Ninth Circuit - Inconsistency Costs Employer Summary Judgment

So, the Ninth Circuit in Earl v. Nielsen Media Research reversed summary judgment in an age discrimination case.  Earl violated several company policies over time. She was placed on a Development Improvement Plan and ultimately was fired.  As she was nearly 60, she claimed age discrimination motivated her discharge.

The Ninth Circuit reversed summary judgment.  Earl showed that younger employees violated the same policies without getting fired.  Because they were sufficiently similar employees (same positions, same policy violations), they were adequate to satisfy the "similarly situated" requirement for comparing employees.  When you read this case, you will know why we management side lawyers always preach consistency.

The court's second point was that the employer did not apply a performance improvement plan to plaintiff Earl, which they had done for other employees. The court rejected the company's argument that it employed people "at will" and could deviate from the progressive discipline system.

Earl was terminated after receiving a single DIP. She never received a PIP, a much more serious warning. Earl has presented evidence that in terminating her without first issuing a PIP, Nielsen deviated from its normal internal disciplinary procedure. In May 2006, Nielsen did not terminate employee 46432, a younger recruiter, even though he had extremely serious performance issues, because he had received only a DIP. In an email exchange with other company officials, Bob Burns wrote: “As much as it sounds reasonable to terminate him without a PIP, it would not be consistent with our procedure.” Employee 46432 was eventually terminated, but only after issuance of a PIP.
Thus, the court found that the company's insistence on a PIP for a younger employee in the name of consistency raised a factual question regarding the company's willingness to forgo the PIP re Earl. It is unclear whether the company tried to show the court there were a variety of employees of a variety of ages who had received and not received PIPs.  If so, perhaps the employer would not have lost this point.

If your organization uses PIPs and other progressive discipline, it is important to understand that if you make an exception, you risk a claim of disparate treatment unless you can explain why employees who receive different treatment are not similarly situated. It also is important to ensure that progressive discipline is not applied differently to different protected individuals.

The opinion is Earl v. Nielsen Media Research, Inc. and the opinion is here.


Dukes v. Walmart Fallout

Eveyone knows about the Dukes v. Walmart case (post is here). Well, Ellis v. Costco is another "big box" retailer case, in which female managers challenged Costco's promotion practices.

According to the opinion, Costco does not document or set concrete standards re promotion to General Manager and it always promotes from within the ranks of its AGMs.  Several female Costco employees brought a nationwide class action, claiming Costco's promotion practices discriminated against women.

The Ninth Circuit reversed the district court's grant of class certification.  The opinion finds many errors with the district court's reasoning, mainly because of Dukes' interpretation of the class action standards in federal court (Rule 23).   For example, the district court failed to conduct a "rigorous analysis" regarding whether a common question of law or fact would affect the entire proposed class's rights to recovery. The court of appeals also held the district court did not consider whether individual circumstances rendered the plaintiffs incapable of proving the "typicality" element.  Costco put forward evidence regarding the named plaintiffs that appeared to explain individualized reasons why each plaintiff did not succeed.

The court of appeals also rejected certification under Rule 23(b), which permits class certification in cases where the relief sought is primarily an injunction rather than damages.  Again, relying on Dukes, the court of appeals noted Walmart precludes certification under Rule 23(b)(2) when each class member would be entitled to an award of money damages. Moreover, former employees cannot bring claims for injunctive relief, as injunctions operate prospectively and former employees will have no stake in them.

There is more. But this case places into focus that Dukes will have a profound effect on large employment law class actions in federal court. It remains to be seen how California courts deal with Dukes, but the state's courts do rely on federal law when evaluating class actions.

The case is Ellis v. Costco and the opinion is here.

Ninth Circuit Interprets Learned Professional Exemption

The State of Washington's Department of Social and Health Services employ social workers, whom the agency classifies as exempt under the Fair Labor Standards Act.  The state relies on the "learned professional exemption," which means "an employee whose primary duties require 'knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.'” 29 C.F.R. § 541.300(a)(2)(I).

The state's requirements for social worker positions included:
at least a “[b]achelor’s degree or higher in social services, human services, behavioral sciences, or an allied field,” as well as eighteen months as a Social Worker 1 or two years’ experience in an equivalent position. Candidates for Social Worker 3 must meet the same educational requirements and have additional work experience. Within one year of their appointment, new employees in these positions must complete a formal training program that includes four weeks of classroom instruction and two weeks of field instruction.
The state also had guidance regarding when equivalent work experience could substitute for specialized degrees.

Reversing the district court, the court of appeals decided that the social worker position was not "exempt" automatically and required a trial to find out the facts.  The court explained:
while social workers no doubt have diverse jobs that benefit from a multi-disciplinary background, 6 the “learned professional” exemption applies to positionsthat require “a prolonged course of specialized intellectual instruction,” not positions that draw from many varied fields. While particular coursework in each of the acceptable fields may be related to social work, DSHS admits that it does not examine an applicant’s coursework once it determines that the applicant’s degree is within one of those fields. For the “learned professional” exemption to apply, the knowledge required to perform the duties of a position must come from “advanced specialized intellectual instruction” rather than practical experience. 29 C.F.R. § 541.301(d). The requirement of a degree or sufficient coursework in any of several fields broadly related to a position suggests that only general academic training is necessary, with the employer relying upon apprenticeship and experience to develop the advanced skills necessary for effective performance as a social worker.
So, the issue is not whether a job requires a college degree generally.  The issue is whether the job requires a college degree in a particulars skill that is directly related to the job.

The case is Solis v. State DSHS and the opinion is here.