Legal Watch - February 10, 2016
February 10, 2016

By Ira Michael Shepard, CUPA-HR general counsel and partner with Saul Ewing LLP

Ninth Circuit Holds HR Director Can Pursue FLSA Retaliatory Discharge Claim, Rejecting Application of the “Manager Rule”

The U.S. Court of Appeals for the Ninth Circuit (West Coast states) reversed a trial court’s dismissal of an FLSA retaliatory discharge claim filed by an HR director, holding that she may pursue her retaliatory discharge claim against her former employer in which she claimed she was terminated because she repeatedly told her supervisors that the company was violating the FLSA (Rosenfield v. Global Tranz Enterprises Inc. (2015 BL 408552, 9TH Cir., No. 13-15292, 12/14/15)).

The plaintiff alleged that she complained to her supervisor (who had sole responsibility over FLSA compliance) orally on eight separate occasions and in writing in 27 weekly and monthly reports that the company was misclassifying employees as exempt. The plaintiff alleged that the supervisor told her that he was going to make some changes in response to her criticism. However, after the supervisor implemented changes, the plaintiff continued to complain that misclassification was still happening. When she was terminated, she alleged that these complaints were the reason. The Ninth Circuit decision was 2 to 1 with a strong dissent. The dissenting judge held in his dissent that the majority should have applied the “manager rule” adopted by four other circuit courts of appeals.

Under the “manager rule,” a manager must step out of his/her normal managerial role and take some sort of “adverse action” against the employer to be covered by the FLSA’s retaliatory discharge protections. Simply acting in his or her managerial role is not sufficient under the “manager rule.” Here, the dissent concluded that the plaintiff was acting within the “ambit of her managerial duties” in the HR department by raising her complaints to her supervisor. The majority held that it did apply the “manager rule” but that under the unique facts of the case the rule did not apply to this plaintiff. The majority reasoned that since FLSA enforcement and compliance were not part of her managerial duties, the manger rule does not apply to her case.

Transgender Discrimination Case Moves Forward Under Classic Title VII Sex Discrimination Rules and Guidelines, Including Mixed Motive Analysis

The 11th Circuit Court of Appeals applied classic Title VII sex discrimination rules to a male-to-female transgender plaintiff who claimed that she may have been fired at least in part because of her sex as a result of her decision to go forward with a sex change procedure. The court concluded that the plaintiff presented sufficient circumstantial evidence that her transgender status was a motivating factor in her employer’s decision to terminate her after she announced her gender transition (Chavez v. Credit Nation Auto Sales LLC (2016 BL 10048, 11th Cir., No. 14-14596, unpublished op, 1/14/16)). The court applied the standard “mixed motive” rules and analysis to the facts of the case.

The plaintiff had worked for the defendant as an auto mechanic. After she announced her gender transition decision, the employer was initially supportive and then allegedly began changing its position and viewed her “condition” as negative to business. The employer claimed that the plaintiff was terminated for falling asleep in a customer’s car while on duty. While the plaintiff admitted to the incident, she alleged that the employer did not follow its normal custom of progressive discipline and proceeded directly to discharge in her case. The sleeping incident and discharge came after her supervisor told her that she could no longer use the unisex restroom that other female employees used. She was also told not to wear a dress or other “outlandish” clothes to and from work. She was also asked to “tone down” her conversations with other employees about her upcoming procedures.

The 11th Circuit concluded that based on the allegations before it, the plaintiff had alleged sufficient circumstantial evidence of discrimination based on her transgender status to raise a Title VII mixed motive claim and that the case should proceed forward to a jury trial.

NLRB Declines Jurisdiction Over Carroll College Professors Seeking to Unionize on Religious and Managerial Grounds

A National Labor Relations Board (NLRB) regional director declined jurisdiction over Carroll College in Montana, whose professors were seeking to unionize, and dismissed the faculty’s representation petition, noting that the college had publicly reserved the right to discharge faculty members for “continued serious disrespect or disregard for the Catholic character or mission” of the college. He concluded that the college’s religious mission and the managerial status of the faculty precluded the NLRB from asserting jurisdiction (Carroll College (2016 BL 13370, NLRB Reg’l Dir., No. 19-RC-165133, 1/19/16)).

The regional director specifically noted that the “considerable” managerial authority of the tenured and tenure-track faculty over academic policies and programs at the college was sufficient to establish that the faculty were management employees. The faculty complement at Carroll College consisted of 90 faculty members and six administrators. The regional director’s decision seems to indicate that a college may successfully accomplish jurisdiction decline by the NLRB under the Pacific Lutheran test pointing to employment policies that link employee behavior to the college’s religious mission.

Apart from the “religious” decision, the director concluded that the faculty members covered by the union’s petition were managerial employees outside the jurisdiction of the NLRB under the Supreme Court’s decision in NLRB v. Yeshiva University (444 U.S. 672, 103 LRRM 2526 1980)).

No First Amendment Retaliatory Discharge Protection for Employee Hotline Whistleblower Performing Job Duties

A federal district court in New York dismissed a city worker’s First Amendment retaliatory discharge complaint, holding that a public employee who uses an employee environmental health and safety hotline to report a violation of his city services department lacks a protected First Amendment claim. The court noted that the plaintiff made the call using an employee hotline as an employee and not a public citizen (McGuire v. City of New York (E.D.N.Y., No. 12-814, 12/7/15)).

While the plaintiff was not a member of the city’s enforcement unit, he was a city employee nonetheless and used the private hotline created for city employees. The plaintiff argued that because he was not a member of the enforcement unit, his complaint was not part of his regular job duties. The court rejected the plaintiff’s argument, concluding that his complaint of an environmental violation related to his “core responsibilities” as a city employee. In addition, he used an official channel rather than a public forum to voice the communication. As such, it was not protected speech under the First Amendment.

SEIU Petitions to Represent 2,500 Professors, Claiming It Would Be One of the Largest Bargaining Units at Any College in the Country

The Service Employees International Union (SEIU), following up on its success in organizing adjunct faculty across the country, has filed a petition to represent a faculty bargaining unit which it claims will be one of the largest at any college in America.

SEIU Local 284 has filed a representation petition with the Minnesota Bureau of Mediation Services asking the agency to conduct a representation election for a 2,500-professor bargaining unit of tenured, tenure-track and non-tenure-track contingent faculty at the University of Minnesota’s Twin City campuses in Minneapolis and St. Paul.