2007-26

Employers Must Engage In The Interactive Process For Disabled Employees, Regardless Of Whether Reasonable Accommodations Are Later Found To Exist

 In Wysinger v. Automobile Club of Southern California, the California Court of Appeal (Second Appellate District) delivered a blow to management in its defense against Fair Employment and Housing Act (FEHA) claims brought by disabled employees. The court found that the interactive process and providing reasonable accommodations are separate requirements in disability discrimination claims, and thus constitute separate causes of action with separate burdens of proof.

 Plaintiff Guy Wysinger was a district manager for the Automobile Club of Southern California?s (ACSC) Santa Barbara office. In the late 1990s, ACSC wanted to implement a new compensation plan that the older office managers, including Wysinger, opposed because it would disproportionately affect them. Robert Kane, ACSC?s Vice President of District Office Operations, told Wysinger ?we are going to crush? the opposition. Kane told another manager that ACSC would not tolerate opposition and said, ?It doesn?t matter what you did for this company in the last 30 ? years. None of that matters. And you can die at your desk. We?ll replace you tomorrow. Nobody cares.?

 After Wysinger filed a complaint with the federal Equal Employment Opportunity Commission (EEOC) against ACSC for age discrimination, ACSC did not implement the compensation plan. However, Wysinger complained that his work environment changed thereafter. He was no longer invited onto management committees and was ignored at management meetings. He began receiving unfavorable job evaluations whereas he received favorable evaluations during his prior 25 years at ACSC. Most importantly, he was denied a promotion in another ACSC office that offered a better commute. Wysinger suffered from lupus and rheumatoid arthritis and complained that his commute to the Santa Barbara office exacerbated his arthritis. Wysinger presented evidence that he was better qualified than the candidate that was ultimately selected for the promotion. There was also evidence that Wysinger?s immediate supervisor said, ?I can?t defend it?. I just have to do what I have to do.?

 Wysinger sued ACSC under the FEHA for disability and age discrimination. The jury found that (1) ACSC did not fail to provide reasonable accommodations, (2) ACSC did not discriminate based on disability or age, (3) ACSC retaliated against Wysinger for filing a complaint, and (4) ACSC failed to engage in an interactive process due to his disability. It awarded Wysinger $204,000 in economic damages, $80,000 noneconomic damages, $1 million in punitive damages, and almost $1 million in attorney?s fees.

 The Court of Appeal unanimously upheld the jury?s verdict. It rejected ACSC?s argument that the jury?s finding that ACSC failed to engage in the interactive process was inconsistent with its finding that it did not fail to provide reasonable accommodations. The two are separate causes of action under FEHA and require proof of different facts. If the employer does not engage in the interactive process, it may not know whether reasonable accommodations are possible.

 Second, the court found sufficient evidence to support the jury?s finding of retaliation. The evidence allowed the jury to reasonably infer that the decision-maker knew about Wysinger?s EEOC complaint. Moreover, ACSC?s Vice-President, Kane, played a part in the decision, so his discriminatory motivation could be imputed to ACSC.

 ACSC also argued that the jury instructions needed to state that the ?employment action must be both detrimental and substantial? and have had a ?substantial and material adverse effect? on Wysinger?s employment. The court agreed but reasoned that the instructions, coupled with special instructions advising jurors not to interfere with and to defer to a legitimate exercise of management discretion, excluded trivial or insubstantial employer conduct, and therefore were not prejudicially erroneous.

Class Action Certified In Sex Bias Suit Against Wal-Mart

 In Dukes v. Wal-Mart, Inc., the Ninth Circuit issued a revised opinion that once again affirmed a district court order granting class certification in a lawsuit alleging that Wal-Mart discriminated against female employees in both pay and promotional opportunities in violation of Title VII of the Civil Rights Act of 1964. The proposed class consists of women employed by Wal-Mart in positions ranging from part-time, entry-level hourly employees to salaried managers. The class is estimated to include more than 1.5 million women. Plaintiffs seek injunctive and declaratory relief, backpay, and punitive damages, but not compensatory damages. The district court certified the class pursuant to Federal Rule of Civil Procedure (FRCP) Rule 23.

 In February 2007, the Ninth Circuit published a decision upholding class certification. On December 11, 2007, the court withdrew that opinion, but issued another decision again upholding class certification, on the grounds that the class satisfied FRCP 23(a) requirements of numerosity, commonality, typicality, and adequacy of representation. Wal-Mart did not contest numerosity.

 The court found commonality based on sociological evidence that Wal-Mart?s corporate culture was vulnerable to gender stereotyping, statistical evidence of discrepancies in pay and positions between male and female employees, and anecdotal evidence. Expert sociological evidence is admissible as long as it is properly-analyzed, scientifically reliable, and tends to show that a common question of fact exists (e.g., does Wal-Mart?s corporate policy discriminate against females?). Statistical evidence is also admissible so long as it is probative and based on well-established scientific principles. Anecdotal evidence of discrimination from potential class members was admissible because it raised an inference of a common pattern of discriminatory conduct and was consistent with Plaintiffs? statistical evidence. Likewise, Wal-Mart?s practice of subjective decision-making supported an inference of discrimination because subjective decision-making is a ?ready mechanism for discrimination.?

 Typicality requires a showing that the representatives? claims are sufficiently typical of the class. The Ninth Circuit reasoned that typicality of claims and representation were satisfied by the fact that Plaintiffs and the proposed class were alleging a common practice of discrimination.

 The court quickly dismissed Wal-Mart?s argument that fair and adequate representation was impossible since female in-store managers would be both members of the class and agents of Wal-Mart. The inclusion of supervisory and non-supervisory employees in a single class does not destroy certification.

 The proposed class sought certification under FRCP 23(b)(2). Certification as a (b)(2) class is appropriate where the challenged conduct applies generally to the class and the primary relief sought is declaratory or injunctive. Wal-Mart argued that because the class? claims for monetary relief predominate over claims for injunctive and declaratory relief, certification should be reversed. The court rejected these arguments. A (b)(2) class can include claims for monetary damages as long as they are secondary to the primary request for injunctive or declaratory relief.

 The court granted Wal-Mart?s request to limit the class to those who were employees at the time the complaint was filed because persons who were no longer Wal-Mart employees at the time of filing have no standing to pursue injunctive or declaratory relief.

A Corporation Is Not Liable For Actions of An Out-of-State Corporation Even If They Share A Majority of Shareholders

 In District Council No. 16 v. B & B Glass, the Ninth Circuit held that a union could not hold a corporation liable under a collective bargaining agreement (CBA) for the actions of another entity where the corporation had no control or ownership over the other entity.

 Plaintiff District Council No. 16 of the International Union of Painters and Allied Trades, Glaziers, Architectural Metal and Glass Workers Local 1621 (Local 1621) is located in Northern California. Its counterpart in Texas is Local 53. Local 53 signed a CBA with B&B Glass, Inc., a Texas corporation (BBTX). In contrast, B&B Glass, Inc., an Arizona company (BBAZ), did not employ any unionized employees and never signed any CBAs.

 When BBAZ began a project in Northern California, Local 1621 brought a claim against BBTX and sought arbitration under the CBA. BBTX argued that it had no involvement with BBAZ and should not be liable for BBAZ?s actions. Local 1621 argued that the BBTX should be liable for BBAZ?s work under the CBA because BBTX and BBAZ shared many of same stockholders. BBTX?s stockholders have a 75% interest in BBAZ.

 The court held that BBTX was not liable for the actions of BBAZ because they were separate companies. Importantly, the two did not compete for projects or business. They did not share any resources (i.e., offices, phone numbers, mailing addresses, business licenses, employees, supervisors, etc.) and each has their own operation manager.

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