Labor and Employment Law Alert

4/1/2001

What's in This Alert? April was another busy month for labor and employment law developments. In this month's Labor & Employment Law Alert, we discuss a decision issued last week by the U.S. Supreme Court in which the Court took a strongly pro-employer stance on insubstantial claims of sexual harassment and retaliation. We also discuss two new cases from the Ninth Circuit, one on accommodation of employees with substance abuse problems and the other on harassment of a homosexual employee. We also look at two state court decisions, one from Washington on personal liability for individual managers, and one from Utah that addresses the tort of wrongful discharge under Utah law.

Supreme Court Refuses To Indulge Unsupported Sexual Harassment and Retaliation Claims. The U.S. Supreme Court last week issued a decision that will be of substantial assistance to employers defending both retaliation and sexual harassment claims. The decision in Clark County School District v. Breeden, 2001 WL 402573 (U.S. April 23, 2001) arose out of a complaint by a female school-district employee who alleged that during a meeting with her supervisor and another employee in which they were reviewing job applicants' responses to a psychological evaluation, the plaintiff's supervisor read aloud from a report in which an applicant stated that he once commented to a co-worker: "I hear making love to you is like making love to the Grand Canyon." The supervisor then allegedly looked at the plaintiff and said, "I don't know what that means." The other employee then said, "Well, I'll tell you later," and both men chuckled. The plaintiff complained to her supervisor and to another school district official about the interaction. When her job duties were later changed, the plaintiff claimed that this was the result of retaliation for her complaints. And, when she was transferred to a different job location three years later, she claimed this too was retaliation.

In order to analyze the plaintiff's retaliation claims, the Court was required to analyze whether the plaintiff's initial complaints about the comments at the meeting were based on a good faith belief that the comments constituted unlawful sexual harassment. While the Ninth Circuit concluded that the plaintiff could have reasonably concluded that this single incident constituted sexual harassment, the U.S. Supreme Court sharply disagreed. The Court noted that in order to be actionable, sexual harassment must be "so severe and pervasive as to alter the conditions of the victim's employment and create an abusive working environment." Consequently, the Court concluded that in this case, "[n]o reasonable person could have believed that the single incident recounted above violated [that] standard." The Court added that the incident "cannot remotely be considered 'extremely serious,' as our cases require."

The Court also addressed the issue of the amount of evidence that is needed in a retaliation case to demonstrate a "causal link" between a protected complaint of discrimination and an adverse employment action. The plaintiff urged the Court to find that the fact that she was transferred after she complained to the Equal Employment Opportunity Commission ("EEOC") about the sexual comment was sufficient to create a factual question a jury must resolve. The employer countered that the undisputed evidence showed that the transfer decision was being planned before her EEOC filing. Reversing the Ninth Circuit on this point too, the Supreme Court first noted that "[t]he cases that accept mere temporal proximity between an employer's knowledge of protected activity and an adverse employment action as sufficient evidence of causality to establish a prima facie case uniformly hold that the temporal proximity must be 'very close.'" The Court then observed: "Employers need not suspend previously planned transfers upon discovering that a Title VII suit has been filed, and their proceeding along lines previously contemplated, though not yet definitively determined, is no evidence whatever of causality."

What Does This Mean for You? Following this decision, employers can expect that courts and anti-discrimination agencies will be somewhat less indulgent of complaints of harassment that are based only on isolated or trivial instances of sexual or otherwise offensive language or conduct. In addition, plaintiffs alleging retaliation may need to have stronger evidence than merely an adverse employment action that happens to come after an employee complains.

Ninth Circuit Addresses Rights and Obligations of Employers in Dealing with Alcoholic and Drug Using Employee. In Brown v. Lucky Stores, Inc., 2001 WL 378309 (9th Cir April 17, 2001) the Ninth Circuit considered a claim of disability discrimination brought by an employee whose employment was terminated as a result of her absence from work during several days of incarceration followed by court-ordered attendance in a rehabilitation program. The Ninth Circuit upheld the trial court's grant of summary judgment for the employer and, in so doing, reaffirmed several important principles:

• The court reemphasized that, while alcoholism is a covered disability under the Americans With Disabilities Act ("ADA"), an employer may hold an alcoholic employee to the same standards of conduct as other employees.

• The ADA expressly provides that it does not protect an employee who is "currently engaging in the use of illegal drugs." That provision does not apply, however, to an individual who "has successfully completed a supervised drug rehabilitation program and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in such use." The court held that this requires that the employee actually refrain from drug and alcohol use for a substantial length of time.

• The court noted that an employee who denies that he or she needs a leave of absence to attend a rehabilitation program is not legally entitled to receive such leave as an accommodation.

• The court also reemphasized that an employee who does not ask for a modification of his or her job is not entitled to an accommodation under the ADA except in the unusual circumstance that the employer (1) knows that the employee has a disability; (2) knows, or has reason to know, that the employee is experiencing workplace problems because of the disability; and (3) knows, or has reason to know, that the disability prevents the employee from requesting a reasonable accommodation.

What Does This Mean for You? Employers need not be clairvoyant about the need for accommodation; at least under federal law, the employee generally must request some modification. And employers may hold alcoholic employees to the same standard of conduct that is required of other employees.

Ninth Circuit Holds that Harassment of Homosexual Employee Does Not Give Rise to Title VII Claim. In Rene v. MGM Grand Hotel, Inc., 243 F.3d 1206 (March 23, 2001) the Ninth Circuit waded into the confusing quagmire of same-sex sexual harassment, concluding that a homosexual male employee could not maintain a hostile-work-environment claim under Title VII of the Civil Rights Act of 1964, despite the fact that he was repeatedly subjected to sexually abusive taunting by co-workers and supervisors. The court held that the plaintiff was not alleging that he was harassed because of his gender (there was no dispute that other male co-workers were not subject to this conduct); rather he was asserting that he was harassed because he was gay. The court held that Title VII only prohibits harassment that is motivated by gender, not harassment motivated by sexual orientation. Thus, the court concluded, the plaintiff could not state a claim. A strongly worded dissenting opinion chastised the majority opinion, noting that the plaintiff's

"attackers may have targeted him for sexual pleasure, as an outlet for rage, as a means of affirming their own heterosexuality, or any combination of a myriad of factors, the determination of which falls far beyond the competence of any court. The effect was to humiliate [him] as a man. Enforcing Title VII in the mixed gender context does not involve determining which pleasure center in the attackers' brain was stimulated by the attacks, nor should it in this case."

What Does This Mean for You? While this decision will be helpful for some employers in defending employment litigation, employers would, of course, be extremely foolhardy to allow harassment of this kind to take place in the workplace. And, while such conduct may not give rise to a viable claim under the federal anti-discrimination statutes, it may lead to tort claims and claims under state and municipal anti-discrimination laws.

This Time It Really Is Personal. In Brown v. Scott Paper Worldwide Co., 20 P3d 921 (April 5, 2001), the Washington Supreme Court held that individual supervisors employed by an employer that has eight or more employees can be held personally liable for discriminatory acts under the Washington Law Against Discrimination. This is a significant point of difference from federal law (and from the laws of many states like Oregon that do not permit individual liability for supervisors on statutory discrimination claims), and puts Washington in the company of California as one of the few states that provide for such liability.

What Does This Mean for You? Supervisors and managers in Washington should be aware that their on-the-job decisions may subject them to personal liability for discrimination and should act accordingly.

Supreme Court of Utah Narrowly Construes Wrongful Discharge Tort. In Rankley v. Fairview Care Centers, Inc. (2001 WL 333090 April 6, 2001), the Utah Supreme Court held that an at-will employee of a nursing home could not state a viable claim that she was discharged in violation of public policy. The plaintiff asserted that she was fired because she disclosed to a resident that a check from the Veterans Administration had been taken by the resident's daughter-in-law. She asserted that her termination violated the state's public policy. The court noted that under Utah law, a wrongful discharge may be asserted only when a termination of employment "constitutes a violation of a clear and substantial policy." The court then canvassed Utah's statutes and the state constitution to determine if any public policy was transgressed by the termination of the plaintiff. The court found that none of those sources of public policy directly implicated the situation at issue in this case. While the court found state and federal regulations that were directly on point, the court nevertheless concluded that this was insufficient to support a claim because the "clear public policy must be found in our statutes or constitutions or judicial decisions." The court explained that "[a]dministrative regulations by their very nature are not 'substantial' under our case law."

What Does This Mean for You? The at-will employment doctrine remains unfettered by broad or over-reaching interpretations of public policy in Utah. However, employers should always proceed with caution where a termination may be said to implicate a larger public policy concern.

Confused? Have a Question? If you have questions about the developments described in this Alert, please feel free to call any of the attorneys in our Labor and Employment Practice Group. For a complete list of attorneys in Washington, Oregon, Idaho and Utah, please click on www.stoel.com.

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This is a periodic publication of the Labor and Employment Law Department of Stoel Rives LLP for the benefit and information of its clients and friends. This Alert should not be construed as legal advice or a legal opinion on specific facts or circumstances. The contents are intended for general informational purposes only. You are urged to consult your own lawyer concerning your own circumstances and any specific legal questions you may have.

Copyright 2001, STOEL RIVES LLP

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