RECENT COURT RULINGS ADDRESS SCOPE OF TITLE VII PROTECTIONS

Title VII of the Civil Rights Act of 1964 protects employees from discrimination based on race, religion, gender and national origin.  (Other federal legislation, such as the Age Discrimination in Employment Act and the Americans with Disabilities Act, provides further protections.)  During the past several months, the United States Supreme Court and other federal courts have addressed several interesting and important Title VII issues:  Is there a cap on “front pay” damages?  Under what circumstances can an employee assert a retaliation claim?  Does a company’s failure to include prescription contraceptives in its health plan constitute gender-based discrimination?  Is sexual orientation protected under Title VII?  What is the difference between sexual orientation discrimination and same-sex discrimination?  In this edition of the Employment Law Bulletin, we discuss four recent federal court decisions that address these issues. 

U.S. Supreme Court Rules Front Pay IS Not Capped Under Title VII

In a decision that is good news for employees and bad news for employers, the Supreme Court recently ruled unanimously that Title VII’s limit on the damages a successful plaintiff may be awarded does not apply to damages awarded as “front pay.”  Pollard v. E. I. du Pont de Nemours & Co., 121 S.Ct. 1946 (2001).

 “Front pay” refers to damages a successful plaintiff is awarded as compensation for income he is expected to lose from the time of the favorable verdict forward. For example, suppose a plaintiff was unlawfully terminated from a job paying $50,000 per year and, despite his best efforts, could only find a new job paying $30,000 per year. A jury could award that plaintiff future damages, or “front pay,” of $20,000 per year for a certain number of years to compensate for the salary lost. (This contrasts with “back pay,” which compensates a plaintiff for income lost from the time of the unlawful termination to the time of verdict.)

Title VII places a ceiling on compensatory damages (i.e., damages awarded for emotional distress and the like) and punitive damages (i.e., damages awarded to punish an employer for particularly egregious unlawful conduct).  The limits depend on the employer’s size.  For example, there is a $300,000 cap on the amount of compensatory damages that may be awarded against an employer with 500 or more employees. 

Because Title VII does not expressly address whether front pay is subject to the same ceiling as compensatory and punitive damages, there was some confusion among the lower federal courts concerning Congress’s intent.  In Pollard, the Supreme Court addressed this confusion, concluding that the amount of front pay that can be awarded is not subject to any statutory cap. 

Although the Court’s ruling creates additional exposure in Title VII actions, employers already face this risk under many state discrimination statutes. For example, in Washington, under the Washington Law Against Discrimination (WLAD), there is no limit on the amount of damages—whether compensatory, back pay or front pay—that can be awarded.  Unlike Title VII, however, the WLAD does not provide for punitive damages.  

U.S. SUPREME COURT DEFINES TITLE VII RETALIATION STANDARD

Title VII protects employees not only from unlawful discrimination but also from retaliation for opposing conduct made unlawful under Title VII.  What are the proper parameters of a retaliation claim?  The Supreme Court recently addressed and clarified this issue in Breeden v. Clark County School District, 121 S.Ct. 1508 (2001).

In Breeden, the plaintiff alleged that her male supervisor made sexually harassing comments.  Specifically, in October 1994, the plaintiff, her supervisor and a male co-worker met to review the psychological evaluation reports of four job applicants.   The report for one applicant disclosed that he had once commented to a co-worker, “I hear making love to you is like making love to the Grand Canyon.”  At the meeting, the plaintiff’s supervisor read the comment aloud, looked at her and stated, “I don’t know what that means.”  The other employee then said, “Well, I’ll tell you later,” and both men chuckled. 

The plaintiff complained about the comment to the offending employee, that employee’s supervisor and another manager.  In her lawsuit, the plaintiff alleged she was “punished” for complaining about the alleged sexual harassment and then transferred (in May 1997) in retaliation for filing a claim with the Equal Employment Opportunity Commission (EEOC) in April 1995 and filing a lawsuit in April 1997.

In rejecting the plaintiff’s retaliation claims, the Supreme Court acknowledged that Title VII protects employee “opposition” not just to practices that are actually “made…unlawful” by Title VII, but also to practices that the employee could reasonably believe were unlawful (i.e., that plaintiff’s opposition was protected “if she had a reasonable, good faith belief that the incident involving the sexually explicit remark constituted unlawful sexual harassment”). 

The Court concluded, however, that no reasonable person could have believed that the single incident the plaintiff relied upon violated Title VII’s standard.  “The ordinary terms and conditions of [her] job required her to review the sexually explicit statement in the course of screening job applicants.  Her co-workers who participated in the hiring process were subject to the same requirement, and indeed, in the district court [she] conceded that it did not bother or upset her to read the statement in the file.  Her supervisor’s comment, made at a meeting to review the application, that he did not know what the statement meant, her co-worker’s responding comment, and the chuckling of both are at worst an isolated incident that cannot remotely be considered extremely serious as our cases require.”  Therefore, Title VII retaliation would not enter the picture here, since no reasonable person could regard the alleged conduct as sexual harassment. 

The Court’s ruling also sheds light on the import of  “causation” and “temporal proximity” in analyzing a retaliation claim.  The Court rejected the notion that the plaintiff’s transfer (an adverse employment action) in 1997 was in retaliation for the plaintiff having filed her EEOC charge (a protected activity under Title VII), because the charge had been filed in 1995 and the requisite “temporal proximity” did not exist.  So, too, although the transfer occurred shortly after the lawsuit (a protected activity) was filed, the Court rejected the plaintiff’s contention that there was a “causal connection” between the two events, because the record showed the employer was contemplating transferring her before it learned she had filed suit.  The Court stated, “Employers need not suspend previously planned transfers upon discovering that a Title VII suit has been filed, and their proceeding along lines previously contemplated, though not yet definitively determined, is no evidence whatsoever of causality.  

Federal District Court Holds Title VII Includes Right To Prescription Contraceptives

In a case of first impression which drew national attention, Judge Robert Lasnik of the United States District Court for the Western District of Washington recently held that excluding a class of women-only prescription drugs from a generally comprehensive drug plan was gender-based discrimination and violated Title VII of the Civil Rights Act of 1964.  Erickson v. The Bartell Drug Co., 141 F. Supp.2d 1266 (2001).

The case was brought as a class action on behalf of all non-union female employees of Bartell Drugs who were enrolled in Bartell’s Prescription Benefit Plan.  The Plan did not cover certain prescription contraceptives.  Judge Lasnik held that once an employer decides to offer a prescription plan, it must ensure that the plan provides equally comprehensive coverage for both sexes and does not discriminate based on gender-based characteristics.  Here, because only women use prescription contraceptives, Judge Lasnik concluded that Bartell’s decision to exclude that particular benefit from its plan was discriminatory.

In so holding, Judge Lasnik wrote, “The special or increased healthcare needs associated with a woman’s unique sex-based characteristics must be met to the same extent, and on the same terms, as other healthcare needs.  Even if one were to assume that Bartell’s prescription plan was not the result of intentional discrimination, the exclusion of women-only benefits from a generally comprehensive prescription plan is sex discrimination under Title VII.”  Judge Lasnik further stated that, while Title VII does not require employers to offer any particular type of category or benefit, “[i]n light of the fact that prescription contraceptives are used only by women, Bartell’s choice to exclude that particular benefit from its generally applicable benefit plan is discriminatory.”

COURT DISTINGUISHES SEXUAL ORIENTATION FROM SAME-SEX DISCRIMINATION UNDER TITLE VII

Federal courts, including the Ninth Circuit (Rene v. MGM Grand Hotel, Inc., 243 F.3d 1206 (9th Cir. 2001)), are unanimous in holding that discrimination based on sexual orientation is not protected under Title VII.  This proposition was most recently reaffirmed in Bibby v. Philadelphia Coca-Cola Bottling Company, 2001 WL 867067 (3rd Cir. 2001), in which the Third Circuit stated that, while “harassment on the basis of sexual orientation has no place in our society, Congress has not yet seen fit to provide protection against such harassment.”  

In Bibby, the plaintiff alleged he had been harassed by his male coworkers and supervisor.  He lost his case because he could not show that the harassment occurred because he was a man.  In other words, Bibby’s arguments rested solely on the claim that he was harassed because of his sexual orientation and not because of his gender. 

The Bibby case is instructive because the Third Circuit explained differences between sexual orientation discrimination, which is not protected under Title VII, and same-sex discrimination, which is protected under Title VII.  Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998).  

The Third Circuit cited three situations in which same-sex harassment can be seen as discrimination due to gender (as opposed to discrimination due to sexual orientation).  First, if there is evidence that the harasser sexually desires the victim (as in the case of a gay or lesbian supervisor who treats the victim in a sexually charged manner), then it is reasonable to conclude that the behavior occurred because of the victim’s gender.  Second, if the harasser “displays hostility to the presence of a particular sex in the workplace,” this, too, could amount to discrimination because of gender.  This could occur, for example, where a male doctor believes that men should not be nurses and therefore makes harassing statements to a male nurse.   Third, if the harasser “was acting to punish the victim’s noncompliance with gender stereotypes,” this (regardless of the sexual orientation of the harasser and/or victim) could be construed as harassment because of sex.  In concluding that Bibby’s allegations did not fall within any of these categories, the Third Circuit stated, “His claim was, pure and simple, that he was discriminated against because of his sexual orientation.  No reasonable finder of fact could reach the conclusion that he was discriminated against because he was a man.  

The Third Circuit rejected Bibby’s contention that, under its analysis, gay and lesbian plaintiffs who bring same-sex harassment claims are unfairly forced to prove a negative—i.e., that their harassers were not motivated by anti-gay sentiments.   The court stated that, regardless of sexual orientation, the plaintiff must—in all cases—demonstrate the harassment occurred “because of” his or her gender.  Once the plaintiff shows this, the court explained, sexual orientation is irrelevant.