Wake County Jury Awards $3.75 Million to Whistleblower

Last month a Wake County jury awarded a large verdict of $3.75 million to a former State Highway Patrolman who proved that his termination from the force was in punishment or retaliation over whistleblower activity.  The plaintiff and former trooper, Reginald Newberne, alleged that he was fired after he had truthfully reported information about possible excess use of force by other officers in connection with a DWI stop.  After a week long trial, the jury agreed that Newberne was unlawfully terminated in retaliation for breaking a "code of silence" that prohibited officers from reporting misconduct by their peers.

The size of the verdict is a stark reminder of the dangerous nature of whistleblower or retaliation claims.  Juries are often times very troubled when it is proven that an employer punishes an employee for exposing its unlawful activity.  We often here the adage that "the cover-up is worse than the crime."  Whistleblower cases, such as this one, tend to similarly demonstrate the danger of an employer's decision to punish employees who attempt to disrupt a cover-up by reporting misconduct.

If you have questions about whistleblower protections, please see our previous discussion of recent whistleblower developments or feel free to call attorney Brian Alligood, an experienced North Carolina employment law attorney, at (336) 907-3902 for counsel.

Equal Pay for Equal Work -- It's ALREADY the Law (and has been for 50+ years)

Sometimes in the heat of a political campaign year slogans and promises take root that seem to forget reality.  One that has become quite popular in recent years is the suggestion that legal reform is needed in order to ensure women equal pay for equal work.  Because the premise seems so fundamentally fair and noble, the media has adopted this rallying cry as well.

The only problem is that we have had a federal law requiring this very thing for over fifty years.  Called, logically enough, the Equal Pay Act of 1963, it has been the subject of a previous post here. Here are some of the remarks made by President Kennedy upon signing the legislation:

I AM delighted today to approve the Equal Pay Act of 1963, which prohibits arbitrary discrimination against women in the payment of wages. This act represents many years of effort by labor, management, and several private organizations unassociated with labor or management, to call attention to the unconscionable practice of paying female employees less wages than male employees for the same job.

In short, it has long been the law in all fifty states that an employer cannot discriminate on the basis of gender in setting pay rates.  Not only does the EPA forbid this, Title VII of the Civil Rights Act of 1964 does as well.

So why the confusion?  And why aren't all women paid the exact same as male counterparts?  Because the EPA does not eliminate the employer's ability to consider distinguishing credentials, skills, job performance, or other bona fide business considerations is setting a given employee's pay.  Employers can still pay more for more advanced degrees, more valuable experience, greater business contacts, or other legitimately distinguishing credentials.  Similarly, employers can still pay lower performing employees less.  As such, if an employee has poor attendance, is chronically late to work, is prone to poor work product, the employer can, and arguably should, pay less than better performing peers.  But if a woman is paid less than a man for the same work and in the absence of any bona fide business reason, she can sue the employer for the difference in pay and attorney's fees.  In fact, in the case of a willful violation, the underpaid employee can collect liquidated damages as well.

Furthermore, an employer's mere offering of a purported justification for lower pay does not set the employer free.  The employee can still offer evidence to show that the justification is a pretext, or phony excuse, for the disparity.

In short, and at the risk of diluting a good campaign rallying cry, equal pay for equal work is already the law of the land.

Whistleblower lawsuit dismissal reversed by Fourth Circuit Court of Appeals

The Fourth Circuit Court of Appeals (which is the federal circuit that includes North Carolina) has allowed a Norfolk Southern Railway worker to proceed with a whistleblower action even after the same employee’s earlier filed discrimination action was dismissed by a federal district court.  The case, Lee v. Norfolk Southern Railway Co., 802 F.3d 626 (4th Cir. 2015), serves as an important reminder of an employer’s duty not to punish employees who report safety violations or other perceived unlawful actions.

The case was filed by Charles Lee, a rail carman for Norfolk Southern in North Carolina.  As a carman, Lee was responsible for inspecting rail cars for potential safety concerns.  In July of 2011, the company suspended Lee without pay for six months.  The company claimed that the suspension was because Lee drank a beer while on duty and then drove a company owned car in violation of company policy. 

Lee, however, claimed that his termination was actually due to two illegal factors: (1) his race (black) and (2) retaliation for federal rail safety whistleblowing activity.  

Lee filed two separate lawsuits at different times alleging these different theories.  The district court entered summary judgment for the defendant and dismissed the first lawsuit for alleged race discrimination under 42 U.S.C. § 1981.  Shortly thereafter, Lee filed a second lawsuit for damages under the Federal Railroad Safety Act’s whistleblower provision.  In this suit, Lee contended that Norfolk Southern suspended him in retaliation for his refusal to comply with the company’s attempts to limit the number of defective cars that he could identify as needing repairs.  In short, Lee argued that the company unlawfully punished him for blowing the whistle on safety violations.

Norfolk Southern argued that this second lawsuit was barred by an election of remedies restriction contained in the Federal Railroad Safety Act.  That provision states: “An employee may not seek protection under both this section and another provision of law for the same allegedly unlawful act of the railroad carrier.”  49 U.S.C. §20109(f).  The district court agreed with this position and granted summary judgment in the second suit as well.

In a heavily contested appeal, which featured appearances by government agencies and amicus filings by the Association of American Railroads, the Fourth Circuit Court of Appeals reversed.  In so doing, the Court agreed with Lee’s position that while his suspension was the challenged act in both lawsuits, the allegedly unlawful act was different in the two suits.  The first suit alleged discrimination as the unlawful act; the second suit alleged whistleblower retaliation. Because these are distinct causes of action with different proof requirements, the Court ruled that the election of remedies restriction did not bar the second whistleblower action.  

Procedurally, the case was quite complex.  The complexity was due to a number of factors, which included the rigorous administrative scheme that a railroad worker must first pursue before filing a whistleblower case in court.  The case demonstrates well, however, the basic danger that lurks whenever an employer takes adverse employment action against an employee who has reported or opposed safety violations or who has refused to comply with instructions or orders that violate federal safety standards.

Far from unique to the railroad setting, whistleblower protections exist in a myriad of settings, both blue collar and white collar.  Virtually any time an employee is punished for opposing work place safety concerns, whistleblower considerations arise.  Beyond the safety arena, employees are also protected from retaliation for opposing unlawful activities, such as employment discrimination or harassment.  

Another whistleblower protection that often comes in to play is the protection afforded to employees who report or oppose unlawful billing practices by employers who perform work under government contracts.  Both federal and state law provides protections to whistleblowers who report false claims for payment or reimbursements.  This blog post presents an excellent overview of some of the more common whistleblower statutory protections under federal law, but keep in mind that North Carolina law provides many others. 

It is also critical to remember that retaliation or whistleblower actions often prove more problematic to the employer than defending the underlying claim of unlawful conduct.  In this case, for example, the Fourth Circuit noted that  the “burden-shifting framework that is applicable to FRSA cases is much easier for a plaintiff to satisfy than the McDonnell Douglas standard” applicable to Section 1981 claims.

U.S. Justice Department Files Sexual Harassment Lawsuit Against Scotland County Agency and Employees

Earlier this month the United Sates Justice Department filed a sexual harassment lawsuit against Southeastern Community and Family Services, Inc., which is a public housing agency that administers the federal Section 8 voucher program in Scotland County.  The complaint, copied here, also names as defendants John Wesley, the Section 8 housing coordinator, and Eric Pender, a housing inspector. 

Generally, the complaint alleges that Wesley and Pender subjected voucher program participants and applicants to unwanted sexual comments, sexual touching and other sexual acts, and even conditioned or offered Section 8 benefits in exchange for sexual acts.  The complaint also alleges that the men punished women who rebuffed their sexual advances by taking adverse housing actions against them.  The claims are pursued under both Title VII of the Civil Rights Act of 1964 and the Fair Housing Act.

According to the complaint, Wesley's harassment dates back to the year 2000 and includes such acts as making unwelcome comments and sexual advances to applicants, touching applicants and himself (in their presence) in a sexual manner, and even exposing his genitals in the presence of Section 8 applicants and participants.  He is also alleged to have used the women's responses to his sexual advances as a basis for advancing or hindering applications for benefits.  Similar misconduct is alleged against Pender.  In these ways the complaint alleges sexual harassment of both the hostile work environment and quid pro quo varieties, albeit outside of the employer-employee relationship.

The action is notable in several respects.  First, it serves as a reminder of the kinds of comments and actions that frequently lead to sexual harassment litigation.  In addition, it confirms that sexual harassment presents a liability risk for employers not only as to employee victims, but also as to third-parties who are affected by the misconduct. The case also serves as a reminder that governmental entities are not immune from liability for sexual harassment.  Finally, we see that sexual harassment is prohibited not only by Title VII but by other federal laws prohibiting discrimination and that federal agencies other than the EEOC enforce the prohibition against sexual harassment.

Fourth Circuit Affirms Jury Verdict in Racial Harassment and Retaliation Action Despite Erroneous Causation Instruction

In E.E.O.C. v. A.C. Widenhouse, Inc. (06/24/2014), the Fourth Circuit Court of Appeals affirmed a substantial plaintiffs’ jury verdict in a case featuring claims of a racially hostile work environment, racially discriminatory discharge, and retaliatory discharge.  The lawsuit was brought first by the United States Equal Employment Commission (“EEOC”) on behalf of two black employees, and also included additional claims brought by Contonious Gill, one of the affected employees, after he intervened in the action.

Gill had worked for A.C. Widenhouse as a truck driver from May of 2007 until his termination in June of 2008.  During his employment, Gill was subjected to racial epithets, which included use of the “N” word and the term “porch monkey.”  He also heard racially charged jokes and witnessed displays of objects such as nooses and confederate flags.  Gill testified that he repeatedly reported these incidents to superiors, who did nothing to remedy the problem.  Gill was terminated in June of 2008 when he was unable to complete a delivery due to illness.  Gill alleged that the termination was due to racial discrimination as well as retaliation for his reporting the harassment.

The jury found Widenhouse liable on each claim and awarded Gill $105,000.00 in damages.  The judge, in turn, awarded Gill an additional $88,509 in back pay and prejudgment interest. The judge also ordered Widenhouse to pay $139,000 in attorneys’ fees and costs.

In its appeal to the Fourth Circuit Court of Appeals, Widenhouse contended that the trial court erred by instructing the jury on the law applicable to the claim of retaliation.  On this point, the trial judge instructed the jury that it should find Widenhouse liable for violating Title VII's retaliation prohibition if the jury found that retaliation for Gill's protected activity of reporting racial discrimination was a motivating factor in his termination.  This instruction was contrary to recent United States Supreme Court precedent holding that a retaliation plaintiff must prove that the plaintiff’s protected conduct (here, Gill’s complaints of harassment) must have been the “but-for” cause of the retaliatory action.  

While acknowledging the erroneous instruction, the Court of Appeals nevertheless affirmed the verdict because Widenhouse failed to show that the erroneous instruction affected the outcome of the retaliation claim.  In its analysis on this point, the Court found significant the jury’s verdict sheet, which noted the jury’s finding that the termination was “because of” his opposition to unlawful harassment.  The Court also found that the jury’s finding of liability for the same conduct under a companion Section 1981 federal law theory to demonstrate further a lack of prejudice from the erroneous instruction.

In affirming the jury verdict despite the erroneous jury instruction, the opinion also demonstrates that the Supreme Court’s recent pronouncement of a “but-for” causation requirement really is not the significant change in the law that employers initially believed.  Other recent cases decided by other courts have previously noted that there can be more than one “but-for” cause, and the opinion here seems to confirm the point.  Other commentators have discussed how the traditional analytical framework for retaliation claims appears to have been altered little by the distinction between “motivating factor” and “but-for” causation. We tend to agree that the but-for causation requirement is unlikely to dramatically alter the danger presented by retaliation claims when termination decisions closely follow an employee’s complaints of work place discrimination or harassment.

EEOC Files Age Discrimination Lawsuit Against Wal-Mart Stores of Texas

As we have previously noted on this blog, age discrimination claims continue to be asserted in large numbers, both in North Carolina and across the nation.  Employment discrimination on the basis of age is expressly prohibited by the Age Discrimination in Employment Act (“ADEA”).  Furthermore, in North Carolina, age discrimination is prohibited by the North Carolina Equal Employment Practices Act. 

Recently, the United States Equal Employment Opportunity Commission (“EEOC”) filed a civil lawsuit against Wal-Mart Stores of Texas, LLC due to alleged age discrimination.  In the lawsuit, the EEOC contends that David Moorman, a 54 year old manager of a Wal-Mart store located in Keller, Texas, was the victim of unlawful age discrimination in multiple respects.  The lawsuit is instructive in demonstrating the various types of discriminatory conduct and actions that can constitute actionable discrimination.

In the complaint that initiated the lawsuit, the EEOC contends that Mr. Moorman was subjected to frequent age-based taunts from his direct supervisor, including repeated references to “old man.”  According to the EEOC’s press release on the case, the supervisor also referred to Mr. Moorman as “old food guy,” and derided him with comments such as, “You can’t teach an old dog new tricks.”  It is further alleged that Wal-Mart took no corrective action, even after Mr. Moorman reported the conduct, that the misconduct increased, and that the store ultimately fired Mr. Moorman because of his age.

In addition, the lawsuit alleges that Wal-Mart unlawfully refused a request for accommodation of a diabetes related disability.  According to the lawsuit, Mr. Moorman requested reassignment to a store co-manager or assistant manager position after being diagnosed with the condition.  It is alleged that Wal-Mart refused to consider the request and simply rejected it without discussion.

On the basis of the above, the EEOC sued Wal-Mart for violations of the ADEA as well as the Americans with Disabilities Act (“ADA”).  The ADEA claims are multifaceted inasmuch as the complaint refers both to a hostile work environment and a discriminatory discharge. 

The lawsuit is a good example of how multiple federal causes of action can arise as a result of an employer’s treatment, or mistreatment, of older workers.  The alleged misconduct in this case occurred during a relatively brief time period, between February of 2011 and July 11, 2011, the date of termination.  Within this relatively brief time period, it is alleged that Wal-Mart created a hostile work environment, failed to correct it upon notification of the problem, and terminated a complaining victim.  It is not clear whether the EEOC contends that Wal-Mart terminated Mr. Moorman in retaliation for his reports of harassment, but a claim for retaliatory discharge is yet another risk for employers under this scenario.  Finally, the ADA claim represents still another statutory violation that the company is alleged to have committed within a relatively brief time frame.

While surprising to read, it is not uncommon to see allegations of this nature.  The “can’t teach an old dog new tricks,” is a particularly common statement that appears to be used with some frequency in the American work place. 

As explained, the EEOC has filed this particular lawsuit on behalf of the affected worker.  Notably, just two weeks after filing the lawsuit described above, the EEOC also reported a settlement with Wal-Mart Stores East, LP, in which the company was required to pay $363,419 to resolve an action for sexual harassment and retaliation.  These recent developments show that even the nation's largest companies continue to face substantial liabilities as a result of equal employment opportunity violations.

The majority of age discrimination lawsuits are brought by private law firms after the EEOC concludes an administrative review of a Charge of Discrimination.  The cases are quite complex, both in terms of procedural and proof requirements.  If you are confronting issues or allegations of work place discrimination or harassment, it is important to seek counsel from qualified attorneys in this area.

Middle District of North Carolina Magistrate Recommends Dismissal of Complaint for Race and National Origin Discrimination Due to Arbitration Agreement

A recent federal opinion from the Middle District of North Carolina  confirms the enforceability of agreements to arbitrate in the employment context.  In Peraza v. Rent-A-Center, a Hispanic plaintiff filed a pro se suit for alleged employment discrimination on the basis of race and national origin, as well as for retaliation.  The complaint alleged that the plaintiff complained of his supervisors’ disparate treatment of Hispanic customers only to have no corrective action taken in response.  Additionally, the plaintiff alleged that his supervisors began to retaliate against him for making the complaint by writing him up for small attendance-related infractions for which non-Hispanics were not disciplined.  Finally, after the plaintiff reported the supervisors’ conduct to HR, his employment was terminated.  The plaintiff filed suit under Title VII of the Civil Rights Act of 1964.

The defendant employer promptly filed a motion to dismiss the complaint and order the case to arbitration on the basis of an arbitration agreement that the plaintiff signed during his employment.  That agreement stated that the parties “mutually consent to the resolution by arbitration of all claims or controversies, past, present or future, including without limitation, claims arising out of or related to [Plaintiff's] application for employment, assignment/employment, and/or the termination of [Plaintiff's] assignment/employment.”  The agreement specifically covered claims of employment discrimination and harassment. 

Furthermore, the agreement provided that an arbitrator must also decide “gateway issues of arbitrability.” On this point, the agreement stated that “[t]he Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.”  

The Magistrate Judge made short work in concluding that the arbitration agreement controls under the “liberal federal policy favoring arbitration agreements.”  The Magistrate also recognized that the parties’ agreement to arbitrate even gateway issues of arbitrability is likewise enforceable.  In fact, that very issue, the Magistrate noted, has been recently decided by the United States Supreme Court in another Rent-A-Center case, Rent-A-Center, West, Inc.  v. Jackson, 130 S. Ct. 2772 (2010).

For these reasons, the Magistrate issued a recommendation that the defendant’s motion be granted.

As explained, the plaintiff was pro se, or representing himself, in the matter.   

In opposing the motion, the plaintiff argued that the case should remain in court, in part because of language concerns.  Indeed, the response itself reflected both that the plaintiff was unrepresented and limited in his command of the English language.  Here too, the Magistrate quickly determined that such challenges must be taken to the arbitrator for resolution.

The case is a reminder of the strict harshness with which courts enforce signed arbitration agreements.  Under current case law, employers are free to require employees to enter such agreements – despite the EEOC’s express condemnation of this practice – and even threshold issues of arbitrability can be reserved for determination by the arbitrator.