By Edwin S. Hopson

On July 22, 2010, the U.S. Equal Employment Opportunity Commission (EEOC) celebrated the 20th anniversary of the passage and signing into law of the Americans With Disabilities Act (ADA) at its Washington, D.C. headquarters.  The celebration consisted of a series of speakers and panels, with the stated theme of “Celebrating the ADA: Looking Back, Moving Forward.”

 

In a July 22, 2010, press release, EEOC Chair Jacqueline A. Berrien stated that “[t]he EEOC is proud of its enforcement efforts under the ADA for the past twenty years, moving forward to fulfill the nation’s promise to give all Americans opportunity, dignity and respect in the workplace.”  She went on to note that “[t]he ADA did not erase all of our challenges, but we have learned over the years, as we also celebrate the 45th anniversary of the EEOC’s founding this month, that the American workplace has changed for the better.”

 

EEOC’s celebration, ironically was organized by EEOC Commissioner Chai Feldblum, who was herself instrumental in the development and passage of the ADA as well as the Americans with Disabilities Amendments Act of 2008 (ADAAA) prior to coming to the EEOC, according to EEOC’s press release.  Commissioner Feldblum stated on this occasion that “[w]ork is key to the soul. It’s not just about paying the bills. It’s about feeling important, about feeling useful. Everyone should be able to work, if they can. But to achieve that for people with disabilities - we really need to change how people think about who they want to hire.”

 

The speakers included EEOC officials and authorities on disability law and practice, along with a complainant in an EEOC disability rights case. 

 

“Our country is stronger and more fair today because the ADA opened the doors of opportunity to millions of people with disabilities who had been effectively locked out of the American dream to which we all aspire,” said Wade Henderson, President and CEO of the Leadership Conference on Civil and Human Rights who spoke at the event.

 

“Thanks to the ADA, all Americans have benefitted from the talents and contributions of people with disabilities,” said Andrew J. Imparato, President and CEO of the American Association of People with Disabilities, who also spoke. “However, much work remains to be done. Too many people with disabilities are eager to work but still excluded from our workforce. Our workplaces need these individuals in order to flourish.”

 

The agency also presented awards to current and former EEOC Commissioners and staff who played key roles in the passage of the ADA, promulgation of regulations and guidance under the ADA, and enforcement of the ADA. They included:

 

●the late Evan J. Kemp, Jr., who was the Chair of the EEOC when the ADA first became law;

 

●Thomasina Rogers, who, as the Legal Counsel in the period immediately after the passage of the ADA, oversaw the development of the EEOC’s regulations, guidance, and Technical Assistance Manual;

 

●Paul Steven Miller, a former Commissioner of the EEOC who was a tireless advocate for disability rights within and outside the Commission;

 

●Christine Griffin, former Commissioner of the EEOC where she founded the LEAD Initiative, designed to promote the hiring of people with disabilities in the federal government;

 

●Christopher Bell, former special assistant to the late Chair Evan Kemp, who served as the first head of the Office of Legal Counsel’s ADA Policy Division;

 

●Peggy Mastroianni, the current EEOC Associate Legal Counsel, who directed the development of numerous ADA Guidance materials and regulations; and

 

●Christopher Kuczynski, current Assistant Legal Counsel of the EEOC and director of the ADA/GINA Policy Division.

 

More information about the 20th Anniversary Celebration, including the webcast of the event, is available on the EEOC’s website at http://www.eeoc.gov/eeoc/history/45th/ada20/index.cfm

 

By Robert B. Fitzpatrick

In the wake of the Supreme Court's decisions in Twombly and Iqbal, federal courts around the country have addressed whether this newly articulated pleading standard applies to affirmative defenses, with varying results: 

 

See Hayne v. Green Ford Sales, Inc., 2009 U.S. Dist. LEXIS 119886 *6-7 (D. Kan. Dec. 22, 2009) ("A few courts have rejected the heightened pleading standard for affirmative defenses.  The majority of courts addressing the issue, however, have applied the heightened pleading standard announced in Twombly, and further clarified in Iqbal, to affirmative defenses.") (internal citations and footnotes omitted).  See also, e.g., Barnes v. AT&T Pension Benefit Plan, 2010 U.S. Dist. LEXIS 62515 (N.D. Cal. June 22, 2010) ("The court can see no reason why the same principles applied to pleading claims should not apply to the pleading of affirmative defenses which are also governed by Rule 8."); Hcri Trs Acquirer, LLC v. Iwer, 2010 U.S. Dist. LEXIS 41552 (N.D. Ohio Apr. 28, 2010) ("[T]he pleading requirements for affirmative defenses are the same as for claims of relief."); Cosmetic Warriors Ltd. v. Lush Boutique, L.L.C., 2010 U.S. Dist. LEXIS 16392 *4 (E.D. La. Feb. 1, 2010) ("a defendant must plead an affirmative defense with enough specificity or factual particularity to give the plaintiff fair notice of the defense that is being advanced"); OSF Healthcare Syst. v. Banno, 2010 U.S. Dist. LEXIS 7584 *3 (C.D. Ill. Jan. 5, 2010) (citing Twombly and Iqbal, the court concluded that "the affirmative defense, as pled, must offer enough facts to show the defense is plausible on its face"); CTF Dev., Inc. v. Penta Hospitality, LLC, 2009 U.S. Dist. LEXIS 99538, *7-8 (N.D. Cal. Oct. 26, 2009) ("Under the Iqbal standard, the burden is on the defendant to proffer sufficient facts and law to support an affirmative defense"); Fogel v. Linnemann (In re Mission Bay Ski & Bike, Inc.), 2009 Bankr. LEXIS 2495 at *15-16 (Bankr. N.D. Ill. Sep. 9, 2009) ("Affirmative defenses are pleadings and so are subject to all pleading requirements under the Federal Rules.... That means affirmative defenses must meet the notice-pleading standards of Rule 8(a) as the Supreme Court recently interpreted them in Bell Atlantic Corp. v. Twombly... and Ashcroft v. Iqbal."); Sales Board v. Pfizer, 2009 U.S. Dist. LEXIS 69714 at *19-20 (D. Minn. Aug. 10, 2009) (holding that Iqbal applies to affirmative defenses and stating that affirmative defenses must be based on factual allegations that give rise to the relief requested); Kaufmann v. Prudential Ins. Co. of Am., 2009 U.S. Dist. LEXIS 68800 at *2 (D. Mass. Aug. 6, 2009) (holding that "the court is inclined to think that a defendant has the same Rule 8 obligations with respect to notice pleading as does a plaintiff"); Shinew v. Wszola, 2009 U.S. Dist. LEXIS 33226 *10 (E.D. Mich. Apr. 21, 2009) (in striking affirmative defenses, the court held that the "proposed amended pleading offered by Defendants in this case is the very essence of boilerplate labels and conclusions which the court in Twombly found insufficient. I conclude that the Supreme Court has established a general standard of pleadings matters upon which the pleader assumes the burden of proof."); Gibson v. Officemax, Inc., 2009 U.S. Dist. LEXIS 127111 (W.D. Okla. Jan. 30, 2009) (unpublished) ("[T]his Court holds that affirmative defenses other than the failure to mitigate damages are subject to the pleading requirements of Rule 8, F.R.Civ.P. and Bell Atlantic Corp[.] v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)... Thus, unless the factual basis for an affirmative defense is clear from the face of the complaint, e.g., where the claim asserted is clearly barred by the applicable statute of limitations, in which case the mere statement that the claim is barred by that statute is sufficient, a defendant must allege a sufficient factual basis or bases for his or its affirmative defense to show that the defense is plausibly viable on its face or sufficient factual matter from which a court can infer potential viability."); Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., 531 F.Supp. 2d 620, 623 (S.D.N.Y. 2008) (the "Second Circuit has ... held that affirmative defenses which amount to nothing more than mere conclusions of law and are not warranted by any asserted facts have no efficacy"); Greenheck Fan Corp. v. Loren Cook Co., 2008 U.S. Dist. LEXIS 75147 (W.D. Wis. 2008) (extending Twombly to affirmative defenses); Safeco Ins. Co. of Am. v. O'Hara Corp., 2008 U.S. Dist. LEXIS 48399 at *1 (E.D. Mich. June 25, 2008) (Twombly standards apply to affirmative defenses); Stoffels ex rel. SBC Tel. Concession Plan v. SBC Commc'ns, Inc., 2008 U.S. Dist. LEXIS 83135 (W.D. Tex. 2008) (extending Twombly to affirmative defenses); T-Mobile USA, Inc. v. Wireless Exclusive USA, LLC, 2008 U.S. Dist. LEXIS 50165 *5 (N.D. Tex. 2008) ("An affirmative defense is subject to the same pleading requirements as is the complaint" and thus "formulaic recitation of the elements of [the affirmative defense] will not do."); Holtzman v. B/E Aerospace, Inc., 2008 U.S. Dist. LEXIS 42630 *6 (S.D. Fla. May 28, 2008) (concluding that the "same logic [of Twombly] holds true for pleading affirmative defenses - without alleging facts as part of the affirmative defenses, Plaintiff cannot prepare adequately to respond to those defenses"); Home Mgmt. Solutions, Inc. v. Prescient, Inc., 2007 U.S. Dist. LEXIS 61608 (S.D. Fla. 2007) (extending Twombly to affirmative defenses); United States v. Quadrini, 2007 U.S. Dist. LEXIS 89722, at *4 (E.D. Mich. Dec. 6, 2007) (holding that Twombly's plausibility standard applies to affirmative defenses).

 

But see Holdbrook v. Saia Motor Freight Line, LLC, 2010 U.S. Dist. LEXIS 29377 (D. Colo. Mar. 8, 2010) (holding that Twombly and Iqbal are no the standard for affirmative defenses); Charleswell v. Chase Manhattan Bank, N.A., 2009 U.S. Dist. LEXIS 116358 (D. V.I. Dec. 8, 2009) ("This Court concludes that the pleading standards articulated in Twombly and Iqbal do not extend to affirmative defenses. Twombly interpreted Rule 8(a)(2), which states that a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).  Rule 8(c)(1), which provides for affirmative defenses, states only that "a party must affirmatively state any avoidance or affirmative defense." Fed. R. Civ. P. 8(c)(1). There is no requirement under Rule 8(c) that a defendant "show" any facts at all. Thus, the Court rejects plaintiffs' arguments on this issue."); First Nat'l Ins. Co. of Am. v. Camps Servs., Ltd., 2009 U.S. Dist. LEXIS 149, at *4-5 (E.D. Mich. 2009) (holding that Twombly is not the standard for affirmative defenses); First Nat'l Ins. Co. of Am. v. Professional Pool Techs, LLC, 2009 U.S. Dist. LEXIS 149, at *5 (E.D. Mich. 2009) (holding that "Twombly's analysis of the 'short and plain statement' requirement of Rule 8(a) is inapplicable to [motions to strike affirmative defenses]"); Romantine v. CH2M Hill Eng'rs, Inc., 2009 U.S. Dist. LEXIS 98699, *1 (W.D. Pa. Oct. 23, 2009) (declining to apply Twombly to either affirmative or negative defenses); Am. Resources. Ins. Co. v. Evoleno Co., LLC, 2007 U.S. Dist. LEXIS 55181 at n. 7 (S.D. Ala. 2007) (holding that Twombly is not the standard for affirmative defenses); Westbrook v. Paragon Sys., Inc., 2007 U.S. Dist. LEXIS 88490, at *1-*3 (S.D. Ala. Nov. 29, 2007) (refusing to apply Twombly to a motion to strike affirmative defenses by distinguishing Rule 8(c) from Rule 8(a); holding that Twombly's plausibility standard does not apply to affirmative defenses).

 

By Edwin S. Hopson

On July 6, 2010, the National Labor Relations Board (“NLRB”) celebrated 75 years of its existence as the federal agency tasked with enforcing the National Labor Relations Act (“NLRA”).  The primary law governing relations between employers and employees in the private sector was signed into law by President Franklin D. Roosevelt on July 5, 1935.

 

In a signing statement, President Roosevelt stated at the time that the NLRA sought to achieve "common justice and economic advance." In its July 6, 2010, press release noting the occasion, the NLRB stated that “[s]ince then, through the Second World War and the economic growth and challenges that followed, millions of employees have voted in NLRB-conducted workplace elections and millions more have bargained collectively with their employers under the NLRB’s protection.”

 

According to that same press release, the NLRB noted that “[i]n fiscal year 2009 alone, the Agency conducted 1.690 representation elections, received 22,941 charges of unfair labor practices, recovered more than $77 million in back pay and ensured that more than 1,500 wrongfully discharged employees were offered reinstatement to their jobs.”

 

The NLRB has also put up a commemorative website (http://www.nlrb.gov/75th/index.html) that has links to YouTube, and will sponsor events across the country, culminating in a two-day symposium in late October, 2010, in Washington, D.C. on the NLRA’s legacy and prospects for its future, co-sponsored by the NLRB and the George Washington University School of Law.

By Douglas B. Huron

Mr. Douglas B. Huron, who began his legal career in 1970 trying cases of employment discrimination with the Employment Litigation Section of the Civil Rights Division of the Department of Justice, recently spoke at a conference at American University Law School on the history and accomplishments of the Section, which for many years was headed by Fellow David Rose.  Here are Mr. Huron's remarks:  

The Early Days of Title VII Enforcement

More than anything else, today is a tribute to Dave Rose.  That is appropriate for many reasons.  Not only for his unparalleled leadership in advancing fair employment, but also for his work training young lawyers to emulate him – and to be diligent, thoughtful and unflappable.  I’m indebted to Dave in a host of ways.

I’m speaking last on this panel, because this is a segue to the panel after lunch, which deals with police and fire cases and the testing guidelines, among other things.  Of course, the trigger for the guidelines was the Supreme Court’s decision in Griggs versus Duke Power.  And my first assignment from Dave, after I started in July 1970, was to write the legislative history of section 703(h) of Title VII for the Solicitor General’s brief in Griggs.  And to do that, I had to read the legislative history of the Senate debate on what became the Civil Rights Act of 1964.  Today, the debate is probably easily searchable.  But this was the era before computers, so I had to read all the debate, to make sure I wasn’t missing something.

Congress stood tall back then.  And no one stood taller than Hubert Humphrey of Minnesota, the floor leader for the civil rights bill for the Democratic majority in the Senate.  Humphrey was everywhere, answering questions about the bill’s provisions, responding to quorum calls, cajoling the Republican leader, Everett Dirksen, and finally bringing him around.  And in the end, Humphrey orchestrated the vote breaking the Southern filibuster.  That was harder in those days, because back then it took two-thirds of the Senate – 67 votes – not 60.  Humphrey wasn’t taking chances.  And on the day of the vote, Senator Clair Engle of California, was wheeled into the Senate chamber on his deathbed, unable to speak, and voted “aye” by pointing to his eye.

Humphrey was masterful as the winter of ‘64 turned to spring, and finally to summer, when the Civil Rights Act of 1964 passed and was signed.  He was at the peak of his powers.  That came through the normally dry legislative history.  But something else came through, too – the seeds of Humphrey’s downfall four years later, in 1968.  Two lonely Senators repeatedly interrupted the debate -- Wayne Morse of Oregon and Ernest Gruening of Alaska.  Addressing the chair, they would ask, “Mr. President, what about the war in Vietnam?”

On the Monday after New Year’s Day in 1972, January 3, the Alabama NAACP sued the Alabama state troopers in Montgomery, the seat of the Middle District of Alabama, which had only one judge, Frank Johnson.  The troopers had never had a black officer and were the instrument used by governors such as George Wallace to enforce segregation.  Judge Johnson, in contrast, had been desegregating Alabama institutions even since he was first appointed by President Eisenhower.  In 1956, he and Fifth Circuit Judge Richard Rives formed the majority on a three-judge district court that struck down the Montgomery ordinance requiring segregation on buses, against which Rosa Parks and a young pastor, Martin Luther King, Jr., led a boycott.

In early 1972, Title VII did not yet cover state and local agencies, so the trooper suit was brought under section 1983 and the Fourteenth Amendment.  And there was no law allowing the Attorney General to enforce the amendment’s equal protection guarantee.  But I’m convinced that Judge Johnson knew what he wanted to do with the state troopers.  And to do it, he needed a solid record, so he appointed the United States as amicus curiae, with all the rights of a party.

It turned out that the United States, meant me.  I had done some enforcement work on the Frazer case against the Alabama merit system, which Dave talked about and which he tried before Judge Johnson.  And Dave sent me to Montgomery, along with a research analyst, Helen Lom.  Like the other research analysts in the Section, Helen was extraordinary.

The private plaintiffs, the Alabama NAACP and a rejected applicant, were represented by Morris Dees, a self-made millionaire in the direct mail business and the founder of the Southern Poverty Law Center in Montgomery.  Four years later, in 1976, Morris was the chief fundraiser for an obscure ex-governor of Georgia who was running for President.  And he prevailed on me to leave the Division and join the Carter campaign.  But that’s another story.

The troopers were about to hire a class in January 1972, and Morris moved for a preliminary injunction.  Judge Johnson set it down for early February, which meant that Helen and I had about three weeks to prepare, including finding an expert in police testing.

The hearing itself went fairly smoothly, the only glitch coming when I momentarily could not find an exhibit Judge Johnson wanted to see.  He bellowed, “I want that exhibit, and I want it now!”  Needless to say, he got it.

At the end of the hearing, Judge Johnson said he would issue a ruling soon.  At that point, Walter Allen, the head of the trooper force, spoke up.  He said that the state desperately needed to hire more troopers, so he pleaded with the judge to rule quickly.   “Well,” replied Judge Johnson, “I can tell you what I’m going to do.”  And he hit the state between the eyes.

Alabama had unconstitutionally excluded blacks from the position of state trooper, he said.  And from now on, the state would be required to hire one black trooper for every white hired, until the trooper force was 25 percent black.  That was exactly the relief requested by the United States.  But as I said, Judge Johnson was way ahead of us.

In the Employment Section, when I was there, there was one word that we were forbidden to use.  That word was quota.  We never asked for quotas.  Maybe goals, or if we were feeling especially daring, affirmative hiring ratios.  But not quotas.

You know the old saw -- if it looks like a duck, and quacks like a duck, then it’s probably a duck.  Well, what Frank Johnson did to the Alabama state troopers sure as hell quacked like a quota.

We used to say that quotas were rigid and inflexible, unlike goals, which were always subject to the availability of qualified applicants.  But can you imagine what Judge Johnson would have done if somebody told him there weren’t enough qualified African Americans to meet his order? “Qualified blacks are out there,” he told Walter Allen when he ruled from the bench.  “I want you to find them.”

The old Fifth Circuit certainly understood that Judge Johnson had imposed a quota on state trooper hiring.  The court sustained, and I’m quoting, “the conclusion of the district judge that quota relief was essential to make meaningful progress towards eliminating the unconstitutional practices and to overcome the patrol's thirty-seven year reputation as an all-white organization.”

I argued the appeal in New Orleans, and Dave went down with me, probably to make sure that the word quota never passed my lips.  And it never did.  But today, I’m proud that I had a small role in supporting Judge Johnson’s imposition of a quota.  Within a decade, the Alabama troopers had more African American officers than any highway patrol in the country.

I’ve talked about two monumental figures in civil rights history – Senator Hubert Humphrey and Judge Frank Johnson.  But I’d be remiss if I didn’t mention another person, one who is known mainly to the people gathered here – my dear friend Jack Davis, dead these many years. 

I got to know Jack working on the Newark building trades case in the early ‘70’s.  I saw him bluff the business manager of an Ironworkers local in a deposition, making the guy believe Jack had incriminating documents.  Then he utterly destroyed him.

I had many friends in the Division, but Jack was the closest.  Vicki alluded to this – that people in the Division, and especially the Section, liked to have a good time.  None more so than Jack.  One night, he and Yvonne Betts, who was also in Newark for a while, helped me integrate a club in the heart of the city.  As I recall, one of the performers at the club was some guy who called himself Prince Voodoo.  He had a rubber snake around his neck, and he was mumbling some curses.  At one point, Prince Voodoo threw the rubber snake to the floor.  And that sucker started slithering.  Yvonne screamed – and jumped into Jack’s lap.  I think I might have spilled some of my beer, too.

Let me say thank you to Senator Humphrey.  And to Judge Johnson.  And a special thanks to Jack Davis, who was the best of what we had in the Division.

Thank you for your attention.

- Doug Huron

By Robert B. Fitzpatrick

On June 14, a unanimous Supreme Court handed down its long-awaited decision in Astrue v. Ratliff, 2010 U.S. LEXIS 4763 (June 14, 2010), available here.  Justice Thomas wrote the opinion for the unanimous Court and I will discuss it momentarily.  Justice Sotomayor wrote an interesting concurrence joined only by Justices Stevens and Ginsburg.  Interestingly, Justice Souter did not join the concurrence.  The question at issue was whether the federal government could obtain an offset against a Social Security claimant’s award of attorneys’ fees in order to satisfy the claimant’s pre-existing debt to the federal government.  All Justices agreed with Justice Thomas’s textual analysis, which concluded that the fee award belongs to the litigant, not the lawyer, and thus the Equal Access to Justice Act (EAJA) fee award to a prevailing party, is an award to the claimant; is the property of the claimant; and may be monies that the government can secure to offset a debt that claimant has to it.

Nowhere in Justice Thomas’s opinion is there any mention of what effect the Court’s opinion may have on the willingness of lawyers to represent Social Security claimants going forward.  It is that matter that engages Justice Sotomayor who, in her concurring opinion, comes close to advocating that the Congress legislatively overrule the Court’s decision.  She decried the fact that “today’s decision will make it more difficult for the neediest litigants to find attorneys to represent them in cases against the Government.”  And, goes on to state:  “I ‘find it difficult to ascribe to Congress an intent to throw’ an EAJA litigant ‘a lifeline that it knew was a foot short . . . Given the anomalous nature of this result, and its frustrations of the very purposes behind the EAJA itself, Congress cannot lightly be assumed to have intended it.’”   

It is noteworthy that Justice Sotomayor’s sentiments regarding the need to incentivize attorneys to represent individuals who otherwise could not obtain representation, has quite recently been echoed by Judge Wilkinson of the Fourth Circuit, a judge whom many on the left have pilloried for years because of his judicial philosophy.  In In re Abrams & Abrams, P.A.; St. Martin, Williams and Bourque, 2010 U.S. App. LEXIS 10071 (4th Cir. May 18, 2010), available here , Judge Wilkinson, in reversing a district judge who had slashed a one-third contingency fee to “a mere 3%” of an $18 million personal injury settlement, stated that “contingency fees provide access to counsel for individuals who would otherwise have difficulty obtaining representation.”  Further, Judge Wilkinson states:  “As an advocate before the Kentucky Supreme Court noted as early as 1823, in the absence of contingency fees a client ‘may not have anything else to give, and without the aid of the matter in the contest, he can never sue for his right, not having otherwise the means to employ counsel’ (Rust v. Larue, 14 Ky. (4 Litt.) 411, 421 (1823) (quoted in Peter Karsten, Enabling the Poor to Have Their Day in Court:  The Sanctioning of Contingency Fee Contracts, a History to 1940, 47 DePaul L. Rev. 231, 238 (1998)).”

By Edwin S. Hopson

In a July 1, 2010, press release the National Labor Relations Board announced how it planned to deal with the nearly 600 cases decided between January 1, 2008 and April 5, 2010 when there were only two members of the five-member Board in office, a process that was nullified on June 17, 2010, by the U.S. Supreme Court in New Process Steel v. NLRB, 560 U.S. ____ (2010).

 

According to the NLRB, at the time of the Supreme Court’s decision, 96 of the two-member decisions were pending on appeal – six at the Supreme Court and 90 in various U.S. Circuit Courts of Appeals. The NLRB is in the process of seeking to have these cases remanded to the Board.  Each such case will then be considered by a three-member panel of the Board which will include Chairman Liebman and Board Member Schaumber. Additionally, consistent with its prior practice, the two other Board members not on the panel will have the opportunity to participate in the case if they so desire.

 

The NLRB stated also that “[i]t is unclear at this time how many of the two-member Board rulings not already challenged in the federal appellate courts can or will be contested and how many may now be moot."

 

In addition, as noted in the Supreme Court’s decision in New Process Steel v. NLRB, the Board had also delegated certain of its authority to the Board’s General Counsel who acted upon that delegation during the 27 month two-Member Board period. According to an NLRB July 8, 2010, press release, the December 2007 delegation had provided “the General Counsel full and final authority on behalf of the Board to initiate and prosecute injunction proceedings under Section 10(j), or Section 10(e) and (f) of the National Labor Relations Act, contempt proceedings pertaining to the enforcement of or compliance with any order of the Board, and any other court litigation that would otherwise require Board authorization; and to institute and conduct appeals to the Supreme Court by writ of error or on petition for certiorari.”

 

In order to address any concern over whether the delegation to General Counsel Meisburg was legally effective, the newly constituted five-Member Board on July 7, 2010, according to a Board press release, ratified the December 2007 temporary delegation.  The Board in its press release stated:  “[a]lthough we believe that the court litigation delegation has always been valid, this ratification is intended to remove any question that has arisen or may arise regarding this delegation. Accordingly, the Board hereby ratifies the court litigation authority of the General Counsel described in the December 28, 2007 delegation.”

 

Finally, on July 7, 2010, the Board also “ratified all personnel, administrative, and procurement actions taken by the two Members during the 27-month period, including but not limited to appointments of Regional Directors, Administrative Law Judges, and Senior Executives.”

 

 

By Robert Fitzpatrick

There is an open question as to whether the “but for” causation standard in ADEA cases, as set forth in the Supreme Court’s opinion in Gross v. FBL Financial Services, Inc., also applies in the context of FMLA litigation.  Those post-Gross FMLA decisions that we have been able to identify reflect a circuit split, with the Sixth Circuit adhering to its position that mixed-motive analysis remains viable in FMLA retaliation cases (See Hunter v. Valley View Local Schools, 579 F.3d 688 (6th Cir. 2009)); whereas the Seventh Circuit arrived at a contrary result, finding that Gross but-for analysis applies (See Serafinn v. Local 722, Int’l Bhd. Of Teamsters, 2010 U.S. App. LEXIS 5279 (7th Cir. 2010); Rasic v. City of Northlake, 2009 U.S. Dist. LEXIS 88651 (N.D. Ill. 2009)).

In a recent opinion from the United States District Court for the District of Columbia, Breeden v. Novartis Pharmaceuticals Corp. (copy available here), Judge Robertson was confronted with not an issue of liability, the issue presented in Gross and its progeny, but rather he was presented with an issue of damages under the FMLA and the sufficiency of plaintiff’s evidence in light of the statutory language of the FMLA, which states: “[t]he employer is liable only for compensation and benefits lost ‘by reason of the violation,’ [or] for other monetary losses sustained ‘as a direct result of the violation’.” 29 U.S.C. § 2617(a)(1)(A)(i)(I).  Interestingly, in the briefing to the court on this issue, the defense relied entirely on post-Gross cases construing the phrase “for opposing any practice made unlawful” by the FMLA contained in § 2615(a)(2) (emphasis added).  None of the briefs focused on the phraseology “by reason of the violation” contained in § 2617(a)(1)(A)(i)(I).

Nonetheless, Judge Robertson instead focused on the remedial / damages language of the FMLA, and its particular phrase “by reason of.”  Focusing on that phrase, Judge Robertson was led to a series of cases under various other federal statutes with identical phraseology that have been construed to require not only so-called factual causation (but-for causation), but also legal causation (proximate causation).  See Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 265-68 (1992) (RICO civil suits); Associated Gen. Contractors v. Cal. State Council of Carpenters, 459 U.S. 519, 531-36 (1983) (Clayton Act § 4); Loeb v. Eastman Kodak Co., 183 F. 704, 709-10 (3rd Cir. 1910) (Sherman Act § 7); Rothstein v. UBS AG, 647 F. Supp. 2d 292, 295 (S.D.N.Y. 2009) (Anti-Terrorism Act); but see Boim v. Holy Land Found. for Relief & Development, 549 F.3d 689, 695-98 (7th Cir. 2008) (en banc) (adopting “relaxed” causation standard, based on policy considerations, for Anti-Terrorism Act).

Plaintiff (Breeden) was a sales rep for Novartis.  At the time in 2005 when Plaintiff went on an FMLA leave on account of a pregnancy, Novartis realigned her sales force and assigned a smaller territory to her.  She complained about the realignment, and a supervisor assured her that she would be “made whole” upon her return to work.  But, when she returned, there was no change in her diminished sales territory.  Despite that fact, her merit-based income was greater than it had been before the realignment, and her “sales rank” among her peers improved.  In 2008, there was yet another realignment, and Plaintiff’s territory was merged with that of another sales rep.  Plaintiff, whose territory was the smaller of the two, was declared redundant and terminated.

Plaintiff claimed that the unlawful acts were the 2005 realignment and the company’s failure to restore her pre-FMLA leave customer base.  She claimed that her termination, which occurred three years thereafter in 2008, was as a result of these violations.  Focusing on the statutory language “by reason of,” Judge Robertson found that Plaintiff’s evidence was not legally sufficient to satisfy that standard.  In his opinion of May 26th, Judge Robertson briefly discussed two approaches to “proximate cause”, the ex-ante perspective, and the ex-post perspective, citing Prosser.  As the newer lawyers will vividly recall and the older lawyers will only vaguely recall, the ex-ante perspective asks whether the harm was reasonably foreseeable by the wrongdoer at the time of the wrongful act, and the ex-post perspective asks whether the harm was a direct result of the wrongful act.  Judge Robertson ruled as follows: “Regardless of which approach is taken, the record of this case does not contain legally sufficient evidentiary basis for a reasonable jury to find that Novartis’ 2005 realignment was the proximate cause of Breeden’s termination in 2008.”  Indeed, Judge Robertson goes on to state as follows: “If the record establishes anything, indeed, it is that the 2005 and 2008 realignments were completely disconnected from one another… there is no evidence that the 2008 realignment was foreseeable from 2005 (ex ante), and because the 2008 realignment was a substantial intervening cause, Breeden’s termination cannot be said to have been the direct result (ex post) of the 2005 realignment…” (footnote omitted).

A reading of the cases cited by Judge Robertson finds one catapulted back to the first year of law school.  For example, Holmes v. Sec. Investor Prot. Corp., a RICO opinion, authored by Justice Souter, has extended discussion of “proximate cause” with citation to Prosser.  Justice Stevens’ opinion in Associated Gen. Contractors also has extensive discussion of proximate cause even with citation to every law student’s nightmare – Palsgraf!  And, Judge Posner’s opinion in Boim discusses necessary causation, sufficient causation, the two fires hypothetical that every law student suffered through, and every law student’s favorite torts case, Summers v. Tice, 33 Cal. 2d 80, 199 P. 2d 1 (Cal. 1948).  In light of the extended discussion of proximate cause, it may be wise for counsel to call the trial courts’ attention to Justice Ginsburg’s recent admonition in her concurring opinion in Norfolk Southern Ry. V. Sorrell, 549 U.S. 158, 179 (Ginsburg, J. concurring):

If the term “proximate cause” is confounding to jurists, it is even more bewildering to jurors.  Nothing in today’s opinion should encourage courts to use “proximate cause,” or any term like it, in jury instructions.  “[L]egal concepts such as ‘proximate cause’ and ‘foreseeability’ are best left to arguments between attorneys for consideration by judges or justices; they are not terms which are properly submitted to a lay jury, and when submitted can only serve to confuse jurors and distract them from deciding cases based on their merits.”  Busta v. Columbus Hospital Corp., 276 Mont. 342, 371, 916 P.2d 122, 139 (1996).  Accord Mitchell v. Gonzales, 54 Cal.3d 1041, 1050, 1 Cal. Rptr. 2d 913, 819 P.2d 872, 877 (1991) (“It is reasonably likely that when jurors hear the term 'proximate cause' they may misunderstand its meaning.”).  See also Stapleton, Legal Cause: Cause-in-Fact and the Scope of Liability for Consequences, 54 Vand. L. Rev. 941, 987 (2001) (“[T]he inadequacy and vagueness of jury instructions on 'proximate cause' is notorious.”); Cork, A Better Orientation for Jury Instructions, 54 Mercer L. Rev. 1, 53-54 (2002) (criticizing Georgia's jury instruction on proximate cause as incomprehensible); Steele & Thornburg, Jury Instructions: A Persistent Failure to Communicate, 67 N. C. L. Rev. 77 (1988) (demonstrating juror confusion about proximate-cause instructions).

By Edwin S. Hopson

The U.S. Supreme Court on June 21, 2010, in a 5 to 4 decision in Rent-A-Center, West, Inc. v. Antonio Jackson, 561 U.S. ____ (2010), expanded the reach of clauses in arbitration agreements that provide for the arbitrator to resolve questions of arbitrability when the challenge is to the enforceability of the entire agreement.

 

Antonio Jackson filed an employment-discrimination lawsuit under 42 U. S. C. §1981 against his former employer, Rent-A-Center, in the U. S. District Court for the District of Nevada.  Rent-A-Center filed a motion based on the Federal Arbitration Act, 9 U. S. C. §§1–16 (“FAA”) to dismiss or stay the proceedings in federal court and compel arbitration, claiming that the Mutual Agreement to Arbitrate Claims (“Agreement”) Jackson had signed when he became employed precluded his suit from being pursued in court. The Agreement provided for arbitration of all claims arising out of his employment including discrimination claims.  It also stated that,

 

[t]he Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable. Slip Opinion, pages 1-2.

 

Jackson contended that the Agreement in its entirety was unenforceable by virtue of its being unconscionable under Nevada law.  Rent-A-Center in opposition asserted that the exclusive authority to resolve any dispute about enforceability was vested in the arbitrator in the above quoted “delegation” clause.  The district court granted Rent-A-Center’s motion to dismiss the case and to compel arbitration, finding that the arbitrator had the exclusive authority to decide whether the Agreement is enforceable in the first instance.  The district court also noted that if it were to have examined the merits of Jackson’s unconscionability claims, it would have rejected one of them, namely Jackson’s contention that the splitting of the arbitrator’s fees was unconscionable under Nevada law.  With one dissent, the U.S. Court of Appeals for the Ninth Circuit reversed in part, affirmed in part, and remanded the case to district court, holding that where one party contends the agreement to arbitrate is unconscionable, the district court must make the threshold decision as to whether the dispute is arbitrable.  The court of appeals affirmed the district court’s conclusion that the fee-sharing provision was not substantively unconscionable under Nevada law.  The dissenting judge contended that the question of enforceability should have been sent to the arbitrator for decision.  Id., pages 2-3.

 

In an opinion by Justice Scalia, joined in by Chief Justice, Roberts, and Justices Kennedy, Thomas and Alitto, the court’s majority held that Jackson’s challenge to the entire agreement based on unconscionability grounds should have been decided by the arbitrator, not a federal district court.  In doing so, it cited section 2 of the FAA, which states in pertinent part:

 

A written provision in … a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract … shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.  9 U. S. C. §2.

 

Justice Scalia noted that “[t]he FAA reflects the fundamental principle that arbitration is a matter of contract.”  Id., page 3.  He went on to state that, like any contract, an arbitration agreement can be invalidated on typical contract defenses such as fraud, duress or unconscionability, citing Doctor’s Associates, Inc. v. Casarotto, 517 U. S. 681, 687 (1996).  The process for engaging in such challenges under the FAA lies in its sections 3 and 4.  Id., page 4.

 

Here, Rent-A-Center sought enforcement of the so-called delegation clause under which the “gateway” question of arbitrability would be decided.  The majority of the court held that “[a]n agreement to arbitrate a gateway issue is simply an additional, antecedent agreement the party seeking arbitration asks the federal court to enforce, and the FAA operates on this additional arbitration agreement just as it does on any other.”  Id., page 6.  The court went on to state that the question was “whether the delegation provision is valid under §2.” Ibid.

 

In analyzing section 2 of the FAA, Justice Scalia pointed out that there were two ways to contest the validity of an agreement to arbitrate, a challenge to:  (1) the specific provision to arbitrate; and (2) the agreement as a whole.  As to ground one, he noted that if there is a challenge to the specific provision to arbitrate based on unconscionability or other proper grounds, then the court must resolve that challenge before reaching a decision on whether to compel arbitration, citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, 403–404 (1967), Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440, 444–446 (2006), and Preston v. Ferrer, 552 U. S. 346, 353–354 (2008).  Ibid.

 

However, in the instant matter, the majority held that Jackson failed to challenge, pursuant to section 2 of the FAA, the validity of the delegation provision itself; but rather challenged enforceability of the Agreement in its entirety.  Therefore, it was appropriate to enforce the Agreement’s delegation provision relating to such a challenge to the agreement as a whole and order that issue to be decided by an arbitrator. Id., pages 9-10.

 

In dissent, Justice Stevens, joined by Justices Ginsburg, Breyer and Sotomayor, argued that, under the court’s precedents including Howsam v. Dean Witter Reynolds, Inc., 537 U. S. 79, 83 (2002); see also Green Tree Financial Corp. v. Bazzle, 539 U. S. 444, 452 (2003) (plurality opinion); AT&T Technologies, Inc. v. Communications Workers, 475 U. S. 643, 649 (1986), issues of arbitrability should ordinarily in the first instance be decided by the courts unless (1) there was clear and unmistakable evidence that the parties had agreed to arbitrate questions of arbitrability, see First Options of Chicago, Inc. v. Kaplan, 514 U. S. 938, 944 (1995), or (2) “when the validity of an arbitration agreement depends exclusively on the validity of the substantive contract of which it is a part.” Dissent, page 2-5.

 

The dissenting Justices asserted that since Jackson claimed the entire agreement (of which the delegation clause was a part) was unconscionable, then, if successful, nothing would remain to be arbitrated.  Therefore, it was for the district court to decide the gateway issue of arbitrability.  Id., page 10.

 

In sum, Justice Stevens stated:

 

Prima Paint and its progeny allow a court to pluck from a potentially invalid contract a potentially valid arbitration agreement. Today the Court adds a new layer of severability—something akin to Russian nesting dolls—into the mix: Courts may now pluck from a potentially invalid arbitration agreement even narrower provisions that refer particular arbitrability disputes to an arbitrator.

 

He went on to argue “I do not think an agreement to arbitrate can ever manifest a clear and unmistakable intent to arbitrate its own validity.” Ibid.

By Edwin S. Hopson

On June 17, 2010, in New Process Steel, LP v. NLRB, 560 U.S. ____ (2010), the U.S. Supreme Court, in a 5 to 4 decision, ruled that the National Labor Relations Board (“NLRB” or “Board”) could not operate as a two-member Board due to vacancies which reduced its number from five members to two.  The majority opinion by Justice Stevens was joined in by Chief Justice Roberts, and Justices Scalia, Thomas and Alito.  Justice Kennedy wrote a dissent in which Justices Ginsberg, Breyer and Sotomayor joined.

 

After Democrats swept back into power and control of the Senate in 2006, President Bush ran into difficulty winning Senate confirmation of NLRB nominees.  Therefore, he began making recess appointments to the Board.  Senate Majority Leader Harry Reid, in an effort to stop recess appointments by Bush, declared in mid-November 2007, that he would not recess the Senate when it would normally break for holiday periods.  See http://www.cbsnews.com/stories/2007/11/16/politics/politico/thecrypt/main3516002.shtml.  This did not stop recess appointments from expiring, however.  See http://www.senate.gov/CRSReports/crs-publish.cfm?pid='0DP%2BP%5CW%3B%20P%20%20%0A.

 

At the end of December, 2007, the Board consisted of four members, two of whom were recess appointments.  When it appeared that the Board would be reduced from four members to two due to vacancies occasioned by expiring recess appointments, the four Board members delegated their authority to a three member panel consisting of Members Liebman, Schaumber and Kirsanow, although Kirsanow’s recess appointment was about to expire.  It was believed that although Kirsanow was about to depart, that the remaining two members were a quorum of the three member panel to which the delegation had been made.  This was based primarily on an opinion from the Office of Legal Counsel of the U.S. Department of Justice, although there was limited past practice of the Board operating with only two members for a short period.  The four member Board also delegated the Board’s authority to authorize certain litigation to the Board’s General Counsel.  That delegation was not under review by the Supreme Court in the instant case. Id., slip opinion, pages 1-3.

 

Over the next 27 months, the Board operated with only two members and issued close to 600 cases.  Id., slip opinion, page 3.  The validity of those decisions appears now to be nonexistent.

 

The majority construed Section 3(b) of the National Labor Relations Act to permit two member Board decisions only when the three member panel was reduced to two based on disqualification rather than vacancy. Id., slip opinion, pages 4-14.

 

Section 3(b) of the National Labor Relations Act, 29 U. S. C. §153(b), states in pertinent part:

 

The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. * * * A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof. * * *

 

Justice Stevens explained that the first sentence of section 3(b) expressly authorized the NLRB to delegate its powers only to a “group of three or more members.” He also stated that this clause is best read to require that the delegee group maintain a membership of at least three in order for the delegation to remain valid.  He went on to note that is the only way to harmonize all of section 3(b) regarding delegation, vacancies, quorum requirements and the group quorum provision was to require that at all times at least three Board members be in office in order to function.  Justice Stevens recognized that in a particular case one of a three member panel might be disqualified but that the other two could still function and render a decision. Id., slip opinion, pages 5-6.

 

The majority were troubled by the Government’s reading of section 3(b) which would all the Board to act ad infinitum with only two members, in essence allowing the three member quorum requirement to be permanently undercut.  They also stated that had Congress intended to authorize two members to act as a quorum for the Board on an ongoing basis it had had the opportunity to legislate language to that effect but had not. Id., slip opinion, pages 4–9.

 

Justice Stevens concluded the opinion by stating:

 

Section 3(b), as it currently exists, does not authorize the Board to create a tail that would not only wag the dog, but would continue to wag after the dog died. Id., slip opinion, page 14.

 

In dissent, Justice Kennedy primarily argued that the case turned on the text of the statute which in his view did not support the holding of the Court.  He asserted that a vacancy in a delegee group should not “void the initial delegation” relying upon Nguyen v. United States, 539 U. S. 69, 82 (2003) (concerning vacancies in three-member panels of the courts of appeals).  He also pointed out the specific language of section 3(b), which provided: “A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board.”  Id., dissent slip opinion, page 3.

 

How the NLRB will deal with the almost 600 cases rendered invalidly decided remains to be seen.  It is also possible that the Board’s December 2007 delegation to the General Counsel of certain authority to litigate cases under the NLRA may now be also challenged.  See dissent slip opinion, page 13.