The U.S. Equal Employment Opportunity Commission scored a victory last week against PMT Corp., a Minnesota-based medical device and equipment manufacturer. According to the commission’s complaint filed nearly two years ago, PMT Corp. engaged in systematic discriminatory hiring practices by refusing to hire women and individuals over the age of 40 in violation of Title VII and the Age Discrimination in Employment Act. According to Law 360, PMT agreed to settle the suit for $1.02 million payable to a class of applicants and a former PMT Human Resources professional who brought the company’s hiring practices to the EEOC’s attention.
Last week, American Apparel announced that its board had decided to terminate Dov Charney, the company’s founder, CEO, and Chairman, “for cause.” (We’ve discussed the meaning of terminations “for cause” in prior posts here and here.) The board also immediately suspended Charney from his positions with the company. Although the board didn’t initially disclose the reasons for its action, Charney is not new to controversy; in recent years, he has faced allegations of sexual harassment and assault.
The reasons for Charney’s termination have now become public, and they aren’t pretty. In its termination letter, available here, the board accuses Charney of putting the company at significant litigation risk. It complains that he sexually harassed employees and allowed another employee to post false information online about a former employee, which led to a substantial lawsuit. The board also says that Charney misused corporate assets for “personal, non-business reasons,” including making severance payments to protect himself from personal liability. According to the board, Charney’s behavior has harmed the company’s “business reputation,” scaring away potential financing sources.
Sometimes, the things that seem most straightforward and widely understood are the very things people tend to forget – or misunderstand – the most. These things that “go without saying” often actually need to be said.
Take the case of Professor Andrew Ortony of Northwestern University. Professor Ortony – who, up until recently, taught computer science, psychology and education– was recently taught (or reminded) that his retirement agreement – which was written in clear language, fairly bargained-for by both sides, and entered into without any evidence of deception – would be enforced exactly as written, meaning the professor would be considered retired on the day the contract said he would.
Seems straightforward. But because he decided he didn’t want to retire on that day, Professor Ortony tried to get out of the contract, and the Fifth Circuit Court of Appeals held last week – unsurprisingly – that he couldn’t. So, the first straightforward lesson from Professor Ortony’s case is this: if you make an employment agreement with your employer (or, if you’re an employer, and you make an employment agreement with an executive), make sure the agreement is something you want – or at least something you’re willing to live up to.
There’s been another important development in the legal landscape with respect to age discrimination cases, as last week a federal district court in Oklahoma ruled that the EEOC could proceed to trial on behalf of an employee who alleges that she was terminated by her employer for being “old and ugly.” Equal Employment Opportunity Commission v. Kanbar Property Mgmt., LLC, Case No. 12-CV-00422-JED-TLW (Aug. 23, 2013). (Although similar factually, this is a different lawsuit than the “you’re not that pretty” case discussed by our colleague Bill Schreiner last week, which survived a motion to dismiss.)
If you’re not an employment lawyer, this might strike you as the proverbial “dog bites man” headline. After all, if you can't be fired for being old, certainly you can't be fired for being old and ugly, right? Right?
Well, as it turns out, the law isn’t quite so straightforward. Read on….
In the previous part, we looked at Elke Tober-Purze’s lawsuit against her employer, the City of Evanston. The federal court hearing the case ruled in Tober-Purze’s favor on Evanston’s motion to dismiss her claim that it had discriminated against her by paying her male colleagues more and ultimately terminating her from her job as an assistant city attorney.
In the same opinion, the court also denied Evanston’s motion to dismiss Tober-Purze’s claim for age discrimination based on federal law. That law – the Age Discrimination in Employment Act – requires an aggrieved employee to demonstrate that he or she: 1) is over forty; 2) otherwise meets the employer’s expectations; 3) suffered an adverse employment action – such as being terminated or passed over for promotion; and 4) was treated less favorably than others who are not over forty.
The toughest part of this post, for me, is how to categorize this one: does this go in my file of “Things Not To Do At Work?” Or is this one another example of “Lawyers Behaving Badly?” Or maybe “Generally Unacceptable Management Styles?”
Well, I’ll let you decide. But here is the takeaway: however you categorize it, it’s likely a bad idea to tell a woman that works for you that she’s “not that pretty,” that prior female employees were “smart…good-looking…just gorgeous” and used to wear tight sweaters, and that “it’s all been downhill since women got the vote.”
Statements like that can give rise to allegations of gender discrimination in violation of Title VII of the Civil Rights Act that can survive a motion to dismiss. That’s what the City of Evanston, Illinois learned last week, in Elke Tober-Purze v. Evanston, pending in federal court for the Northern District of Illinois.
Here at the SuitsbySuits Tower in Washington, D.C., we’re closing the week of the Snowquester that Wasn’t, a snowstorm that could have given us a large thumping of snow but turned out to be…well, more disappointing than a playoff loss by you-know-who. The chatter about the storm has, though, led to a rare mea culpa by a prominent weather blog and pretty much kicked off the Virginia governor’s race in a dispute over one candidate’s tweet about safety in the snow.
In any event, things other than a poem-inducing non-blizzard happened this week, and here are the highlights:
Our hurricane-proof edition of the latest in Suits by Suits news:
An executive who brings a discrimination claim must jump through a number of hurdles to get to trial. On this blog, we’ve posted on a number of occasions about how under the McDonnell-Douglas test, an executive must prove a prima facie case of discrimination, after which the employer has the opportunity to show that it acted for legitimate, non-discriminatory reasons. If the employer meets this burden, and the executive cannot come forward with evidence to rebut these legitimate reasons, then the court will award summary judgment to the employer before the case even gets to a trial.
The Eleventh Circuit’s recent decision in Ostrow v. GlobeCast Am. Inc., No. 11-16043 (11th Cir. Sep. 17, 2012), provides another example of how an employer can defeat a claim of discrimination by presenting non-discriminatory reasons for its actions.
We cover a broad range of issues that arise in employment disputes. Occasionally, we also spotlight other topics of relevant legal interest, ranging from health care to white-collar defense to sports, just to keep things interesting.
Led by Jason Knott and Andrew Goldfarb, and featuring attorneys with deep knowledge and expertise in their fields, Suits by Suits seeks to engage its readers on these relevant and often complicated topics. Comments and special requests are welcome and invited. Before reading, please view the disclaimer.