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Labor and Employment Law

ABA Public Utility, Communications and Transport Labor Committee Spring 2011 Report

by the American Bar Association Section of Public Utility



A. Title VII

1. Third Circuit Holds that Lilly Ledbetter Fair Pay Act Does Not Apply to Title VII Failure-to-Promote Claims

In Noel v. The Boeing Company [enhanced version available to subscribers / unenhanced version available from lexisONE Free Case Law], the Third Circuit held, in a case of first impression for the circuit, that the Lilly Ledbetter Fair Pay Act of 2009 ("Act") does not cover a failure-to-promote claim. In so holding, the Third Circuit sided with the D.C. Circuit, which also has held that the Act does not apply to failure-to-promote claims, making it the second circuit to hold on this issue.

Plaintiff Noel is a black Haitian national who, together with two white, non-Haitian employees, was assigned to work at Boeing's Amarillo facility in November 2002. After seven months, the two white, non-Haitian employees were promoted from Labor Grade 8 to 11; Noel, however, remained at Labor Grade 8. After complaining to his union representative and the Company's labor relations representative, Noel, in March 2005, also filed a complaint with the Equal Employment Opportunity Commission ("EEOC").Noel filed a lawsuit against Boeing in June 2006, alleging Title VII claims of intentional discrimination and disparate treatment because of his race and national origin. Noel also raised claims under state law and asked for punitive damages. Noel complained that he had been denied an opportunity for the more lucrative off-site work in May 2002, but white, non-Haitian employees who were junior to him were sent off-site. Noel also complained that while working off-site in Amarillo in 2003, his junior, white, non-Haitian coworkers were promoted to Labor Grade 11, but he was not. The district court held that Noel's failure-to-promote claim was time-barred as a matter of law and held for Boeing on every count.

On appeal, Noel argued that his failure-to-promote claim was not time-barred because Boeing's failure to promote him resulted in his earning less compensation than his coworkers, and under the Act, the clock started anew with each paycheck he received. The court determined that Noel had not pleaded a discrimination in compensation claim because he never claimed that there was a "nexus" between Boeing's failure to promote him and his resulting lower salary or that he was paid less for the same work. The court also determined that failure-to-promote claims were not covered by the Act, which by its plain language covers only compensation decisions. Although there are a number of employment decisions that may affect compensation, the court determined that Congress had intended only to include compensation discrimination claims within the scope of the Act. Thus, the Act did not revive Noel's failure-to-promote claim, and the court affirmed the grant of summary judgment to Boeing.

2. Seventh Circuit Holds that Title VII's Retaliation Provision Does Not Apply to Purely Internal Investigations and Does Not Immunize Any and All Participation

In Hatmaker v. Memorial Medical Center [enhanced version / unenhanced version], the Seventh Circuit held, in a case of first impression, that an employer's internal investigations are not covered by Title VII's participation clause, which protects from retaliation an employee who participates in official investigations made by official bodies that are authorized to enforce Title VII. In so holding, the Seventh Circuit sided with the Eighth, Ninth, and Eleventh Circuits. The Seventh Circuit further held that the clause does not protect an employee for any and all participation-for example, it would not protect an employee who, during the investigation, engages in conduct that merits termination. The Seventh Circuit, however, did not address whether an employer's internal investigation initiated after an EEOC charge has been filed would fall within the participation clause's protection.

Plaintiff Hatmaker was a part-time chaplain at Memorial Medical Center who claimed she had been fired because of her participation in a Title VII protected investigation. When the employer appointed the Reverend Stafford as acting director of the chaplain staff, Chief Human Resources Officer Hester sent an e-mail soliciting opinions of Stafford to the staff, including Hatmaker. Hatmaker responded by expressing her concerns that, among other things, Stafford "does not strike me as a spiritual statesman." After Stafford was confirmed as director, Hatmaker e-mailed Hester to express her concerns regarding his comments about, and treatment of, women. Hester began an investigation into whether Stafford had created a hostile work environment and insisted that Hatmaker participate. During her interview, Hatmaker made several "gratuitous references to Jews, Catholics, Southern Baptists, Don Imus, Al Sharpton, and Jesse Jackson." The interviewer found that Stafford had not created a hostile work environment and suggested Hester tell Hatmaker to resign if she was uncomfortable working with Stafford and not to discuss her opinions about Stafford with her coworkers. When Hatmaker responded that she would direct any future concerns to Stafford, Hester suspended her for thirty days "to put her feelings behind her," and, Hatmaker, having not put her feelings behind her, was fired at the end of the suspension.

The court held that Hatmaker was fired not for her participation in the investigation, but for her comments, bad judgment, and "preoccupation with superficial characteristics of her new boss." Moreover, the court held that even if she had not been fired because of her conduct, an employer's internal investigation is not within the scope of Title VII's participation clause, which applies to official investigations in which an employee has "made a charge, testified, assisted, or participated in any manner in an investigation." Employer investigations do not involve charges or testimony and are neither hearings nor proceedings. And, even if the investigation had been within the scope of Title VII, participation in an investigation does not immunize any and all behavior; for example, an employee who makes groundless or prejudicial accusations should not be able to cloak herself in the protection of Title VII. Finally, the court held that Hatmaker could not claim she was being retaliated against based on her opposition to Stafford's unlawful conduct because she admitted she was not accusing Stafford of discrimination, but was attempting to avoid a possible future hostile work environment. [footnotes omitted]

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