GPSOLO January/February 2010
Discrimination in the Solo and Small Firm
There are both federal and state laws that deal with discrimination in the workplace. This article includes a brief overview of the federal laws, a short discussion of state law examples, and a discussion of preventive steps that you, as a solo or small firm practitioner, can take to avoid being on the receiving end of a lawsuit from a current or former employee on the grounds of discrimination.
Federal Law Regarding Discrimination
An employer’s principal obligations under federal law regarding discrimination are found in Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990 (ADA), the Equal Pay Act of 1963, and the Age Discrimination in Employment Act of 1967 (ADEA). The federal agency that is delegated responsibility to monitor compliance with these laws is the Equal Employment Opportunity Commission (EEOC). Although most states, if not all, have civil rights laws that duplicate the federal laws in many respects, usually these laws do not supersede one another. So, in order to be certain what the law requires and what a solo/small firm’s employment obligations are, all applicable laws, both federal and the applicable laws in your state, need to be examined independently.
If you, as a solo or small firm practitioner, employ 15 or more employees, you are covered by Title VII and the ADA. Title VII prohibits employers who are covered by the law from employment discrimination on the grounds of race, color, sex, religion, national origin, or pregnancy-related conditions. The ADA prohibits discrimination against a qualified disabled individual regarding any term, condition, or privilege of employment. This also covers hiring, discharge, compensation, promotion, and training. Specifically, the ADA protects individuals with mental or physical disabilities. Title VII is not strictly limited to protecting an employee because discrimination is prohibited against any individual, which could include a partner, independent contractor, or a successor.
The Equal Pay Act is under the Fair Labor Standards Act (FLSA) Section 6(b). If you are covered by the FLSA, you are subject to the Equal Pay Act. As a small firm practitioner, you are covered by the FLSA if your annual gross sales or business (exclusive of retail sales tax) is at least $500,000 and you have two or more employees engaged in either interstate commerce or the production of goods through interstate commerce or handling, selling, or otherwise working on goods or materials that are produced for interstate commerce. The Equal Pay Act requires an employer to pay equal pay for similar work requiring equal skill, effort, and responsibility.
If you have 20 or more employees, you are covered by the ADEA. The ADEA prevents discrimination against individuals who are at least 40 or older. The ADEA covers discrimination regarding hiring, firing, compensation, terms, conditions, and privileges of employment.
Sex discrimination in the workplace. Sex discrimination is covered by Title VII under federal law as well as federal common law. The EEOC has issued sex discrimination guidelines regarding their enforcement positions. Interestingly, federal courts have concluded that discrimination on the basis of sexual orientation is not included in the ban against discrimination on the basis of sex contained in Title VII. This particular form of discrimination is also not covered by the ADA. However, the EEOC and at least one decision of the Ninth Circuit have held that same-sex harassment violates Title VII.
Claims of sexual harassment are commonly asserted against employers under Title VII and applicable state statutes. Both state and federal laws recognize two types of sexual harassment claims: quid pro quo claims and hostile work environment claims. A quid pro quo harassment claim is essentially when an unwelcome request for a sexual favor or a sexual advance is a condition of employment, a promotion, or the receipt of some other employment benefit. A hostile work environment claim occurs where there is unwelcome physical, verbal, or visual conduct that is sexual and interferes with the work environment such that an individual cannot perform his or her work because of intimidation, or the work environment is too hostile or too offensive. The EEOC has its rules dealing with unlawful sex discrimination and specifically with sexual harassment under Title VII. The rules are a guide in interpreting what kind of conduct constitutes sexual harassment.
EEOC enforcement of federal laws. If a current or former employee chooses to pursue a federal claim for discrimination under Title VII, the ADEA, or the ADA, he or she must file a complaint with the EEOC to exhaust administrative remedies. When such a complaint is filed, the EEOC usually contacts the employer to discuss the allegation, especially when a right to sue letter is not immediately requested. In other words, many claimants may choose to use the EEOC to pursue the actual claim, instead of hiring an attorney to do so. If the EEOC finds, through its response from the employer and its own investigation, that there could be liability, the EEOC, with the complainant’s consent, will pursue the claim against the employer. If, however, a current or former employee retains an attorney with interest in pursuing a lawsuit, and an immediate request for a right to sue letter is made, the EEOC simply processes the complaint and immediately closes its file and issues a right to sue letter. If you receive any kind of a complaint or inquiry from the EEOC, it is imperative that you promptly and thoroughly respond to the EEOC’s request. Many times, if you are able to persuade the EEOC during its investigation that the claim has no validity, the EEOC will close the file and make a finding that there was no probable cause to pursue the claim.
When the EEOC receives a charge against an employer, it is required to notify the employer or the “respondent” within ten days after the charges are filed. The charge has to set forth the date, time, place, and circumstances of the alleged unlawful practice. The EEOC is also required to make its finding, if it is pursuing an investigation as far as practicable, within 120 days of the date the charge is filed or, if later, the date the EEOC is required to take action regarding the charge. Also, the EEOC has a work-sharing agreement with many states that also have their own administrative agency. State law claims can be pursued, and under the work-sharing agreement, when an employee or former employee files a charge with the state agency, it is deemed filed with both agencies and vice versa.
Keep in mind, however, that if you do not employ 15 or more employees in your workplace, Title VII will not factor in a sexual harassment or other form of discrimination claim. It is for these reasons that a smaller employer (an employer with less than 15 employees) is generally not subject to the federal laws that have just been briefly described in this overview.
It is also important to note that employers with fewer than 15 employees, who are ordinarily exempt from Title VII, are still subject to the Immigration Reform and Control Act of 1986 (IRCA) citizenship and natural origin discrimination rules, provided that they have at least four employees.
State Laws Prohibiting Discrimination
Although a thorough discussion of state laws is well beyond the scope of this article, the author’s home state of California will be used as an example of both state statutory schemes and common-law claims that could apply to solos and small firm practitioners, possibly rendering the practitioner liable for claims of discrimination.
Many states have their own civil rights laws consisting of statutory and, in many cases, common-law claims. In California, virtually all California employers with five or more employees are covered by the California Fair Employment and Housing Act (FEHA). The employers who are exempt from FEHA coverage are businesses and enterprises that do not regularly employ five or more persons on a full-time or part-time basis. However, the FEHA prohibitions that pertain to unlawful harassment apply to any person or business that regularly employs one or more persons, including a person who is acting as the employer’s agent. Accordingly, in California, the solo or small firm practitioner who regularly employs five or more persons on a full-time or part-time basis will be covered by the provisions of the FEHA statute, and solo and small firm practitioners who employ one or more persons will be covered by the prohibitions against unlawful harassment. Further, plaintiffs can pursue common-law causes of action such as torts for wrongful termination, constructive discharge, discrimination on protected grounds (such as those set forth in Title VII) and, in the case of California, sexual orientation, marital status, medical condition, genetic characteristics, and gender identity. Accordingly, it is imperative to have a familiarity with your respective state’s civil rights statutory scheme, if any, and common-law causes of action, which in many instances exist to cover all employers regardless of size.
Many state agencies have set forth sex discrimination guidelines. In many states it is a prerequisite to exhaust administrative remedies prior to filing a lawsuit. Once again, in the case of California, the Department of Fair Employment and Housing (DFEH) is the agency that enforces the FEHA law and the agency where an employee or former employee will commence an administrative charge with any allegations of discrimination. Much like the EEOC, the DFEH will either open a file and investigate the claim or immediately issue a right to sue letter if the employee or former employee is interested in pursuing claims in court. Because many states have a work-sharing arrangement with their agencies and the EEOC, if an employee or former employee chooses to mix state and federal law claims in a lawsuit, it is not necessary to file two separate administrative charges and obtain two separate right to sue letters to pursue a claim in either federal or state court.
State Law Sexual Harassment Claims
The most common claim that will confront an employer, including solo and small firm lawyers, is that of sexual or other forms of harassment. Sexual harassment constitutes one of the most common types of claims filed against employers under Title VII and state statutes. Sexual harassment is considered a form of unlawful sex discrimination under Title VII and most state statutes. Both the EEOC and many state agencies have issued rules that recognize sexual harassment as an unlawful form of sex discrimination. Rules broadly reference the type of conduct that constitutes sexual harassment. Employers can be held responsible for inappropriate conduct committed by their managers, supervisors, and many times by non-supervisory employees. In some states, customers, vendors, and clients who engage in inappropriate conduct toward an employee can also create liability for an employer. It is also important to recognize that the sexual harassment does not need to occur during working hours or at the workplace in order to constitute an actionable claim.
Another form of discrimination that arises out of sexual harassment claims is retaliation for complaining about sexual harassment, either internally or by pursuing a charge with either the EEOC or a state agency. An employee or former employee can also pursue attorney fees in sexual harassment cases. Additionally, some states will find the individual who engaged in inappropriate sexual harassment personally liable. These claims are not limited to statutory theories but can also be the subject of tort claims such as wrongful discharge, infliction of emotional distress, assault, battery, constructive discharge, and defamation.
It is for these reasons that it is prudent for all solo and small firm employers to have sexual harassment and other forms of harassment policy in place with procedures that can be used to address the issues that frequently arise in any size and type of work environment.
Federal law and most state law focus on measures taken by an employer to prevent harassment. Further, preventive measures undertaken pursuant to a harassment policy can protect an employer from the adverse consequences of harassment and also discourage inappropriate behavior. Policies are also helpful in preventing litigation.
It is very helpful for employers of all sizes, including solo and small firm practitioners, to have in place measures and policies that will sensitize employees regarding the prohibition against sexual harassment and other unlawful forms of harassment. It is important to have a written policy that is clearly communicated and provided to all employees, especially supervisors. The policy should be simply written; should address all forms of unlawful harassment prohibited by federal and/or state laws; should provide for a complaint procedure that does not require an employee to complain directly to his or her supervisor; and should require the prompt investigation of any complaint. A policy also should explicitly state that there will be no retaliation or reprisal for pursuing a complaint under the policy.
Another benefit of having a written policy in place is in defending a claim of hostile work environment as a form of harassment. Although such a policy does not necessarily constitute a complete defense to all of these types of claims, it may serve various useful purposes, including limiting a damages claim and showing that the policy was in place and perhaps an employee did not choose to follow it. Some of the other benefits of having a written policy include that it allows the employer to promptly respond to and investigate a claim of harassment; enables the employer to take immediate and corrective action where appropriate pursuant to a complaint; and helps the employer publicize the policy so that all employees in the workplace are aware of it. Also, a policy ensures that all managers and/or supervisors will support and follow the policy; perhaps it will prevent an award of punitive damages when the trier of fact considers that an employer has a policy in place. A policy can also show that an employer has conducted enforcement and educated its employees in good faith against harassment. Depending on the nature of the complaint, an employer can choose to provide corrective action, such as transferring an employee to a different work area or space or having the employee work on items that do not involve interaction with the alleged harasser. The employer can also discipline the alleged harasser and, depending on the nature of the harassment, consider termination of the alleged harasser as well as any other steps that are reasonably calculated to eliminate harassment.
It is important to note that harassment can be based on characteristics that are protected by both federal and state law, including race, religion, color, age, disability, national origin, and, of course, sex. Also, depending on the state, harassment laws may include harassment on the basis of sexual orientation, marital status, citizenship, or medical condition.
Many states will require the posting of policy and/or state agency and information sheets so that an employee is aware of his or her rights, not only with respect to internal policies of the employer, but also with respect to pursuing statutory and other claims covered under either federal law or state law. Although it is certainly not required, it may be helpful, depending on how many supervisors the solo or small firm practitioner employs, to provide some training for those supervisors on harassment.
It is also helpful to request that all employees sign a notice of acknowledgment and receipt of the written policy so that at some later time, should a claim or complaint of harassment arise, the employee cannot argue or state that he or she did not receive the policy, know of its existence, or follow it. It is helpful to document both the investigation of any claims and communications relating to a claim of harassment. An employer can ask an independent outside human resources consultant or office manager to conduct an investigation and collect documentation. Also, any discipline that is needed with respect to an employee who has engaged in inappropriate harassment should be fully documented. Further, in many states, harassment is found to be a basis of liability if it is initiated by a customer and/or vendor against an employee, and an investigation needs to take place to the extent it is possible, as well as efforts by you and/or your office manager to deal with the conduct.
The damages that can be assessed against an employer in a harassment claim can be substantial. They include emotional distress damages and punitive damages. In a case of harassment based on a discrimination argument, remedies can include back pay and lost benefits. Further, in many instances, both under Title VII and in many states, individuals can be personally liable for unlawful discrimination or harassment. However, under Title VII, an individual cannot be personally liable for creating a hostile environment.
Additionally, you as a solo or small firm practitioner should remain aware of the highly sensitive nature of a harassment complaint and/or investigation and keep in mind issues relating to confidentiality. Because these are usually claims that deal with the reputation or character of an employee, employment issues, and/or opportunities, promotions, etc., the greatest extent of confidentiality should be observed.
With respect to claims of constructive discharge and retaliation, the EEOC may find a constructive discharge even where an employee’s resignation was not forced by an employer or an employer did not specifically intend for this to occur. The EEOC tends to focus on whether the employer has an effective internal grievance procedure. To prove a constructive discharge claim, there need to be working conditions that are so intolerable that a reasonable person in a similar situation would have no choice but to leave his or her position.
The U.S. Supreme Court has held that an employer can assert, as a defense to a constructive discharge claim, that it has an effective sexual harassment policy for the resolution of and reporting of complaints of sexual harassment and that the employee has unreasonably failed to avail himself or herself of that preventive or remedial policy. The affirmative defense is not available if the employee quits in response to an employer-sanctioned adverse action—demoting an employee or otherwise changing the employee’s employment status.
Also, with respect to claims of harassment and retaliation, the U.S. Supreme Court has held that “simple teasing, offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the terms and conditions of employment.” This is in the context of retaliation. In order to prove a claim of retaliation, discriminatory changes in the terms and conditions of employment need to be shown.
In any event, it is helpful to put together an anti-harassment policy even for a solo and small firm practitioner that may only have common-law liability so that it will foster a more productive work environment that will prevent harassment from occurring and will engender loyalty and longevity, as well as high morale throughout the work environment.
Laura V. Farber is a partner with Hahn & Hahn LLP in Pasadena, California, and Vice Chair of the General Practice, Solo and Small Firm Division. She may be reached at firstname.lastname@example.org. This article was originally published as a chapter in Effectively Staffing Your Law Firm, edited by Jennifer J. Rose (ABA General Practice, Solo and Small Firm Division, 2009).Copyright 2010