Follow-up: Labor Dept. adds gender identity as protected class

On Monday, I posted about the slow but steady development in employment discrimination law that is expanding protection to transgendered individuals.  This week, the United States Department of Labor announced a revision to its discrimination policy that lists gender identity for the first time as a protected group.  Although the public statement did not emphasize the inclusion of gender identity but simply proclaimed a "renewed commitment to fair treatment and equal opportunity for all of its employees," the purpose of the announcement is apparently clear to transgendered advocates. 

Will class action decision have repercussions in employement law?

On Wednesday, the Supreme Court ruled that companies may include arbitration provisions in their standardized contracts that prohibit customers from pursuing any claim against the company as a class-action.  The ruling means, as a practical matter, that service agreements and many other types of contracts will increasingly include provisions that require all legal claims against the company to proceed on an individual basis.   The decision also nullifies, for now, the decision by the Massachusetts Supreme Judicial Court in 2009 that found a class-action waiver provision in a consumer contract unconscionable under state law.  The Supreme Court's AT&T opinion can be found here.

Mandatory arbitration provisions, through which the parties agree to pursue any dispute in arbitration rather than court, are common in all types of contracts.   The issue in AT&T is more specific and hotly contested.  Industries such as cable and wireless providers often insert provisions in their standard service agreements through which the customer agrees to bring any claim against the company in arbitration and only as an individual, not as a class.   Many courts and circuits have struck down the provisions over the past several years under state laws that prohibit unconscionable contractual arrangements.  (Full disclosure: I was part of the defense counsel in one such case.)  By a 5-4 vote, the Supreme Court held that the Federal Arbitration Act and the federal policy in favor of arbitration trumps state contract laws that prohibit such clauses.

The AT&T decision is significant for employment attorneys, as class action waivers will become more prevalent in all large contractual relationships.  Several federal decisions in Massachusetts have already struck down class action waivers in employment contexts.  The continuing authority of those decisions is now in doubt.

Federal judge applies Equal Protection Clause to sexual orientation discrimination

On Monday, a federal judge in Ohio ruled that a county worker could claim protection under the Fourteenth Amendment's Equal Protection Clause against employment discrimination based on sexual orientation.   The government argued that the plaintiff, a lesbian, could not assert an Equal Protection claim because Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination, does not include sexual orientation as a protected class.   The judge rejected this argument:

"Simply because Title VII does not include sexual orientation as a statutorily protected class does not, in this Court’s view, automatically remove all constitutional protection where a plaintiff employee claims equal protection violations based on her membership in that class.... Though sexual orientation may not be a suspect or quasi-suspect class, the Court finds that constitutional disparate treatment claims alleging sexual orientation discrimination by a public employer at least garner the bare minimum of rational basis review."

The decision in Hutchinson v. Cuyahoga County Board of County Commissioners could have far-reaching implications.  Sexual orientation is usually considered an unprotected class under federal law.   The fact that the judge ruled that sexual orientation only receives rational basis review certainly limits the practical import of the decision.  Nonetheless, it will be interesting to see the effect that this decision has on the development of case law on sexual orientation discrimination.

Protection for transgender employees slowly increasing

Although it does not seem to be receiving much attention, legislatures, courts, and politicians are increasingly providing protection for transgender employees against discrimination to the same extent as for other protected groups.   In February, Massachusetts Governor Deval Patrick issued two Executive Orders that banned discrimination against transgender employees in state government.  A few years ago, a transgender job applicant at the Library of Congress won a federal discrimination lawsuit when her job offer was rescinded after the Library discovered she was transgender.  Recently, Congressman Barney Frank (D-Mass) re-introduced the Employment Non-Discrimination Act that would provide protection to employees and job applicants against discrimination on the basis of sexual preference and gender identity.  This is the ninth time that Frank has introduced this bill, so its introduction is not significant in itself.  This time around, however, the ACLU and prominent business associations have expressed support for the bill.

Jury returns verdict in favor of fired executive claiming age discrimination

A federal jury recently returned a verdict in favor of a former executive from a national hotel chain who claimed that his termination was in retaliation for his complaint of age discrimination.  According to Massachusetts Lawyers Weekly, the plaintiff was fired in January 2009, after which time he was unable to find employment.  The plaintiff claimed that he was fired because of his age.  The jury returned a verdict for the defense on the discrimination claim, but ruled that the hotel chain retaliated against the plaintiff for bringing his age discrimination claim.  The plaintiff received damages of $500,000 in front pay, $750,000 in back pay, and $1 million in emotional distress damages.  In addition, the Court doubled the damages award under Massachusetts General Law Chapter 151B, Section 9, for a total award of $4.5 million.

This case provides a stark reminder that the provisions of Massachusetts employment and discrimination laws apply to highly-paid executives as much as they do to hourly wage earners.  In fact, the amount of damages awarded in this case exceeds the total award in many employment class-actions.