» Employment Law

Texas appellate court rejects employee’s claim of age discrimination, affirming arbitrator’s award in favor of employer

On July 30, 2019, the Texas Court of Appeals for the Eighth District issued a written opinion in a Texas employment discrimination lawsuit discussing whether an arbitrator correctly determined that the employee’s claim was not filed on time. The case is important for Texas employees and employers because it illustrates the need to act in a timely manner, and the deference that courts give to arbitrators’ decisions.

According to the court’s opinion, the plaintiff was hired as a trainer for Xerox in 2009. In 2016, the plaintiff was laid off. The plaintiff filed an age discrimination claim against Xerox, claiming that younger trainers with less seniority were not laid off. He also claimed that, during his tenure with the company, younger workers were given pay raises, while he was not.

The plaintiff initially filed a claim with the Equal Employment Opportunity Commission (EEOC) and the Texas Workforce Commission. On November 3, 2016, the EEOC provided the plaintiff with a right to sue letter, and the next day, the plaintiff filed a lawsuit. Xerox responded by seeking to compel arbitration of the claim under the company’s “Dispute Resolution Procedure,” (DRP) which required all claims that were not informally resolved to be handled through arbitration.

First, the parties argued over whether the plaintiff was required to arbitrate his claim. However, on May 5, 2017, the plaintiff withdrew his case and submitted his claim to an arbitrator of his choice. Xerox, however, objected to the plaintiff’s choice of arbitrator, arguing that the DRP specified the arbitrators that must hear claims against the company. Finally, on August 16, 2017, the plaintiff submitted his case to one of the arbitrators in the DRP.

The DRP provided that a plaintiff who files a claim for arbitration must bring a claim “within the time allowed by applicable law.” If a plaintiff files a case in court rather than proceeding directly to arbitration, the plaintiff must file within “ninety days after the date a party is ordered by the court to arbitration … or ninety days after the date the parties agree to submit the dispute to arbitration under the DRP.” Additionally, under the Texas Labor Code, the plaintiff had to file his claim within 60 days of receiving the right to sue letter from the EEOC.

Xerox claimed that the plaintiff filed his claim too late. The plaintiff argued that he filed his initial complaint with his chosen arbitrator within 60 days of receiving the right to sue letter. However, Xerox argued that by withdrawing his case, the plaintiff “wiped the slate clean” because there was no longer an active case to base the 60-day time period. Additionally, there was never a court order or agreement to arbitrate the claim, making the 90-day time limits mentioned above inapplicable. Thus, Xerox argued that the plaintiff was required to file his claim within 60 days of November 3, 2016, the day he received the right to sue letter. Xerox argued that the plaintiff’s initial claim with his selected arbitrator did not constitute “filing” under the DRP because it was not with the correct arbitrator.

The arbitrator found in favor of Xerox, holding that the plaintiff failed to bring a case against Xerox in the appropriate amount of time. The plaintiff filed a motion in district court to set aside the arbitrator’s award based on the alleged bias and misconduct of the arbitrator. The trial court agreed with the plaintiff and reversed the arbitrator’s decision. However, an appellate court reversed the trial court’s decision, finding that there was no actual conflict of interest, and the arbitrator did not limit the plaintiff’s ability to present evidence. Thus, the court ordered that the arbitrator’s decision in favor of Xerox be reinstated.

Jury awards no damages in sex discrimination trial against Baker Tank

A Federal jury awarded no damages to a plaintiff who sued her employer for sexual discrimination and harassment. The trial was held in Marshall, Texas’ Federal Courthouse and was presided over by U.S. Chief District Judge Rodney Gilstrap. The trial lasted three days.

The case began when the plaintiff filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging her employer, Smith County Baker Tank, ignored her complaints of sexual harassment, discrimination and a hostile work environment. The lawsuit alleged violations of Title VII, the Lilly Ledbetter Fair Pay Act, the Equal Pay Act and the Texas Employment Discrimination Act. The lawsuit claimed that throughout the plaintiff’s employment at Baker Tank’s Arp facility, she earned less than her male co-workers with similar jobs and was also subjected to sexual harassment and a hostile work environment. She alleged that male co-workers and supervisors would make sexist and inappropriate comments and engage in inappropriate behavior in her presence.

The plaintiff was seeking punitive damages between $48,000 and $480,000 as well as $15,000 in compensatory damages for lost pay. Further, the plaintiff sought damages for physical and emotional pain due to the discrimination and hostile working environment in the amount of $50,000 to $150,000, which represented her yearly salary for the three years she worked at Baker Tank.

The jury denied the plaintiff’s pay gap claim and found that she did not prove that she was paid less than her male counterparts because she was female. The jury also found that although she did prove that more than one co-employee harassed her because of her sex, this harassment did not rise to the level of creating a hostile work environment that would alter the terms of her employment. Therefore, the jury awarded no damages to the plaintiff.

Attorney Gregory D. Jordan is an employment attorney who represents employers and employees with offices in the Austin area. To learn more, visit http://www.theaustintriallawyer.com/

Retaliation claim over firing that took place soon after workplace injury should have gone to jury

The close proximity in time between a construction worker’s termination and his filing of a workers’ compensation claim, along with other factors that called the employer’s justification into question, should have been enough to get the employee past the employer’s motion for a judgment in their favor, the U.S. Court of Appeals for the Fifth Circuit held recently in a retaliatory termination case.

Reversing the trial court in a case in which the worker was fired just 15 days after he injured himself in a fall from a scaffold, and 11 days after he filed a workers’ compensation claim, the court said that the worker had presented enough evidence to get his case to the jury. The court, in an opinion written by Judge Catharina Haynes, called the judge’s decision to direct a verdict in favor of the employer “unexplained and difficult to discern.”

The Texas Supreme Court, in Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 451 (Tex. 1996), set out a list of factors for trial courts to consider when deciding whether unlawful retaliation played a role in a termination following a workers’ compensation claim:

  • Did the manager making the decision on the termination have knowledge of the compensation claim?
  • Did the manager express a negative attitude toward the employee’s injured condition?
  • Did the manager fail to adhere to established company policies?
  • Is there evidence of discriminatory treatment in comparison to similarly situated employees?
  • Is there evidence that the stated reason for the discharge was false?

Here, the Fifth Circuit, without passing on the merits of the employee’s retaliation claim, found more than enough evidence to withstand the employer’s motion for judgment as a matter of law.

First, the firing took place two weeks after the injury, and the manager was aware of both the injury and the subsequent filing of a worker’s compensation claim.

Second, the manager failed to follow the company’s progressive discipline policy — he jumped from Step One (verbal warning) to Step Five (termination), skipping the intermediate steps.

Third, the manager expressed a negative attitude toward the employee, describing his injury as a “supposed injury” and his physical restrictions as “self-imposed.”

Fourth, the manager — who in fact was the employer’s safety officer and not the employee’s direct supervisor at the time of the accident — offered several, shifting explanations for why the employee was fired. The employee was initially verbally warned for failing to pick up paperwork, then later fired after the manager accused him of being profane and insubordinate on a single occasion. However, the company’s documentation of the firing mentioned only “Violation of Safety Rules” and “Violation of Company Policy/Practices.” It described the employee’s injury as an occasion in which the employee “took it upon himself to utilize a scaffold of which he was not trained or authorized to use.”

The court decided that the circumstances surrounding the employee’s termination were circumstantial evidence of retaliatory motive.

“[The employee] has presented evidence to support the notion that the stated reason for discharge was false,” the court ruled, sending the retaliation claim back to the lower court for retrial.

The case is Cristain v. Hunter Buildings and Manufacturing LP, No. 17-20667 (5th Cir., decided Nov. 14, 2018).

EEOC to United Airlines: Conduct outside the workplace can create harassment in the workplace

A case involving “revenge porn” photos of a flight attendant published online by a pilot for the same airline promises to illuminate an employer’s duty to take affirmative measures to protect employees against sexual harassment in the workplace.

According to a recent complaint filed by the Equal Employment Opportunity Commission against United Airlines, the airline’s duty to keep its workplace free from sexual harassment includes a duty to crack down on harassment occurring outside the workplace as well — at least when bad acts are brought to its attention, multiple times, over a period of several years.

The EEOC’s complaint alleges that United Airlines knew about the pilot’s “revenge porn” posts targeting the flight attendant but unlawfully did nothing about them.

“Employers have an obligation to take steps to stop sexual harassment in the workplace when they learn it is occurring through cyber-bullying via the internet and social media,” said Philip Moss, an EEOC attorney. “When employers fail to take action, they fail their workers and enable the harassment to continue.”

The EEOC’s complaint was a long time in coming, according to the government. According to the EEOC, the flight attendant filed three civil lawsuits against the pilot. She obtained restraining orders against him in 2009 and 2011. Reporting by the San Antonio Express-News indicated that the pilot settled these cases for $110,000.

The flight attendant also purportedly complained to United Airlines officials in 2011. No corrective action took place as a result of these complaints. The pilot continued to work at the airline.

In 2013, the flight attendant filed another complaint with United Airlines. According to the flight attendant, the pilot was continuing to post photos of her online, sometimes while on the job during layovers between flights. United Airlines investigated but, according to the EEOC, took no action “that could be reasonably calculated to be effective.”

The flight attendant next complained to the FBI, which arrested the pilot in 2015. Federal charges notwithstanding, the pilot remained actively employed at United Airlines until January 2016 when the airline granted him a long-term disability. He pleaded guilty to a federal stalking offense in June 2016 and retired with full benefits one month later.

In its complaint, the EEOC alleged that United Airlines’ failure to address that the pilot’s actions interfered with the flight attendant’s ability to perform her job. The EEOC asserts that United Airlines’ inaction subjected the flight attendant to a sexually hostile work environment, in violation of Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on sex, including sexual harassment. The EEOC is seeking a permanent injunction preventing the airline from allowing hostile work environment for women. It also seeks money damages for the flight attendant.

United Airlines told the San Antonio Express-News that its conduct did not violate federal law. “United does not tolerate sexual harassment in the workplace and will vigorously defend against this case,” the airline said through a spokesman.

The case is EEOC v. United Airlines, Inc., No. 5:18-cv-817 (W.D. Texas, complaint filed Aug. 9, 2018).

Employer’s Failure to Sign Arbitration Agreement Made it Unenforceable Against Employee

Notwithstanding the strong federal and state policies in favor of arbitrating business disputes, employers that manage litigation risk via mandatory arbitration agreements may wish to consider whether the agreements require execution on the company’s part.

After all, employers should expect that any important contract or agreement is going to be closely scrutinized in a court of law if a dispute arrises..

Recently, in Huckaba v. Ref-Chem L.P., the Fifth Circuit held that an arbitration agreement signed by an employee was not enforceable because it was not signed by a representative of the employer. Having gone to the trouble of drafting the arbitration agreement and obtaining the employee’s signature on it, the employer placed the document in the employee’s personnel file and moved on to other business.

The Fifth Circuit said that language in the agreement explicitly required the signature of both parties. For example, the agreement provided that “[by] signing this agreement the parties are giving up any right they may have to sue each other.” Elsewhere the agreement provided that modifications must be “in writing and signed by all parties.” There was also a blank signature line for the employer, though the court said that this was not dispositive.

In view of this language, the court said, the absence of the employer’s signature is fatal to enforcement of the arbitration agreement.

The court rejected the employer’s argument that the employee’s continued employment after signing the arbitration agreement constituted acceptance of the agreement. The contested issue in this case, the court said, is whether the arbitration agreement was properly executed — not whether the employee accepted its terms.

The court also turned back the employer’s reliance on In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002), a case in which the Texas Supreme Court enforced an arbitration agreement that was not signed by either the employee or the employer. In Halliburton, the court noted, the agreement stated that submission to arbitration was a term of employment. In this case, on the other hand, the arbitration agreement merely provided that continued employment was consideration for the agreement.

Along the way, the Fifth Circuit observed that the trial court had erred when it concluded that the federal presumption in favor of arbitration, contained in the Federal Arbitration Act, meant that the party challenging an arbitration agreement has the burden to overcome its presumptive validity.

The Huckaba v. Ref-Chem case was decided a few weeks after the U.S. Supreme Court’s ruling in Epic Systems Corp. v. Lewis, No. 16-285 (U.S., decided May 21, 2018). In Epic Systems, the high court emphasized that federal courts may refuse enforcement of arbitration agreements only on “generally applicable contract defenses” under state law.

The message employers should take from the Huckaba and Epic Systems cases is that federal courts will enforce arbitration agreements, but they will not judicially repair contracts that fail under state contract law. The arbitration agreement in Huckaba might have survived if it had been drafted differently (e.g., omitting language explicitly mentioning the need for the employer’s signature, and tightening up the language regarding the effect of continued employment). However, employers should ensure, for all contracts affecting company operations, that airtight processes are put in place to guarantee that every necessary signature is obtained.

The case is Huckaba v. Ref-Chem L.P., No. 17-50341 (5th Cir., decided June 11, 2018)

County Worker on FMLA Leave Deemed “Unemployed” Under Texas Unemployment Compensation Act

The Texas Supreme Court recently concluded that a county employee on unpaid medical leave was “unemployed” within the meaning of the Texas unemployment compensation statute.

The court’s ruling is surprising, because it appears to create a right to unemployment benefits for workers who are not actually unemployed as most understand the term. However, all unemployed workers are not entitled to unemployment benefits. They must also meet the Unemployment Act’s numerous eligibility criteria. The court was careful to point out that it was not ruling on the separate issue of eligibility.

Employee Sought Benefits During Unpaid Leave
The employee in this case worked for the Wichita County government as an assistant emergency management coordinator. Suffering from anxiety and depression, she took several months’ leave under the Family and Medical Leave Act. When her paid leave ran out, she converted to unpaid leave and subsequently made a claim for unemployment benefits.

The Texas Workforce Commission concluded that the county worker was unemployed while on unpaid leave of absence for a medically verifiable illness and that it could pay unemployment benefits if the worker “met all other requirements.”

Wichita County appealed. The case eventually arrived at the Texas Supreme Court, where the high court agreed with the Texas Workforce Commission. As Justice Debra H. Lehrmann observed in a unanimous opinion, the Texas Unemployment Compensation Act’s definition of “unemployed” does not require that an employee be terminated from employment.

An individual is considered unemployed if the individual meets the act’s definition of “totally unemployed” or “partially unemployed.” Those terms are defined, at §§ 201.091(a) and (b) of the Unemployment Act, by income thresholds: the individual did not earn more than $5 of 25 percent of the benefit amount during the relevant benefit period.
“Pursuant to these provisions, an individual qualifies as ‘unemployed’ so long as her wages are low enough,” Justice Lehrmann wrote. “Nothing in these definitions contemplates a formal severance of the employer–employee relationship.”

The Texas high court rejected both the county’s contention that this reading of the Unemployment Act defied a common-sense understanding of the word “unemployed,” and the Texas Court of Appeals’ somewhat related view that giving the Unemployment Act a plain language interpretation would lead to absurd results.

The Unemployment Act, § 207.021(a)(1)–(5), (8) supplies a long list of criteria to be met before an individual is eligible to obtain unemployment benefits. The individual must:

  • have registered for work at an employment office and continued to report to the office as required by applicable Commission rules;
  • have made a claim for benefits;
  • be able to work;
  • be available for work;
  • be actively seeking work in accordance with Commission rules; and
  • have been “totally or partially unemployed for a waiting period of at least seven consecutive days.”

In order to receive unemployment benefits, an individual must be “unemployed” and “eligible” and not otherwise statutorily excepted or disqualified from receiving benefits. Justice Lehrmann wrote that the court was not deciding whether the county worker met the eligibility criteria. She surmised that it was not likely that a worker could qualify for FMLA leave and also be eligible for unemployment benefits.

Going forward, it will be important for employers in Texas to test the court’s assumptions. Employers should take a hard look at their employment policies to see if there are any loopholes that would allow employees on unpaid leave to meet the Unemployment Act’s eligibility criteria. These should be closed up immediately; otherwise employers could face unforeseen exposure for employment benefits.

The case is Texas Workforce Commission v. Wichita County, No. 17-0130 (Texas, decided May 25, 2018).

Professors alleging discrimination sue University of Houston-Victoria

Three business professors at the University of Houston-Victoria (UHV) are alleging discrimination by their former dean in a lawsuit they filed in March. In their lawsuits, associate professors Luh Yu Ren, Chun-Sheng Yu and Jianjun Du argue UHV officials failed to protect them from discrimination and retaliation from Farhang Niroomand, the former dean of the School of Business Administration.

The plaintiffs, whose are between 59 to 65 years old, are alleging their former boss created a hostile work environment and implemented obstacles preventing them from receiving promotions and pay raises after they complained about Niroomand to the UHV officials about his behavior. Further, the plaintiffs complain the prejudicial treatment they received was due to their ages and Chinese heritage.

Attorneys for UHV argue the men’s lawsuits are without merit, dismissing them as nothing more than common workplace disagreements. “Plaintiff[s] [are] simply complaining about ordinary tribulations of the workplace such as petty slights and minor annoyances,” they argued in court documents. They also claimed the lawsuit fails to meet procedural and jurisdictional requirements.

The embattled former dean resigned in 2017.

The plaintiffs allege they filed suit only after failing to resolve their complaints through the university’s human resources department, the Texas Workforce Commission Civil Rights Division and the Equal Employment Opportunity Commission. While initially complaining UHV failed to respond to their grievances, the plaintiffs since admitted they believed officials did not actually take their complaints seriously.

Eight ex-employees of Texas sanitation company claim racial discrimination

Eight African American employees of a Texas sanitation company have filed a lawsuit claiming discrimination and retaliation.

Dantrell Patterson, Lamonte Young, Demetrius Patterson, Tadarious Dixon, Keithdrick Patterson, Jarvis Hill, Jermaine Bell and Derrick Robert filed the lawsuit against Sanitation Solutions Inc. in the Marshall Division of the Eastern District of Texas on April 20. The plaintiffs claim that the defendant subjected them to acts of intentional discrimination based on race and color.

The lawsuit claims they were surrounded by a “systemic atmosphere of bigotry” at work. They claim Sanitation Solutions management and co-workers used racial slurs and referred to black employees as “boy,” and that a swastika and nooses were displayed at work locations and on trucks. The plaintiffs allege that they were subjected to harassment and discrimination, and retaliated against after they registered complaints about the treatment. The plaintiffs also claim that white workers were paid more than black employees doing the same work, and received lighter discipline than black workers in similar situations, with some of the plaintiffs being discharged. According to the complaint, when the plaintiffs retained counsel and presented management with a written list of grievances, the remaining employees had their employment terminated.

The plaintiffs are seeking damages, front pay, punitive damages, pre- and post-judgment interest, attorney’s fees, an injunction preventing the defendant from engaging in unlawful practices or retaliating against the plaintiffs, reinstatement, and other proper and necessary relief. A jury trial is demanded.

Texas drilling company sued for employment discrimination

A lawsuit has been filed accusing a Texas drilling company of racial discrimination.

Andrew Collins filed the lawsuit in U.S. District Court for the Southern District of Texas, Houston Division, alleging that Noble Drilling violated Title VII of the Civil Rights Act.

Collins, an African American resident of Harris County, claims that he was subjected to harassment, threats, intimidation, discrimination and disparate treatment because of his race, which caused him embarrassment and emotional distress.

According to the lawsuit, Noble Drilling denied Collins the privileges, benefits, terms and conditions of employment. The complaint alleges that the company retaliated against Collins by transferring him to a less desirable offshore facility after he reported racial and sexual harassment. Noble Drilling threatened Collins with disciplinary action and wrongfully terminated his employment, the lawsuit claims.

Collins seeks back pay including lost wages and benefits, compensatory damages, attorney fees and costs, as well as other relief to which he may be entitled. A trial by jury has been demanded.

Noble Drilling, based in Sugar Land, Texas, operates about 30 drilling rigs, including 14 jackups and 16 semi-submersibles. In 2015, revenue from Shell Oil accounted from 49 percent of the company’s income. The company announced mass layoffs in January 2016.

Former Texas Department of Agriculture worker files employment lawsuit claiming race discrimination

A former deputy chief financial officer for the Texas Department of Agriculture has filed a lawsuit against the agency, alleging that she was fired because of her race.

Shelia Latting, who is black, claims that her employment was terminated a year ago, and that she was replaced by two white employees who were less qualified.

The lawsuit, filed in state district court in Travis County, names Texas Agriculture Commissioner Sid Miller as a defendant, in his official capacity. Latting has been a state employee for 21 years. According to the lawsuit, shortly before Miller was sworn into office, he offered Latting the position of chief financial officer, and she accepted. Latting worked on a budget overhaul at Miller’s request, but was not promoted, and was told her job was terminated due to a “reduction of force,” the lawsuit claims.

Latting claims that two white women were hired to positions essentially the same as her former position. The lawsuit alleges that the two women had worked with an individual at the Texas Facilities Commission, and were hired shortly after that individual was appointed as an assistant commissioner at the Department of Agriculture. An internal audit last April found that the Facilities Commission had often hired employees with no competition and awarded promotions that were unsupported by evaluations. The Austin American-Statesman reported in July that the new assistant commissioner brought six former employees to the Department of Agriculture, and some of them were given quick promotions and raises.

Latting’s lawsuit seeks between $200,000 and $1 million in damages, as well as a change in policy to help prevent future discrimination.

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