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11 Employment Practices Exposures Solutions Insurance Bernd G. Heinze, Esq. AAMGA Executive Director UFO Annual Meeting Whistler, British Columbia September 5, 2008

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22 I.A.-F. Evolution of Non- Discrimination Laws Federal Laws 1.Civil Rights Act 1964 (a/k/a Title VII) 2.EPA 1963 3.ADEA 1967 4.ADA 1990 5.USERRA Common Law Claims 1.Defamation-Libel- Slander 2.Contractual Interference 3.Invasion of Privacy 4.Negligent Hiring- Supervision-Retention 5.Emotional Distress/P&S 6.Economic Advantage 7.Loss of Consortium 8.Inability to Power Walk {State Specific Law Applies}

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33 Fair Labor Standards Act (FLSA) Minimum wage Overtime Child labor standards Federal statutes => state laws

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44 ISO EPLI Insuring Agreement Sums insured legally obligated to pay resulting from an injury. Claims made trigger of claim received and recorded with notification in writing to company as soon as practical. Requires prompt notice of incident which might result in a claim if insured has knowledge. [Not a notice of claim]

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55 What Is Injury Per Contract? Demotion, failure to promote, negative evaluation, reassignment or discipline of current employee or wrongful refusal to employ. Wrongful termination Law/public policy or violation of contract, other than contract stipulating financial considerations if such action on consideration is the result of a breach of contract. Wrongful denial of training, career opportunity or breach of contract. [Continued]

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66 Injury Defined Continued Negligent hiring/supervision resulting in any of the other offenses listed in definition. Retaliatory action. Coercing employee to commit unlawful act or omission. Work-related harassment. Employment-related libel, slander, invasion of privacy, defamation or humiliation. Other work-related verbal physical, mental or emotional abuse arising out of discrimination.

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77 II. A. The Regulatory Maze Law Congress Federal Courts State Courts Guidelines Executive Branch EEOC Labor Department

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88 B.1. General Remedies 1.Title VII and Americans With Disabilities a. Injunctive order for promotion, promotion quotas and hiring b. Backpay c. Attorneys Fees d. Compensatory/Punitive damages between $50,000 and $300,000 for intentional discrimination

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9 WHERE DID THE LITIGATION EXPLOSION COME FROM ? CHANGING WORKFORCE UNION TO EMPLOYMENT AT WILL THE JURY TRIAL ITS ALL ABOUT THE BENJAMINS HIGH PROFILE CASES EMPLOYEE AWARENESS OF RIGHTS & CLASS ACTION LAWSUITS

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10 PROTECTED CLASSES UNDER TITLE VII HARASSMENT FROM: Race Color Religion Sex National Origin Age Chewing Gum Debacle

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11 B.2. Equal Pay Act Equal Pay for Equal Work Act of 1963 a. Back Pay b. Liquidated Damages Equal to Back Pay c. No Compensatory or Punitive Damages

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12 C. Benchmark Developments 1.a. Burden of Proof Plaintiff must go beyond proving an employers stated legal reason for its actions were a pretext for discrimination and must prove that bias was the motivating factor. St. Marys Honor Center v. Hicks, (1993)

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13 Pretext Bias Cases Employee must establish a prima facie case of discrimination The burden then shifts to the employer to proffer a legitimate, non-discriminatory reason for the adverse employment decision If employer meets the burden, the employee must prove illegal pretext

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14 C.1.b.. Mixed-Motive Bias Cases U.S. Supreme Court in 2003 established a two step process: (Desert Palace, Inc. v. Costa) 1.Employee must prove impermissible motive played motivating role in adverse employment decision 2.Employer must then counter that action would have been taken in spite of the employees protected status.

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15 C.2. Defense: Employee Misconduct McKennon v. Nashville Banner Pub. Co. U.S. Supreme Court (1995) Prior wrongdoing by employee does not necessarily shield an employer that has violated law. Court ruled that such conduct does not have to be disregarded and if proved the employee may receive limited damages. (Back pay)

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16 C.3. Reverse Discrimination Murray v. Thistledown Racing Club-1985 Harding v. Gray-1993 Requires direct evidence or intentional discrimination Carry burden that employer is the unusual employer that discriminates against the majority

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17 C.4. Individual Liability Under Title VII Johnson v. University Surgical 1994 a. Title VII defines employee to include any agent of employment b. Individual liability of a supervisor is based on issue of authority over an employee c. Split Federal Decisions

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18 What Constitutes A Supervisor? Mack v. Otis Elevator Co.April, 2003 2 nd U.S. Circuit Court of Appeals ruling: Special dominance over others at a work site is controlling factor 7 th U.S. Circuit Court of Appeals ruling: Concisely defined as anyone with authority to hire, fire, demote, promote or discipline an employee

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19 III. Five Basic Unlawful Discrimination Theories A.Disparate Treatment B.Disparate Impact C.Stereotype Class Assumptions D.Failure To Accommodate Religion Or Disability E.Retaliation

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20 Winning & Losing 48% of Plaintiffs Win Average Defense Cost - $107,000 Win or Loss!

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21 Winning & Losing Folks, this is your Captain speaking. Please dont worry, the pumps are working perfectly, return to your staterooms and await further instructions.

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22 Disparate Treatment Direct or Indirect Evidence Four Point Test 1.Member of Protected Class 2.Qualified Employee/Applicant 3.Adverse Effect on Employee or Applicant 4.Other Qualified, Non Protected Not Adversely Affected by Action

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23 Disparate Impact Applies Even in the Absence of Intent Federal Courts Three Point Test: 1.Practice that discriminates on basis of race, color, religion, sex, origin 2.Plaintiff must show adverse effect falls more heavily on protected class 3.Plaintiff must show practice caused a disparity (Real harm)

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24 IV. Scope of Regulation-ADEA Ground Rules 1. Employees 40+ 2. Employee 20 + 3. Disparate Treatment: Requires proof of intent ADEA Covers Disparate Impact & Treatment 4. Disparate Impact not recognized in ADEA 5. Willful Violation Doubles Damages / What is Knowing or Reckless Disregard? Case Law Rulings Employer must prove a training program about age discrimination exists to avoid willful violation (2001) Mixed motive may apply (2000)

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25 Disparate Impact Claims.. Smith v. Jackson, MS. 2005 WL 711605 (2005) The U.S. Supreme Court noted that, to state a disparate impact claim, an employee must isolate and identify the specific employment practice responsible for the age-based disparate impact. Recognizes the reasonable factors other than age provision when action is attributable to a non-age factor that was reasonable from a business perspective.

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26 B. Sex Discrimination Title VII 1.Pregnancy Related Issues 2.Paramours Advantage 3.Inadequate Mentoring or Training 4.Sexual Harassment Opposite Gender Original Intent Same Gender Expanded Reality Split by Districts

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27 SEXUAL HARASSMENT What is it? Unwelcome sexual advances Requests for sexual favors Verbal or physical conduct of a sexual nature Incidental and unintentional exposure of sexual or explicit materials, e-mails, photographs, etc.

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28 SEXUAL HARASSMENT Inappropriate Behavior Looks Like: Sexually harassing behavior Leer Grope Off color joke, banter Taunt, tease, flirting Dare Reckless conduct Targeting Would you do this to your Mother?

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29 SEXUAL HARASSMENT Under what circumstances? When submission to such conduct is made either explicitly a term or condition of an individuals continued employment (quid pro quo) Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual Such conduct has the purpose or effect of unreasonably interfering with an individuals work performance or creates an intimidating, hostile or offensive work environment

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30 More Lawsuits on the Horizon

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31 WHO CAN BRING A COMPLAINT? FEDERAL LAW Employees Applicants for employment Those not promoted or given a raise Those who are laid off, subjected to consolidation or reduction in force Reference checks/Recommendations

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32 WHO CAN BE SUED FOR DISCRIMINATION? FEDERAL LAW EMPLOYERS with 15 or more employees LABOR ORGANIZATIONS EMPLOYMENT AGENCIES VENDORS SUPERVISORS & MANAGERS STATE LAW EMPLOYERS (no minimum number of employees) LABOR ORGINZATIONS EMPLOYMENT AGENCIES INDIVIDUALS WHO AID AND ABET

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33 MOST LIKELY DEFENDANTS BANKS INSURANCE AGENCIES AEROSPACE INDUSTRY MUNICIPAL ENTITIES SCHOOLS

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34 FROM WHAT ACTIVITIES? HIRING TESTING TRAINING ON THE JOB ACTIVITIES SUPERVISION, EVALUATIONS, PROMOTIONS DISMISSAL OR TERMINATION

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35 WHEN ARE YOU MOST LIKELY TO HAVE A PROBLEM? DISMISSAL OR TERMINATION HIRING ON THE JOB ACTIVITY

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36 WHY DO PLAITNIFF ATTORNEYS LIKE THESE CASES? MOST PLEADINGS ARE ALREADY TEMPLATES AND ARE AVAILABLE ON-LINE PUBLICITY REPRESENTING THE SMALL CLAIMANT AGAINST THE BIG CORPORATION TITLE VII ALLOWS AN AWARD OF ATTORNEY FEES IF SUCCESSFUL

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37 WHY BRING A COMPLAINT? THREE SIMPLE LETTERS: S E X

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38 WHERE IS THE COMPLAINT BROUGHT? FEDERAL LAW MUST EXHAUST ADMINISTRATIVE REMEDIES COMPLAINT MUST BE FILED WITH THE EEOC WITHIN 180/300 DAYS MUST OBTAIN RIGHT TO SUE LETTER ACTION FILED IN FEDERAL COURT COMPLAINT CAN INCLUDE STATE LAW CLAIMS OR OTHER RIGHTS TO RECOVERY DEFAMATION; LOSS OF CONSORTIUM; BREACH OF CONTRACT;

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39 PROVING SEXUAL DISCRIMINATION UNDER STATE AND FEDERAL LAW TYPES OF DISCRIMINATION Hostile Environment Explicit or implicit physical contact or conduct as a term or condition of employment Comments, slurs or innuendos

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40 HOW DOES THE PLAINTIFF PROVE IT? Must establish sexual harassment and its prima facie case by a preponderance of the credible evidence Claim (negligence/breach of contract/common law & derivative) Damages (compensatory/punitive/equitable/attorney fees) Employer must then show a legitimate non- discriminatory basis for the conduct or treatment Plaintiff then has the chance to prove by a preponderance of the evidence that legitimate reasons offered by the employer or actor were a pretext to cover a discriminatory motive

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41 PRIMA FACIE CASE OF HOSTILE WORKPLACE HARASSMENT TITLE VII 1.Discrimination was pervasive and regular; 2.Discrimination detrimentally affected employee; 3.Employee suffered intentional discrimination because of his or her sex; 4.Discrimination would detrimentally affect reasonable person of same sex in that position; and 5.Existence of respondeat superior liability

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