrary holding would present plaintiffs with a difficult choice: "either reject the offer and risk incurring substantial liability for costs or accept the offer and lose the ability to pursue the PAGA claim."

Ultimately, the Court’s ruling in Kim is an important step in protecting employees’ rights by upholding a system designed to ensure that California’s Labor laws are properly enforced. PAGA remains an important and efficient tool in curbing an employers’ widespread misconduct. If you are seeking to assert wage claims representing your co-workers, contact Bryan Schwartz Law.