HR and the Courts: Recent Rulings on Free Speech, Class Action Pension Litigation, Disability and Religious Discrimination

Each month, CUPA-HR General Counsel Ira Shepard provides an overview of some labor and employment law cases and regulatory actions with implications for the higher ed workplace. Here’s the latest from Ira:

Class Action Pension Litigation Partially Dismissed in NYU Case
To date, 16 prominent universities have been sued separately in federal districts throughout the United States over alleged fiduciary violations, ranging from too many investment choices to exorbitant recordkeeping fees and a host of other allegations, under the Employee Retirement Income Security Act (ERISA) in the administration of their pension plans.

Now, New York University (NYU) has convinced a federal district court judge to dismiss the part of the case which alleged that it violated its fiduciary responsibility to plan participants under ERISA by offering too many investment options (Sacerdote v. NYU (2017 BL 299499, SDNY No. 1-16-cv-06284-KBF, 8/25/17)). NYU had allegedly offered more than 100 investment options to plan participants.

This case may have implications for a similar one pending against Columbia University which is being tried by the same judge. It may also be persuasive precedent for other pending cases.

The judge also dismissed the plaintiffs’ claims that NYU had violated its duty of loyalty to plan participants, holding there was no evidence that NYU acted to benefit itself or others instead of plan participants. In addition, the judge dismissed the claim that NYU violated its fiduciary responsibility to plan participants by offering more expensive retail share classes instead of identical institutional share classes at lower cost. The judge recognized that the more expensive retail offerings offer “higher liquidity,” thus it was not necessarily imprudent.

Nonetheless, the judge ruled that the plaintiffs’ claims that NYU had offered more expensive and allegedly “poorly performing” actively managed funds instead of allegedly “readily available alternatives” should proceed to trial. This means that the allegation should proceed to trial, not that at this point it constituted an actual violation of ERISA.

Employee’s Sleep Apnea Disability Claim Dismissed, as the Disability Was Not Discovered Until After the Employee Faced Dismissal for Poor Attendance
The federal court of appeals for the Ninth Circuit recently affirmed the dismissal of a disability discrimination claim filed under the California state statute by an employee who suffered from sleep apnea that was not diagnosed or discovered until after he had already accrued a poor attendance record and was facing termination for violation of the employer’s work rules (Alamillo v. BNSF Railway (2017 BVL 299042, 9th Cir., No. 15-56091, 8/25/17)).

A federal district court judge had dismissed the case, finding no evidence that the company knew that any of the plaintiff’s absences were due to a disability. Moreover, the plaintiff’s allegations that the employer refused to participate in an interactive process to come to a possible accommodation of his disability failed, because the plaintiff never advised the employer of the disability or requested an accommodation while the work rule violations which led to his dismissal were occurring.

Jury Trial Set Over Whether Exemption Procedure From Mandatory Vaccination Is an Appropriate Accommodation to Religious Beliefs or Unlawful Religious Discrimination
A federal court recently ruled that the Equal Employment Opportunity Commission (EEOC)’s lawsuit against a North Carolina hospital alleging religious bias against employees who were terminated after refusing to be vaccinated against the flu on religious grounds must proceed to a jury.

The hospital had set up a procedure for requests for exemption from the flu vaccination and mandated that such requests be filed by October 1. The deadline to receive the vaccination was December 1. A number of employees filed late requests for exemption and were terminated for not following the exemption request procedure and not being vaccinated. The EEOC filed suit, alleging religious bias by the hospital, and a federal judge ruled that the suit must go to a jury trial (EEOC v. Mission Hospital (W.D.N.C. No.1:16-cv-118, 8/7/17)).

The hospital argued that there was no religious bias because the employees were terminated for not following a neutral procedure for exemption. The EEOC argued that the accommodation procedure was not reasonable, as there was a gap between the October 1 filing deadline and the December 1 vaccination deadline. The EEOC argued that the employees should have been given a “grace period” during the gap and that their exemption applications should have been considered rather than their employment being terminated. A federal district court jury will decide this issue.

Football Coach Does Not Have a First Amendment Right to Pray at Midfield After Football Game
The Ninth Circuit U.S. Court of Appeals (covering California, Oregon, Washington, Nevada, Arizona, Idaho and Montana) dismissed a high school football coach’s First Amendment claim that his rights were violated when his school district suspended him for refusing an order to stop praying at midfield at the conclusion of each football game. He sued for a preliminary injunction to allow him back to work and to continue to pray after games.

The court affirmed the school district ‘s argument that his prayers within sight and sound of students and the public was communication with students about what they should believe and that the school district had the right to regulate his communication with students. The court also ruled that his speech (prayers) in front of students was not the speech of a private citizen protected by the First Amendment, but rather the speech of a public employee, which the school district has a right to regulate (Kennedy v. Bremerton School District (2017 BL 295404, 9th Cir. No. 16-35801, 8/23/17)).

The coach is a “practicing Christian” and asserted that his prayers were private. The court rejected his claim, holding that it is part of his normal job responsibilities to communicate with students and the public and that the school district had the right to order him not to speak in the manner he was pursuing. The court also ruled that the school district’s actions were necessary to avoid violating the Constitution’s Establishment Clause, which precludes the government from establishing and/or promoting religion.

EEOC Sues After Employer Revokes Religious Exemption to Facial Hair Policy
The EEOC recently filed a retaliatory discrimination complaint in federal court following an employer’s decision to end an employee’s religious accommodation to its facial hair policy following the employee’s complaint of racial harassment by another employee (EEOC v. MVN Inc. (D. Md. No. 17-02025, comp filed 7/20/17)). The employee in question worked as a security guard and was a practicing Muslim. He had requested and was granted on religious grounds an exemption to the company’s prohibition of facial hair for its security guards

He later complained that another employee had racially harassed him by calling him a racial epithet. The day after he made his complaint, his supervisor threatened to fire him unless he shaved his beard to be in compliance with the company’s facial hair policy. He shaved in order to avoid being discharged and filed a complaint with the EEOC.

After investigation, the EEOC decided to file a lawsuit in federal district court consistent with its stated agency priority included in its latest strategic enforcement plan to combat employment discrimination against Muslim employees and people of Middle Eastern decent.