HERE Report Details Recommendations of National Gambling Impact Investigation

With the growth of gambling as a revenue-generating industry among Native American tribes around the country, labor unions are looking to organize employees at the increasing number of casinos operating on tribal lands.

A report issued in June 1999 by the National Gambling Impact Study Commission calls for collective bargaining rights for employees at casinos on tribal reservations. There remain few instances, however, where employees at casinos owned by Native American tribes in fact have gained representation rights or a union contract.

The commission issued several recommendations related to casinos on tribal lands. Specifically, the commission recommends that "labor organizations, tribal governments, and states should voluntarily work togther to ensure the enforceable right of free association - including the right to organize and bargain collectively - for employees of tribal casinos." The Commission also recommends that Congress "enact legislation establishing such employee rights only if there is not substantially voluntary progress toward such a goal over a reasonable period of time."

One such voluntary agreement between a tribe and a union recently resulted in a first contract for several hundred casino employees in Southern California. In October 1999, service and maintenance employees at a casino operated by the Viejas band of the Kumeyaay Indians near San Diego, California, ratified a contract with the Communications Workers of America. CWA last year negotiated a voluntary election agreement with the Vieja band to permit employees to decide whether or not they wanted union representation since the casino is on sovereign tribal land not covered by the National Labor Relations Act.

Unfortunately, the application of federal labor law to elections on tribal lands is evolving. In his last report before resigning, former NLRB General Counsel Fred Feinstein noted that he would seek a new standard of NLRB jurisdiction in cases involving a casino on tribal land. Previously, the NLRB has refused to assert jurisdiction in such cases. Now however, Feinstein decided to issue a complaint and to argue that the Board should no longer follow prior rulings which exempted Indian tribes as "political subdivisions."

The extension of applicable federal and state law to casinos on tribal lands was addressed by the commission which recommended "that tribal governments, states and, where appropriate, labor organizations should work voluntarily together to extend to employees of tribal casinos the same or equivalent (or superior) protections that are applicable to comparable state or private sector employees through federal and state employment laws. If state employee protections are adopted as the standard for a particular tribal casino, then they should be those of the state in which that tribal casino is located. Further, the Commission recommends that Congress should enact legislation providing such protections only if there is not substantial voluntary progress toward this goal over a reasonable period of time." | Back to top

Affirmative Action Plans Must Have Remedial Purpose

A federal appeals court has ruled that Affirmative action plans illegally discriminate against white job candidates if no proof exists to show that the employer's hiring goals were adopted to remedy a history of discrimination against a protected group. (Schurr v. Resorts International Hotel Inc., 3d Circuit)

Plaintiff Karl Schurr, who is white, was one of five applicants for a job as a light-and-sound technician at Resorts International in Atlantic City where he already worked part-time. Casino management quickly narrowed their choices to two -- Schurr and Ronald Boykin, a African American who also worked for the casino part-time. The casino's director of show operations decided that the two men were equally qualified for the job, and as a result, checked the statistics for minority hiring and found that the casino was slightly behind in meeting its goal of 25-percent minority hiring in the technician job category. The director of show operations testified that he believed the casino was obligated to hire the minority candidate when two applicants are equally qualified and the casino was "underutilizing" minorities in that job category.

New Jersey casinos are regulated by the Casino Control Commission, which requires casinos to take affirmative steps "to ensure that women, minorities and persons with disabilities are recruited and employed at all levels of the operation's work force and treated during employment without regard to their gender, minority status, or disability." Based on census statistics for Atlantic City, the regulations require that in most job categories casinos must aim for hiring a workforce that is 25 percent minority and 46 percent women.

When Schurr learned that he was not chosen for the job, he filed a charge of discrimination with the New Jersey Division of Civil Rights and the U.S. Equal Employment Opportunity Commission. He also named the Casino Control Commission arguing that its affirmative action regulations should be struck down as unconstitutional.

U.S. District Judge Stephen M. Orlosky initially granted summary judgment to all of the defendants, holding that Schurr lacked standing to sue the commission because he failed to show a causal link between the regulations and Resorts' decision not to hire him.

When evaluating the decision not to hire Schurr, Orlosky concluded that "Schurr's damage is fairly traceable only to Resorts' actions in implementing its affirmative action plan and Resorts' actions in administering the plan through its employees.... Schurr's damage is not, however, traceable as far back as the Commission's regulations." Orlosky also found that the regulations did not mandate hiring preferences but merely required casinos to expand the "pool" of applicants by recruiting more minorities and women.

Judge Carol Mansmann, writing for the Third Circuit, disagreed, saying "the regulatory scheme challenged here contemplates something beyond benign methods by which casino licensees may expand the applicant pool."

The regulations were drafted "to prohibit discrimination," Mansmann said, by "encouraging businesses to achieve a balanced representation of employees at all levels of the work force and to ensure that 'affirmative efforts are made to recruit and employ' minorities." If a casino licensee fails to meet the established goal, the licensee is required to document its good faith efforts to hire a qualified female or minority candidate for the position.

But in the end, the court agreed with Orlosky's decision that Schurr lacked standing to sue the commission -- only for different reasons. "In order to have standing to challenge future rather than past application of the regulation, Schurr must allege that the setting of minority employment goals for job categories within the casino industry in the future constitutes an invasion of a legally protected interest which is 'concrete and particularized,' and 'actual or imminent, not conjectural or hypothetical."' Schurr failed to meet that test because there was no evidence of how frequently jobs for which he was qualified become available or how frequently he must compete with women or minorities for those jobs.

However, Schurr fared much better in his claim against Resorts, winning a ruling that grants him a victory on liability and orders the lower court to proceed directly to a calculation of damages. The court held that Resorts' plan was not adopted to remedy a manifest imbalance in traditionally segregated job categories.

Mansmann found that Schurr's claim was similar to a Title VII case, Taxman v. Board of Education of Piscataway, in which an employer conceded that two candidates -- one white and one black -- were equally qualified for a job and that the black candidate was chosen for affirmative action reasons.

The Taxman court held that such a plan violates Title VII where the employer cannot show that it was adopted to address a history of discrimination. Mansmann found no reason not to apply the same logic to Schurr's case and to rule against Resorts since it admitted that its affirmative action plan was not intended to remedy past discrimination. | Back to top

Former Chef May Pursue Race Bias Claim Against Private Club

A federal district court in Virginia has ruled that a private club may choose without restriction whom it wishes to have as a member or an employee. However, once chosen, that individual is protected from unlawful race discrimination under 42 U.S.C. Û1981. (Crawford v. Willow Oaks Country Club, Inc., E.D. Va.)

Plaintiff Lamont Crawford worked as a sous chef for Willow Oaks, where he and other African American kitchen employees were allegedly subjected to racially offensive comments by the Executive Chef, Crawford's immediate supervisor. Crawford also alleged that the country club refused to pay him for overtime he worked, fired him for seeking time off in violation of the Family and Medical Leave Act, and refused to provide him with severance pay.

In addition to his claims of racial harassment and race discrimination under Section 1981, Crawford filed a state law defamation claim against the club's chief executive officer. Willow Oaks moved to dismiss Crawford's complaint, arguing that as a bona fide private membership club, it is exempt from Section 1981.

The court examined the country club's two main arguments: that the private clubs exclusion found in Title VII of the 1964 Civil Rights Act applies to Û 1981 claims, and that the private clubs exclusion in Title II of the 1964 Act applies to Û 1981 claims. The court found that, "Nowhere in the language of Title VII or Title II may one find an expressed or implied instruction by Congress to apply the private club exclusions of these two statutes to Û 1981, a separate and distinct weapon against discrimination."

The court also noted that such a congressional instruction is missing from the Civil Rights Act of 1991, "in which Congress had an opportunity to add a private clubs exclusion to Û 1981 had it so desired." Absent such a directive from Congress, the court declined to "grant private clubs the license to treat their employees in a discriminatory manner, solely on the basis of those clubs private membership. Û 1981 is sound and clear on its face."

Finally, the court rejected the club's argument that under the First Amendment, it was free to associate with whomever it wished without regard to anti-discrimination law. "[E]fforts to exclude private clubs from the reach of federal anti-discrimination laws are premised primarily on respect for those clubs' freedom to associate with whomever they choose. By hiring an employee, a private club has exercised its freedom of association. This freedom is not compromised by thereafter prohibiting that club from discriminating against those with whom it has willingly associated." | Back to top

Court Reduces By More Than Half Front Pay Award to Disabilities Bias Plaintiff

Ruling for the second time on a front pay award in a state law disabilities discrimination case, the Massachusetts Appeals Court affirmed at trial court's reduction of a jury's $600,000 front pay award to $270,000 (Handrahan v. Red Roof Inns Inc., Mass. Ct. App.).

Plaintiff Susan Handrahan started working as a housekeeper for Red Roof Inns in Farmington, Mass., when she was 19 years old. She has epilepsy and had been classifeid as learning disabled. After Handrahan was terminated eight years later, she filed a lawsuit claiming that she was let go because of her disabilities.

Handrahan testified that her housekeeping position was the first and only job she had ever held, that she had planned to work or Red Roof Inns for the rest of her life, and that she experienced emotional distress after she lost the job. Her only work following her termination was a part-time locker room attendant at a local country club, where she earned approximately $3,200 a year.

A Massachusetts state court jury awarded Handrahan $55,000 in back pay, $50,000 or emotional distress, $600,000 in front pay, an $1 million in punitive damages. The judge reduced the punitive award to $900,000, and the front pay award to $487,000 on Red Roof Inns's motion for remittitur. Red Roof Inns appealed the front pay award, and the appeals court agreed it was excessive. The trial judge then reduced the front pay award to $270,000 and both sides appealed again.

The appeals court observed that front pay awards are intended to compensate plaintiffs for the loss of future earnings and benefits. In reducing front pay to $270,000, the trial judge said his objectives were to respect the jury's verdict, act consistently with the evidence at trial, and to comply with the appeals court's remand order.

In recalculating front pay, the trial judge incorporated the assumption - recommended by the appeals court - that Handrahan would obtain other full-time employment sometime in the next 30 years. The trial judge calculated that Handrahan's post-termination wage at the rate of $220 a week for 50 weeks a year over that same 30-year period provided mitigating earnings of $330,000. Subtracting that amount from the original jury award of $6,000 in front pay produced the $270,000 result. | Back to top

Restaurant Owner's Reassignment Request Not Pregnancy Bias

The Tennessee court of appeals ruled that a pizza-restaurant owner did not violate a state law prohibiting pregnancy discrimination by asking a pregnant assistant manger to take on a part-time job temporarily so that another employee could be trained to take over her job during her maternity leave. (Spann v. Abraham d/b/a Sir Pizza, Tenn. Ct. App.)

Plaintiff Christine Spann was an assistant manager at Sir Pizza when she discovered she was pregnant in early 1993. Spann alleged that when she told the owner and his daughter, who was the manager, about her pregnancy, they began treating her more coolly. Spann was not married, and the father of the child was at one point was convicted for assaulting her with a knife, the court said. Despite the alleged attitude shift, Sir Pizza was more flexible about Spann's work hours in order to accommodate her prenatal care, the court pointed out.

In May 1993, when Spann was five months pregnant, she and Sir Pizza's owner discussed how the restaurant could best accommodate the later stages of her pregnancy, the birth of her child, and her anticipated maternity leave. Spann told him that she intended to return to work shortly after the baby was born. He suggested a temporary reassignment until she returned from maternity leave, proposing that she work as backup night delivery driver, and that his son temporarily take over her duties as assistant manager. His rationale for this was that he wished to have a smooth transition. He told Spann that she would be reinstated when she returned from maternity leave and that her income would not be affected.

When Spann rejected the proposal, the owner told her that if she did not accept the temporary transfer, he had no other position for her. However, he reiterated that she could have her assistant manager position back after her maternity leave. Spann quit on May 26, 1993; she sued the following May. Even after Spann sued him, the owner stated that she had been a good employee and that he would be happy to hire her back.

The Pregnancy Discrimination Act, which amended Title VII in 1978, requires employers to treat pregnant workers the same as other employees. An unlawful employment practice under the PDA occurs whenever pregnancy alone is a motivating factor for an adverse job action.

Spann alleged that the owner's daughter's change of attitude after learning of Spann's pregnancy, as well as the owner's comment that Spann should not engage in horseplay with his son or she "might end up miscarrying," were direct evidence of pregnancy discrimination.

The court held that "isolated and ambiguous comments" do not prove an employer's discriminatory intent. "Title VII did not require either [the owner] or his daughter to be enthusiastic or even supportive of Mr. Spann's pregnancy, and thus, their undisguised disapproval, by itself, does not give rise to a cause of action, the court said.

The court also said that the owner's concern about Spann's absences did not give rise to an inference of discrimination because the PDA does not require an employer to overlook a pregnant employee's absence unless it overlooks non-pregnant employees' absences. The court also rejected Spann's argument that the temporary reassignment request was direct or circumstantial evidence of discrimination noting that "Title VII does not require employers to make fair and accurate assessments of their employees' abilities, nor does it require employers to assign employees to appropriate positions."

Spann also maintained that there was indirect evidence of discrimination. To prevail under this theory, Spann would have to show that she was pregnant, that she was qualified for her job, that she was subject to an adverse job action, and that there was a connection between her pregnancy and the adverse job action. The connection could be proved by showing that she was treated differently than similarly situated, non-pregnant employees.

The court noted that Spann was pregnant and qualified for her job. She argued that the temporary position would be a demotion because it was "lower in status" and would make her a "supervised employee" rather than a supervisor. However, the court noted that it "is not altogether apparent how Ms. Spann's temporary reassignment during the later stages of her pregnancy amounts to an adverse employment action," and rejected her claim, pointing out that there was no proof that the employer treated similarly situated non-pregnant employees better. | Back to top

Jury Awards $252,000 to Restaurant Employee Fired After Ending Affair with Supervisor

A federal jury awarded $252,000 to a woman who sued her restaurant employer for unlawful retaliation when she was terminated after breaking off a sexual relationship with her supervisor (Lipphardt v. Durango's Steakhouse of Brandon Inc., M.D. Fla.).

Following a five-day trial in the U.S. District Court for the Middle District of Florida, a jury awarded plaintiff Mary Lipphardt $42,000 in compensatory damages, $10,000 in damages for emotional distress, and $200,000 in punitive damages.

Lipphardt was terminated in December 1996 after breaking off a relationship with an assistant manager at the restaurant. Lipphardt performed a number of managerial duties when the assistant manager was hired in June 1996 and became her supervisor. In September 1996, she moved in with him but left in October after ending the relationship. After this her employment problems began.

The assistant manager constantly attempted to discuss their previous relationship, and would continually question Lipphardt about getting back together. Further, the assistant manager continually paged Lipphardt and left messages on her voice mail when he was intoxicated, according to the court.

Following a confrontation at the restaurant in December 1996, Lipphardt complained of the manager's actions and went on vacation. The day she returned, she was terminated for allegedly trading food to employees of a tanning salon in exchange for tanning services.

At trial, both Lipphardt and salon employees testified that such trades never took place. | Back to top

15-Year-Old Cannot Sue For Sexual Harassment After Being Too "Embarrassed" to Complain

A federal district court in Nevada ruled that a 15-year-old employee of a McDonald's restaurant who was too "embarrassed" and "scared" to complain about her supervisor's sexual harassment, unreasonably failed to take advantage of her employer's anti-harassment policy. (Alberter v. McDonald's Corp., D.Nev.)

Judge Edward C. Reed of the U.S. District Court for the District of Nevada, held that, "While the court recognizes that the plaintiff's age and relative unfamiliarity with the adult workplace (as well as the fact that her harasser was an older man) may have contributed to her reluctance to talk about the problems she faced at work, those factors cannot excuse the plaintiff's failure to bring the problem to the attention of someone at work."

Plaintiff Jamie Alberter worked at a McDonald's in Nevada for six months in 1996. She alleged that her male supervisor harassed her on various occasions. The supervisor allegedly put his hands in her pants and pulled her to him, touched her buttocks, stroked her hair, and made sexual comments to her and other female employees. Alberter quit in November; The supervisor was fired several days later for unrelated reasons by the restaurant's franchisee.

When Alberter's complaints of harassment surfaced later, her father confronted a restaurant manager, who offered Alberter her job back. Alberter declined and filed claims of sex discrimination, sexual harassment, and constructive discharge under Title VII of the 1964 Civil Rights Act. She also alleged sex discrimination and intentional infliction of emotional distress under state law. Alberter named McDonald's Corp. and the franchisee as defendants.

The U.S. Supreme Court has ruled that an employer will not be held vicariously liable for a supervisor's sexual harassment if no tangible employment action has been taken against the plaintiff, the employer exercised reasonable care to prevent and promptly correct the harassment, and the plaintiff unreasonably failed to take advantage of preventive or corrective opportunities or to avoid harm.

Alberter argued that this precedent does not apply when the employer knew or should have known of the harassment. The court disagreed, noting that the knowledge or constructive knowledge of the employer is "irrelevant" under the new standard of vicarious liability for supervisory harassment.

Alberter also contended that the franchisee is vicariously liable because she was constructively discharged - a tangible employment action. The court disagreed, noting that, "constructive discharge is not a 'tangible employment action' because "while constructive discharge may come about as the result of actions taken by a supervisor, it is not an action taken by that supervisor," and may also be the result of co-workers' conduct, he noted.

The court held that Ledbetter can satisfy the first prong of the defense because of the restaurant's anti-harassment policy, which was regularly disseminated to all employees via an employee handbook and a poster. The policy allowed employees to bypass the harassing supervisor and complain directly to any manager, including the franchisee.

As for the second prong of the defense, the court found that Alberter unreasonably failed to take advantage of her employer's complaint procedure. The court noted that although "[d]iscussing inappropriate sexual behavior with managers or employers will cause some degree of discomfort in almost all cases . . . it is, at least in part, the duty of the victim of sexual harassment to take action."

In seeking to hold McDonald's Corp. liable to the harassment, Alberter argued that it may be considered a single employer with the individual franchisee's franchise-holding company. She asserted that McDonald's exercised control over employment decisions at its franchises because the franchise agreement requires franchisees to adhere to the policies set forth in McDonald's business manuals, including the personnel manual.

The court held that evidence of shared personnel policies is an insufficient basis for a single-employer claim. It observed that while the business manuals provided by McDonald's contain personnel policies, the franchisee was not required to abide by those policies as a condition of his franchise agreement, but had the option of adopting McDonald's policies or developing his own, which he did.

Given that McDonald's did not control day-to-day operations at the restaurant and was not involved in any decisions regarding the terms and conditions of employment, it cannot be considered a single employer with the franchisee's company. | Back to top

San Francisco Hotels and HERE Double Pension Benefits and Address Immigration Issues

Members of the Hotel Employees and Restaurant Employees union ratified a new five-year contract providing doubled pension benefits and added new immigration language to the citywide agreement covering about 4,000 employers at 11 downtown San Francisco hotels.

The hotels agreed to increase contributions to the pension plan from $86.33 a month to $123.33 a month for the life of the contract. The pension plan will now pay benefits of $30 per month to each employee per year of service - twice the current benefit.

The Hotels will also notify the union when the Immigration and Naturalization Service questions an employee's work documentation. Deported employees who have their immigration status resolved within one year will get their jobs back with no loss of seniority, while those employees who take longer to resolve their immigration status have an additional year in which they can return to the first available opening.

The contract also provides for a reduction in the number of rooms per day that housekeepers must clean. However, a joint committee will work on devising a way for employees who wish to do more work to get incentive pay.

The contract provides for wage increases of 2.83 percent in the first year, 3.18 percent in the second year, 4.14 percent in the third year, 4.42 percent in the fourth year and 4.33 percent in the fifth year. The increases are backloaded, due to the cost of the pension improvements and the "room drop" agreement. | Back to top

Atlantic City Casinos Retain Subcontracting Right

Members of the Hotel Employees and Restaurant Employees union ratified new five-year contracts covering about 19,000 non-gaming employees. The contracts contain wage and pension increases but not the total ban on employer subcontracting sought by the union. The ratification followed a two-day strike against 9 of the 12 hotels covered by the new contract.

The union sought subcontracting language that would have required subcontractors' employees to be made part of the bargaining unit. Instead, the hotels retained the right to lease space to outside operators that are not required to employ union-represented employees. However the hotels must transfer any employees affected by subcontracting to jobs with the same pay and benefits.

Employees with at least six months of service receive a 35-cent-per-hour wage increase in the first year. In each remaining year, employees with seven or more years of service will receive a 30-cent-per-hour raise; employees with fewer years of experience will receive increases based on a two-tier system not yet agreed upon.

The hotels will substantially increase pension fund contributions from about 19 cents per hour to 47 cents per hour worked and pay 25 cents per hour into a separate pension account to be administered by the local. Hotel health care contributions rise from 80 percent to 90 percent of costs, representing a 10-cent-per-hour increase. | Back to top

Los Angeles HERE Local Agrees To First Contact for Downtown Sports Arena

Negotiators for Hotel Employees and Restaurant Employees Local 11 and Levy Foods have reached agreement on terms of a first contract covering about 500 employees at the Staple Center Arena, the lavish new sports complex in downtown Los Angeles.

The union said that while there are still a couple of outstanding non-economic issues, its negotiating team has approved the basic terms. The four-year agreement will be effective from December 1, 1999 and will run through November 30, 2003. It includes "living contract" language similar to that used in the San Francisco hotel industry, which allows the union and Levy Food to work together to adapt to changes in the new arena's business without having to wait for a new cycle of contract negotiations.

The contract also includes seniority language that will allow Levy Food to initially place the best employee for a given job in that position. That language also determines seniority according to the number of events worked, not the date of hire.

Under the terms of the agreement, new hires will be paid at 12 percent less than the prevailing wage rates spelled out in the contract for the first nine months of service, after which they will receive the prevailing rates. Similarly, Levy Food's contributions to the union's health and welfare and pension funds will increase over time. For the first 16 months of the contract, Levy Food will contribute $1.61 per hour to the health and welfare fund but then will increase that contribution to $2.38 per hour on May 1, 2001 and to $2.70 per hour for the rest of the contract. Effective June 1, 2000, Levy Food will contribute 28¢ per hour to the union's retirement fund but will raise that contribution rate to 35¢ per hour starting December 1, 2002.

Levy Food also agreed to pay $40,000 in the first year of the contract, $75,000 in each of the next two years, and $100,000 in the fourth year of the contract into an incentive pay pool that will be used to "reward employees with additional pay above the base rate for achieving certain defined attendance goals," according to the contract language.

The contract also includes specific rights reserved for the employer, including the right to determine staffing levels for events, the right to move employees from one location to another, and the right to set starting times for all employees depending on the type of game or event.

It also reserves for Levy Food the right to terminate any employee within a 90-day probationary period ". . . if, in its sole discretion, the Employer finds the employee to be an undesirable employee for any reason.

For its part, Levy Food agreed, with certain limited exceptions, not to contract out any work customarily performed by Local 11 members at the new arena.

The contract sets wage rates for dozens of job classifications and provides annual increases for the last three years of the agreement. Cooks at Staple Center, for example, will see their wages for an eight-hour shift rise from $110.24 in the first year, to $113.55 in the second year, $116.96 in the third year, and $120.47 in the last year of the contract. | Back to top

Chicago Caterer Can Proceed with Claim She Was Fired for Seeking Maternity Leave

A federal trial court held that a former catering manager at a Chicago inn can proceed with her claim that the Inn violated the Pregnancy Discrimination Act by firing her after she told her boss that she would take 12 weeks maternity leave. (Newman v. Deer Path Inn, N.D. Ill.)

Plaintiff Michelle Newman was the catering manager at the Deer Path Inn, responsible for booking, planning, and coordinating events. In May 1993, her supervisor, the director of sales and catering, left the Inn. While the director position was open, Newman reported directly to the Inn's general manager and assumed the director's duties. The general manager allegedly told Newman that she would be the next director of sales and catering..

On August 13, 1993, Newman told the staff that she was pregnant. On August 16, the general manager gave Newman a "glowing" annual performance review. She had a stellar work record, no complaints in her personnel file, and received comments such as "her performance is excellent." Sometime in the next week, Newman told the g.m. that she would take 12 weeks off starting in April, when the baby was due. That period would include Easter, one of the Inn's busiest times. Shortly thereafter, the general manager met with Newman on August 24 to discuss alleged performance problems, which included not serving clients, having a bad attitude, and not offering to help another catering manager, who had just been hired on August 18.

Newman had a miscarriage on August 24 and was out of work from August 25 until August 30. On August 31, the general manager again met with Newman to discuss performance issues. On September 8, the recently hired catering manager was promoted to the director position after being employed at the Inn for only three weeks. During a meeting that day, the general manager again addressed Newman's alleged performance deficiencies and told her she had not received the director of sales and catering promotion. They argued, and then Newman left for home. She was fired the next day because of alleged customer complaints about her performance, insubordination toward the general manager and the new director, and for leaving work during work hours without permission.

Newman then filed suit against the Inn, alleging that she was fired because of her pregnancy. The Inn then moved for summary judgment.

Denying summary judgment for the Inn, Judge David H. Coar found that Newman's claim primarily relied upon a "mosaic" of circumstantial evidence. However, the evidence presented a genuine issue of fact as to the defendant's discriminatory intent. The court found that Newman received a glowing performance review after announcing her pregnancy, but pointed out that her troubles began after she announced her maternity leave. The court noted that the general manager's performance complaints against Newman were incomplete, unsigned, and undated. Moreover, the Inn conceded that the documents were added to Newman's file after she was fired. The court also found that the complaints arose only after she announced the proposed leave, which fell during a busy time of year for the inn. Further, the court noted that the general manager's behavior raised an inference that a discriminatory intent motivated Newman's discharge, and that the Inn's "legitimate business reason" for firing Newman was outweighed by evidence of pretext.

The court further noted that the circumstantial evidence also supported Newman's contention that she was passed over for promotion because she was pregnant. The Inn argued that the successful applicant was more qualified for the job. The court said it should not "second guess" an employer's personnel decisions, "however, considering the time of these events, the inadequate documentation of complaints, and the termination of the plaintiff, the court finds that there is a genuine issue of fact as to whether the plaintiff's pregnancy and related conditions were a motivating factor in her discharge."

The court also rejected the Inn's contention that Newman was not a member of a protected class at the time she was fired because she was not pregnant: "A plaintiff can bring a claim under the PDA even though she was no longer pregnant at the time of her termination. . . . The key is whether the plaintiff presents evidence that the employer, upon learning of an employee's pregnancy (or her intent to take maternity leave),set out to treat her worse than other employees or prospective employees."

Newman met her burden of showing that she was treated less favorably than a nonpregnant employee under identical circumstances, the court said, by comparing her situation to the successful applicant's: "Considering that Newman had over two years experience at DPI and was already acting director with stellar reviews, and [the successful applicant] had only been at DPI three weeks when she received the promotion, Newman has produced enough evidence to meet this evidence to meet this element of a prima facie case."

Newman also succeeded in presenting evidence that the Inn's reasons for firing her were pretextual. The general manager was unable to provide documentation to support that his complaints against Newman arose before she was fired. In addition, his evidence of customer complaints was weak and there was little evidence that Newman acted insubordinately towards the new director, who was not appointed Newman's supervisor until one day before Newman was fired. Finally, the court noted that there was no evidence that the Inn had any policy against an employee's leaving the premises during the workday. | Back to top

D.C. Circuit Affirms NLRB Ruling That Resort Illegally Contracted Out Work

The U.S. Court of Appeals for the District of Columbia Circuit held that Reno Hilton Resorts committed unfair labor practices in violation of the National Labor Relations Act by firing its recently unionized security guards and contracting out their work. (Reno Hilton Resorts v. NLRB, D.C. Cir.).

After taking over a hotel-restaurant-casino complex in Reno, Nevada in 1992, Reno Hilton implemented a cost-savings plan but rejected various proposals to contract out security positions. The union began organizing in June 1993 and later that year lost a representation election by a 51-34 vote. The NLRB eventually affirmed an administrative law judge's recommendation to set aside the election because of misconduct by Reno Hilton.

The union began another organizing campaign in 1995. A Reno Hilton labor consultant asked an anti-union security employee to help determine which of his fellow employees supported the union and warned that the resort would contract out security work if the employees approved the union. Managers told security workers that "things would get really rough" if the union came in. The union won the second election by a 44-33 vote in September 1995.

Two weeks after the union was certified as the security employees' exclusive bargaining representative, Reno Hilton officials began to explore contracting out the security work. The director of security told an anti-union security employee that the jobs would be contracted out, with the exception of the 10 or 11 anti-union employees.

During contract negotiations, which began in November 1994, Reno Hilton sought to maintain the right to contract out security work but assured union representatives that the company had no current intention of doing so. However, in February 1996, the director of security reported to the company president that there were two potential contractors that could save the company a considerable amount of money and high-ranking officials pursued the option. The human resources director discussed the possibility of changing job titles to protect anti-union employees.

The security employees went on strike from late-July 1996 to mid-August 1996, when the parties agreed on a contract that froze wages, prohibited discrimination based on union sentiment, and gave Reno Hilton the right to contract out any work. After the union rejected two offers to avoid contracting out the security work in return for pay cuts, the company hired a contractor in January 1997 and fired all the security employees. About 13 employees obtained jobs with the contractor for lower wages.

The court found that substantial evidence supported the National Labor Relations Board's findings that Reno Hilton acted out of anti-union animus and that the resort failed to prove that it would have contracted out security services solely for economic reasons.

Writing for the court, Judge Judith W. Rogers found that "the timing of the decision to contract out is suspect in view of evidence that Reno Hilton knew long before the [International Union of Plant Guard Workers'] certification that contracting out its security work could save a significant amount of money given [the resort's] above-market wages for its security employees.

"[R]easonable inferences of anti-union motivation were virtually compelled by the statements of Reno Hilton officials during the Union campaign to the effect that the hotel would strongly consider contracting out security jobs if the Union prevailed in the election." Rogers wrote. The appeals court enforced the NLRB's order that Reno Hilton reinstate the security employees with back pay an benefits and rescind its agreement with a contractor.

An employer violates Section 8(a)(3) of the NLRA by taking adverse action against employees for protected union activity. In response to the Hotel's argument that an employer's exercise of a contractual right to subcontract did not constitute a Û8(a)(3) violation, the court noted "the general principle that a party cannot exercise its contractual rights in violation of the law." The court found no evidence that the union waives its Section 8(a)(3) rights by entering into the bargaining contract with Reno Hilton.

The company also argued that the board lacked substantial evidence of anti-union animus to support its findings of illegal conduct. Rogers found "suspect" the timing of Reno Hilton's move to contract out the security work. The company knew long before the union's certification that contracting out the work would save a lot of money, yet "[t]he contracting out decision came on the heels of heavy union activity, most notably following the strike preceding negotiation of the collective bargaining agreement."

The court also found substantial evidence of anti-union motivation in statements by company officials threatening to contact out security work if the union won the election. "Particularly compelling is the evidence of comments by [the] security director . . . to [an anti-union security employee] regarding his post-unionization efforts to contract out the security work while preserving the jobs of the anti-union employees." Although the director of security was ultimately unable to protect the anti-union employees, "the various statements by hotel officials strongly support the inference that the security employee's union activity was a substantial and motivating factor in Reno Hilton's decision to contract out its security work."

Rogers rejected the company's contention that the board failed to consider its offers to refrain from subcontracting in return for wage concessions. In a different case such evidence might rebut evidence of anti-union animus, "here, however, there was evidence that Reno Hilton was engaged in a pervasive, continuing effort to undermine union organizing efforts prior to certification and afterwards, when it limited the Union's knowledge of the contracting out plans and frustrated the Union's efforts by offering an unreasonable . . . wage rate, which not only was below the prevailing wage rate in the area, but represented a severe wage cut for most Reno Hilton security employees."

The court believed that the Board correctly found unproven the company's contention that it was solely motivated by lawful economic considerations. "[T]he persuasive force of Reno Hilton's evidence that falling revenues and profits in 1996 were the impetus for the contracting out decision is severely weakened by the evidence that it proposed contracting out two weeks after the Union's certification," despite its representations to the union that the company had no plans to contract out the security work. There was no evidence indicating when the company became aware of falling revenues and no testimony from any company decision-maker linking falling revenues to the decision to contract out the security work. | Back to top

HERE Places Chicago Local in Trusteeship

Local 1of the Hotel Employees and Restaurant Employees union is now under the control of a trustee who will oversee the operations of the local, which has been accused of cronyism and financial mismanagement by the U.S. Department of Justice. Local 1 is the home base of the union's powerful and legendary Hanley family.

The officers and executive board of Chicago-based Local 1 requested a "voluntary trusteeship" that became effective November 29, according to John Wilhelm, general president of HERE. Wilhelm said the trusteeship for Local 1 was developed to assist with internal financial problems and to provide organizing assistance, but stressed that the international union did not act in response to allegations of corruption. "There are no allegations of corruption, malfeasance or wrongdoing," Wilhelm stated, "This is a matter of expenses exceeding income and they needed help with this issue."

Wilhelm said organizing assistance would also be provided because of broad developments in Chicago, noting that hotels accommodating more than 8,000 rooms are being constructed or developed in Chicago - a level of expansion witnessed in very few HERE locals. Without organizing support from the international, Wilhelm said, Local 1 would have trouble maintaining wages and benefits or all hotel employees in Chicago.

But sources familiar with the history of problems within HERE and Local 1 in particular reacted to the trusteeship with skepticism and suggested Wilhelm may have a broader agenda. They also criticized Wilhelm for waiting so long to act.

Irregularities involving Local 1 in part resulted in the forced resignation of Edward Hanley, who had led the union as general president for 25 years. His son Thomas Hanley, the international union's director of organization and the president of Local 1, was removed from office and suspended for one year from the union in August 1998 to settle charges of embezzlement and misuse of union funds.

Observers also pointed to the September 1998 report of court-appointed monitor Kurt Muellenberg, who was empowered to root out corrupt practices within HERE under a 1995 consent decree between the Department of Justice and the union. Muellenberg's report pointed to several examples of cronyism, corruption, and mismanagement. Among other things it pointed to:

direct assistance to the local of $2.6 million as of February 1997 - an exorbitant amount given the local's size and the fact that relative labor peace existed in Chicago;

a $31,000 annual salary paid to Edward Hanley for doing little or no work;

loans from the international union that were never repaid, including a $304,000 loan in 1984 and a $440,000 loan in 1990;

chronic delinquencies in payments of administrative expenses and payments of per capita dues to the international union;

a 22-month financial delinquency owed to the pension plan;

and, the complete lack of annual audits by a certified public accounting firm for at least six years.

Muellenberg blamed the "never-ending Local 1 problem" on the fact that it was the home base of the Hanley family. With the installation of Wilhelm as HERE general president in August 1998, Muellenberg wrote, "hopefully the new national leadership will give the HERE the national and international attention it deserves. Local 1 should have been placed in trusteeship many years ago."

Based on the findings in the report, a Department of Labor source, who has been monitoring the international union for several years, expressed frustration with Wilhelm's 14 months of inaction. "They've had financial problems for years and he [Wilhelm] knew about them," the Labor Department official said. "Why didn't he do this last year when the monitor's report came out? There is a lot about this that doesn't make sense." | Back to top

Refusal to Hire Male Massage Therapist Is Sex Bias Under Title VII

A federal district court in Arizona has found that Marriott International Inc. is liable for sex discrimination under Title VII of the 1964 Civil Rights Act for refusing to hire a male massage therapist because of his sex. (Olsen v. Marriott Int'l Inc., D. Ariz.)

Granting summary judgment on liability to Ralph Olsen, the U.S. District Court for the District of Arizona decided that Marriott failed to prove its defense that being female was a bona fide occupational qualification for a certain percentage of massage therapist jobs at the company's Camelback Inn Spa in Scottsdale, Arizona.

Title VII contains a narrow exception to its general prohibition on sex discrimination for circumstances in which sex "is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise." The employer has the burden of proving a BFOQ defense.

Judge Roslyn O. Silver found that although Marriott claimed a BFOQ based on is customers' privacy interests, the company's argument was really based on customer preference, which courts have consistently rejected as a basis for a BFOQ. She found no evidence that privacy concerns were the actual reason that the spa's customers chose female massage therapists far more often than males.

Courts have found a particular sex to be a BFOQ in situations where "a customer's or client's bodily privacy interests might otherwise be compromised," Silver found. She explained that in privacy-based cases the inquiry is whether performance of the tasks central to the employer's mission intrudes upon the privacy rights of third parties of the opposite sex - such as patients, inmates or clients.

The court found, however, that Marriott did not actually argue for a BFOQ based on privacy. "Marriott does not argue that each client should be provided with a massage therapist of the same sex as the client due to the intrusion upon clients' privacy interests. Rather, it argues that each client should be allowed to choose the sex of their massage therapist due to the intrusion upon clients' privacy interests." The company allows customers to select a therapist of the opposite sex and encourages female clients to consider male therapists if no female is available, Silver found. "Thus, the [company] agues for a BFOQ based on customer preference rather than privacy," she said.

Silver emphasized that she did "not disregard or trivialize the Marriott's emphasis on the importance of customer preference to its success in the massage business." She pointed out that "a sex-neutral hiring policy does not necessarily preclude honoring an one client's request for a therapist of one gender or another."

Even if a BFOQ would be recognized for customer preference based on privacy, the Marriott has to offered evidence to create a genuine issue of material fact with respect to whether privacy interests are the reason its clients choose female massage therapists far more often than males, Silver wrote.

Assuming that some customer's preference is based on privacy concerns, Silver decided that Marriott still did not establish the necessity for a BFOQ. Although massage at the Marriott spa "involves touching and manipulation of intimate areas such as abdominals and inner thighs," it does not include viewing or touching women's breasts or anyone's genitalia, the court said. Silver noted that clients are covered by sheets and towels, therapists only reveal one part of the body at a time, clients may wear underwear, and they can instruct the therapist not to massage certain areas. A genuine issue of material fact remains as to whether message involves intrusion into bodily privacy, the court said.

In any event, Marriott failed to show that there are no reasonable alternatives to sex-based hiring, the court said. Plaintiff Olsen argued that spa personnel should stop asking customers their gender preference for a therapist and instead provide a brief description of the various therapists' qualifications. "More information about the process, along with a reduced focus on gender and an increased focus on qualifications, may alter the extent to which clients of both sexes are willing to engage the services of a male, leaving, at most, a subset of clients with particularized privacy concerns, perhaps including sexual abuse survivors," the court said. | Back to top

Riverboat Casino Settles Class Action Suit Filed by African American Table Game Employees

A federal judge has approved a settlement agreement of a race discrimination class action filed by a dozen current and former African American table game employees against a riverboat casino operation in St. Charles, Missouri. (Anderson v. St. Charles Riverfront Station Inc., E.D. Mo.).

The plaintiffs had originally filed suit in St. Louis in September 1997 against St. Charles Riverfront Station Inc., alleging race discrimination in hiring, promotions, and other conditions of employment. They received right-to-sue notices from both the Equal Employment Opportunity Commission and the Missouri Commission on Human Rights.

The settlement involves the plaintiffs and a class of approximately 60 African American employees who either are or were employed by the company, as well as black applicants who were denied jobs.

The company denies it engaged in any wrongdoing, and settled the lawsuit to avoid spending more time, money and other resources on the matter.

The complaint alleged that each of the plaintiffs "has been discriminated against by reason of their race, African-American, and their color, black, by the defendant who has denied them opportunities for employment, advancement, promotion and has used disparate and harassing disciplinary actions including reprimands, work assignments and discharge, against the plaintiffs and members of the class, which actions defendant has used as a pretext to mask their discriminatory practices." It also alleged that black employees had been the target of "racial comments and racial jokes . . . made by supervisory and management personnel."

The Casino also agreed to changes in affirmative action plan testing. The Casino had been using U.S. Census figures for St. Charles County, Missouri, which at last count had a black population of about 2 percent, as the basis for its affirmative action program. Instead, the Casino agreed to use the figures for the larger metropolitan area, St. Louis, as its test figures. The black population in the St. Louis metropolitan area is nearly 18 percent.

Finally, the Casino also agreed to give some preference in hiring to eligible class members and to remove references to adverse actions taken against black employees from their personnel files.| Back to top

Casino Employee Seeking Day Shift Can Proceed With ADA Claim

A federal judge in Puerto Rico ruled October 25 that a casino employee who sought an accommodation of day work because of the side effects brought on by his prescription mediation can proceed to trial on his claim under the Americans with Disabilities Act. (Santiago Vera v. Williams Hospitality Group, Inc., D. P.R.)

Although Condado Plaza Hotel and Casino argued it discharged plaintiff Ricardo Santiago Vera because of his poor attendance, the court found a question as to whether the employer met its reasonable accommodation duty under the ADA. Santiago Vera, whose medication made him drowsy and could only by taken at night, provided evidence that he could perform his job with accommodation, according to Judge Jaime Pieras Jr.

Santiago Vera began working at the casino as a slot cashier in November 1994. Six months later, he was promoted to slot supervisor. Over the next few months, he faced a series of personal traumas - separating from his wife, who had attempted suicide, seeking psychiatric help, and eventually, in October 1995, being hospitalized after expressing his own suicidal thoughts as well as "homicidal ideas" toward his wife.

Following 10 days of hospitalization, Santiago Vera received a medical certificate from his psychiatrist releasing him to return to work, but recommending an additional two weeks of rest. The certificate also stated that Santiago Vera was taking medication, which made him drowsy and had to be taken at night, and requested his assignment to a day shift.

When Santiago Vera called his supervisor in mid-November about the requested accommodation, he was told that he did not have enough seniority for a day shift job. He returned to the night shift, but left early and was absent the next two days because of illness. A few days later, he was discharged for excessive absenteeism. The hospital identified 41 days that he was "out" in the preceding year, including his off days, vacation days, and days of hospitalization.

Santiago Vera sued his employer under the ADA; the casino moved for summary judgment, arguing that Santiago Vera's erratic attendance warranted the discharge and made him unable to perform his job.

Denying the employer's motion, the court found that Santiago Vera presented enough evidence for his case to go to trial. The court rejected the employer's argument that Santiago Vera was not a qualified individual under the ADA because of his record of absenteeism. The absences were "substantial," the court said, but not as excessive as the employer suggested, since the 41 days also included vacation and days off. The longest period of absence, following Santiago Vera's mid-October hospitalization was uninterrupted, the court said, indicating that his pattern of absenteeism was not "unpredictable or intermittent."

The court also determined that the question of reasonable accommodation - and whether it constituted an undue hardship for the casino - should go to trial. Although the casino said employees with more seniority would have complained about the reassignment the court found that "the extent of such complaints is far from established."

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