There’s cases of sex discrimination and then there’s cases that sound like they’re straight out of the show Mad Men. Earlier this month, the Federal District Court ruled in a summary judgment in favor of a lawsuit alleging, among other things, hostile work environment and retaliation. The lawsuit was brought by Ms. Vicki Conforti, the lone female manager of a company called On Site Energy and Sunbelt Rentals—On Site had been bought out by Sunbelt shortly before she was fired. The facts of the case show a particularly grotesque work environment and Ms. Conforti alleges that she was fired for not playing along with this boys' club.
Ms. Conforti’s complaint describes a work environment which included pornography being played in the office, frequent propositioning of female employees by her fellow managers (although she herself was not propositioned), and at least one incident of bringing in a stripper to perform during the work day. She alleges that, despite complaints about being propositioned, On Site failed to implement any policies or procedures to deter sexual harassment and discrimination. Female employees at the company were allegedly, to a woman, paid less than their male counterparts, received less benefits than their male counterparts, not invited to corporate outings, and not reimbursed for business expenses.
Given the rest of her story, this is not surprising. On Site was acquired by Sunbelt. in 2014, and Ms. Conforti’s title was changed from Controller for the entire company to assistant manager. Even while she was Controller for the whole dang company, no men were required to report to her. After her demotion, Ms. Conforti was denied access to codes required for her work, excluded from training sessions, and not invited to management meetings, including meetings about her own department. She was also belittled in front of other staff members, with her decisions overridden and, at least once, work she had done publicly destroyed. Her complaints fell on deaf ears.
In a meeting with two of the company VPs, Ms. Conforti was told—in front of her attorney—that her title had too much responsibility for a woman. They suggested that she take a less important position. When she complained, Ms. Conforti was informed that she was “being too aggressive and overreacting” and it was suggested that she “should assume the submissive role expected of females and play nicely within the boys’ club.” After more complaints, Ms. Conforti was stripped of all authority, moved away from the rest of the employees, and constantly taunted by management.
Quotes from management during Ms. Conforti’s time with the company also paint a pretty damning picture. Comments from male management include saying that they don’t want too many women on the job as they are “excessively emotional and moody” and a women’s proper position being “behind that of men.”
After all this, and quite a bit more that there simply wasn’t space for, Ms. Conforti was fired—along with four other female employees. No men were fired during this period; all the positions were filled by men.
Sex Discrimination Explained
You probably look at all this and think, “what a slam dunk for gender discrimination.” However, the complexity of the situation may surprise you. The court agreed to dismiss all of Ms. Conforti’s state law claims and made a fairly close call on several of her Title VII claims. To understand why, let’s look at the elements of discrimination, retaliation, and hostile work environment claims.
In order to pass muster on a motion to dismiss, a plaintiff has to show that a reasonable jury could plausibly find enough evidence for all elements of their claim. The elements of a Tile VII discrimination claim are: (1) the employer took adverse action against them, and (2) their race, color, religion, sex, or national origin was a motivating factor in the employment decision.” An adverse employment action is, somewhat prosaically, an action that a reasonable employee would significantly harm them. The Supreme Court has specifically said that it can include termination and demotion. However, reassignment or changes of job duties generally is not sufficient. There must be evidence that the job duties an employee is switched to are somehow worse or more onerous. Case law says that being denied codes, access to meetings, and similar things are not enough.
Site and Sunbelt argued that the only adverse action taken against Ms. Conforti was her firing—her demotion, taunting, and change of responsibility didn’t count and couldn’t be considered. What’s more, they said that the fact that her firing was two months after any of her complaints countered any evidence she might have that the motive behind firing her was discriminatory.
In this case, while being fired was obviously an adverse employment action, moving Ms. Conforti and reducing her responsibilities was not enough to fit the bill in a discrimination claim. However, as we will see later, it likely would be enough for a retaliation claim as the standard for adverse action in retaliation claims is lower.
The next element that be shown is a discriminatory motive. This doesn’t necessarily require direct evidence of discrimination—such as an employer telling you you’re being fired for being a woman. It can also be established through circumstances which give rise to an inference of discrimination such as degrading speech about a protected group in the workplace, preferential treatment to employees not in the protected group, the events leading up to the employee being fired, showing a mishmash of many different instances of discrimination and more.
The judge in this case felt that, despite the time gap, the “mosaic of fact” showed a clearly discriminatory environment which, by itself, was enough to show a probability of a discriminatory motive in Ms. Conforti’s firing. What’s more, in the 2nd Circuit, the very fact that somebody was replaced by somebody not of a protected class—a man in this case—is enough to show at least a probability of discrimination. This probability is enough to let the case reach a jury.
Title VII Retaliation and Hostile Work Environment Claims
Retaliation claims require a showing that an employee was engaged in a complaint against their employer under Title VII and their employer took adverse action against them because of this complaint.
The executives of On Site left the door wide open to a retaliation claim by their own actions at a meeting with Ms. Conforti’s attorney. At this meeting, they directly said that Ms. Conforti was incapable of her job because she was a woman. Immediately after that meeting is when they moved her desk, took away her responsibilities, and began to mercilessly taunt her at work. A two-month gap in time between her complaints and her firing was not enough because, unlike discrimination, all the taunting and ridicule count as retaliatory action.
A Title VII hostile work environment claim requires a showing that the conduct of the accused party: 1) creates an environment that a reasonable person would find hostile or abusive; (2) creates an environment ‘that the plaintiff personally finds hostile or abusive’; and (3) ‘creates such an environment because of a protected aspect of the plaintiff—such as their sex.. To show that conduct was objectively severe or pervasive, a plaintiff ‘“must demonstrate either that a single incident was extraordinarily severe, or that a series of incidents were ‘sufficiently continuous and concerted’ to have altered the conditions of her working environment.”’
Ms. Conforti’s allegations made this claim a slam dunk to reach a jury. The mere presence of pornography in the work place has been ruled to be enough to find a hostile work environment for women—never mind bringing in strippers.
The Case Moving Forward
Ms. Conforti will be able to take her allegations to a jury. However, this case is far from over. While the defendants are accused of a pretty grotesque attitude towards women, connecting the dots between this attitude—as well as anger over the claims brought against them—and Ms. Conforti’s firing will be more of an art than a science. The circumstances, taken together, can be strong evidence. However, without a smoking gun, it will be up to a jury to decide if they’re convinced that Ms. Conforti was a victim of a boy’s club mentality.
Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law
LegalMatch publishes new articles on employment law on a weekly basis. However, we have so many different avenues that its difficult to keep track of everything. Here's a summary of what we've published from August 1st to August 8th:
- Roger Ailes, CEO of Fox News, resigned after numerous women made allegations of sexual harassment against him. What can you do if you're being harassed by a supervisor?
- Everyone gets sick, but not every gets sick because of work. What does your employer owe you if you become ill because of your job?
- Illinois recently changed its overtime laws. Here's what you should know if you're working over the clock.
The Department of Labor has recently introduced a new rule for retirement investors. The goal of this “fiduciary” rule is to help guarantee that Americans saving for retirement are able to receive investment advice that is in their best interest. Also known as the conflicts of interest rule, this new rule was first introduced by President Obama as a means of providing for retired folk who want nothing more than to live out the rest of their lives in comfort.
However, Americans cannot retire if they are buying into bad retirement investments. The retirement advisors who handle the money can take advantage of these retirees by taking their retirement funds and investing in places that they shouldn’t, resulting in a low return.
ERISA and the Purpose of this Plan
To provide some background, the legislative body that has governed retirement savings accounts to this day has been ERISA. Enacted in 1974, the Employee Retirement Income Security Act is federal in nature and hence is present in all fifty states. ERISA gives certain protection to individuals who enter into retirement savings plans. However, this law has become somewhat outdated as the 401(K) and IRA have become more popular options these days. Defined benefit plans are not as common as they were before and now retirement advisors control what goes on with the investments.
To better protect these investments, this new rule will increase measures that will protect the retiree’s investments. The advisor must act as fiduciary for the investor (retiree) and this means that the advisor must put the interest of the investor before their own. Just as the board of directors of a large corporation owes a fiduciary duty to its shareholders, here too the same concept applies. A retirement advisor places the retirement savings money aside until the time is right for the retiree to pull from it. ERISA is not being repealed; rather its focus will be shifted to better provide for these hardworking people who have spent their lives saving money and want to reap the benefits.
The reason this enactment has been created is because there are times when advisors will provide ill advice to the investor or will misguide the investor as to what savings plan they should go into. Investors might intentionally even use these savings funds to invest elsewhere, which could lead to a net loss for the investor. Other times it’s as simple as the investor not reading the fine print of the plan, which ends up hurting them in the long run.
The goal of this piece of legislation is to ensure that retiree’s investments are handled wisely and that these retirees are given the right advice, regardless of whether they want to open a Roth IRA or some other form of retirement savings account. If advisors do not act in the best interest of the investors, then there are penalties that will be enforced against them. The legislation comes with many provisions and some of these provisions act as incentives for these advisors to do the best job that they can. If they do not, they can be personally liable to restore any losses to the plan, or to restore profits that were mishandled by them.
Ultimately, this seems like a huge improvement over the old system. As mentioned before, ERISA is still the name of the game. With this new enactment, the landscape is slowly shifting to give investors a little more breathing space. Although ERISA has provided safeguards to investors in the past, this has not been enough to give full protection to their assets. Part of it has to do with the fact that employers do not always comply with ERISA. Other reasons are that retirement advisors are profit seeking as much as anyone else. However, as the fiduciary, the advisor must do whatever is in their power to give their client, in this case the investor, the best possible deal out there. It should not be a self-serving engine but a tool that they have at their disposal to best meet the investor’s needs.
Only the Beginning
This new legislation is a good start but there is more work to be done. There are many stories out there that show that many investors lose out simply because they don’t know what a retirement plan is and what is best for their particular needs. With the right guidance and support, they will be able to reap the benefits of the seeds that they have sowed many years back. There can be even better safeguards that can be used to further protect these investors. Employers can fund programs, which educate their employees on the different savings plans.
Many Americans today don’t have a good understanding of how these different savings plans work and how they can best serve their particular needs. Advisors are only a part of the story. There has to be a bigger involvement by the managers and heads of companies in educating the lower echelon on these different investment strategies. Society will be better off if savings accounts are effectively run.
Authored by Sam Behbehani, LegalMatch Legal Writer
Are unpaid internships legal? Considered by some to be an important first step into an increasingly competitive workforce, the legality of unpaid internships is still unclear. This is despite the fact that in recent years, interns have won lawsuits against major corporations (including Sirius XM Radio, NBCUniversal, Conde Nast and Viacom Inc.), with plaintiffs claiming that they did the work of paid employees and thus should be compensated for their labor.
Ultimately, it seems that the question of whether unpaid internships are actually legal is less important than whether they should be legal.
Landmark Lawsuit Leads to More Confusion
Looking to get his foot in the door in Hollywood, Eric Glatt left a career on Wall Street to intern for the Darren Aronofsky film Black Swan. Glatt’s internship duties included performing administrative and clerical work for no pay. Before long, Glatt felt exploited, and decided that he wasn’t learning anything from his internship. So he, along with another intern, Alex Footman, filed a lawsuit against Fox Searchlight Pictures.
The lawsuit alleged that the internship went against federal and New York state minimum wage laws—that since the interns were doing the work of employees, they deserved to be paid like employees. The case had major repercussions on the world of unpaid internships, with interns at companies like Hearst, Conde Nast and Warner Music subsequently filing class-action lawsuits against their host companies.
It wasn't until July 12th, five years after Glatt’s lawsuit was initiated, that a proposed settlement was filed in the case. The settlement, if approved by a judge, will allow Glatt to collect $7,500 for his work on Black Swan. Additionally, other former Fox Searchlight interns will receive a range of payments for their labor. Nevertheless, Glatt v Fox Searchlight Pictures, Inc. never definitively answered an important question: when is it ok for businesses to employ unpaid interns?
‘Immediate Advantage’ vs. Academic Benefit
In 2015, after Glatt v Fox Searchlight Pictures, Inc. made it to the Second Circuit Court of Appeals, a judge rejected the Department of Labor’s widely known, six-factor test that assesses the legality of unpaid internships. The test centers around the idea that employers should not be able to derive an “immediate advantage” from an intern’s work. In contrast, if an intern is found to contribute to their company in a meaningful way, then they have to be paid.
Although the Department of Labor’s test has long been seen as a protection against the exploitation of unpaid interns, the Second District introduced its own seven-factor test in its ruling. The court’s test focused on the extent to which an unpaid internship is connected to an educational institution. In other words, the new test is concerned with whether an unpaid intern will be able to receive some academic benefit (like college credit) for their work.
According to the Second Circuit, the Department of Labor’s test is outdated as it does not reflect the reality of today’s internships, a reality in which many young people need an internship just to start their career. Yet, however much the world of internships has changed since the Department of Labor’s test was first created, it is undeniable that the Second Circuit’s ruling gives companies wiggle room not to pay their interns.
What Does the Ruling Mean For Other Internship Programs?
The Second Circuit court’s seven-factor test could be applied to employers located in states within the court’s jurisdiction (including Connecticut, New York, and Vermont). Additionally, the Eleventh Circuit (Florida, Georgia and Alabama) has already adopted the test.
However, just because some states have adopted the Second Circuit court’s approach toward unpaid internships does not mean that it will become a national standard. The Department of Labor has not modified its test in spite of the Second Circuit’s questioning its relevance. This means that, at least for now, tying an unpaid internship program to an academic program will not completely excuse all employers from having to pay their interns minimum wage.
It is undeniable that internships continue to be beneficial for companies as well as workers. A study from the National Association of Colleges and Employers found that nearly 62% of interns are eventually converted to employees, a 13-year high. To restrict the opportunities presented by internships to those who can afford to work for free for a summer or a semester seems unfair to those who can’t. Likewise, having to pay to work (as students do when they use college credit to score internships) hardly seems like a fair trade off between employee and employer. If unpaid internships are not always illegal, then they certainly should be.
Authored by Andrea Babinec, LegalMatch Legal Writer
Corey Lewandowski is, or was, Donald Trump’s campaign manager. He was fired after repeated heated arguments with other members of Trump’s campaign staff. For example, he reportedly brought his press secretary Hope Hicks to tears when she sought to move into a non-campaign related position—screaming “You made a big [f-ing] mistake; you’re [f-ing] dead to me.” I’ve edited this statement slightly to keep it PG, but I have a feeling you’ll fill in the blanks. While he denies this statement ever occurred, there is no denying another example of his hot-headedness. He was caught on camera and arrested for grabbing a female reporter.
Now doesn’t this guy sound like a peach? He certainly doesn’t seem like the type to hold back his opinion. Now that he’s been unceremoniously dumped from the Trump campaign, you’d expect to hear some acrimonious statements about his former boss.
However, if you listen to his interviews you have to believe that he thinks Trump (and everybody associated with him) is the bee’s knees. He keeps mentioning how privileged he was to work on the Trump campaign and how honored he was to be involved.
As his silence dragged on as to any complaints he may have had about Trump, rumors flew that he might have a book in the works and didn’t want to reveal secrets. However, as speculation rose, Mr. Lewandowski sent out a tweet revealing that he was not and could not write a book—he was bound by a non-disclosure agreement (NDA) that prevented him from speaking.
Speak No Evil
NDAs are common fare in business. If you work for a mid-sized or larger company, or any high tech company, I would wager you’ve signed one as part of being hired. An NDA defines certain types of information as confidential and bars the person signing it from revealing this confidential information. They also include penalties if the information is revealed.
Not so long ago, it came out that all volunteers on the Trump campaign are made to sign an NDA before helping Trump. The terms of the NDA are fairly typical, barring the volunteers from disclosing any sensitive information about the campaign that they may learn. However, the restriction lasts forever, even after they stop working for Trump.
What is less standard is the non-disparagement clause within the non-disclosure agreement. A non-disparagement clause is exactly what it sounds like—an agreement to not say anything that would put the party named in the clause in a negative light.
The terms of Trump’s non-disparagement clause are as follows:
During the term of your service and at all times thereafter you hereby promise and agree not to demean or disparage publicly the Company, Mr. Trump, any Trump Company, any Family Member, or any Family Member Company or any asset any of the foregoing own, or product or service any of the foregoing offer, in each case by or in any of the Restricted Means and Contexts and to prevent your employees from doing so.
These terms are extremely far-reaching for a non-disparagement clause. Obviously the goal of non-disparagement clauses is to prevent people from publically speaking badly about a party; even the fact that it the clause applies in perpetuity isn’t so uncommon. However, the sheer breadth of who and what you aren’t allowed to disparage is impressive—and not in a good way. Also, the idea that you can contract to stop your employees from publically disparaging Trump (or anything kinda-sorta involved with Trump) is more than a little bit of a stretch.
That clause is absurd since you can’t make a contract banning somebody who isn’t even a party to the contract from talking about something. Couldn’t the volunteers just fire anybody who wanted to talk badly about Trump? You’d be correct that there is very little protection on a federal level (unless you are a federal employee) against being fired over which candidate you support.
However, many states (Michigan, California, New York, Florida, Ohio, West Virginia, Pennsylvania, Oregon, Colorado, Kentucky, North Dakota, and Louisiana) have laws making it illegal to fire or threaten to fire an employee based on their political affiliations. A contract which requires one party to act in a manner that is illegal is unenforceable.
Can a Contract Keep Lewandowski From Speaking His Mind?
Given that the Trump campaign binds its volunteers to such contracts—even though their enforceability may be on shaky ground—it can be assumed that the higher ups sign similar NDAs. NDAs including the same strict non-disparagement clauses the volunteers must sign. There is no question that a paid employee such as Mr. Lewandowski could be held to an NDA he signed. This might explain his behavior in interviews. But are these contracts really legal?
Non-disparagement clauses have come under fire in the past few years. However, this has primarily been in the context of businesses penalizing customers for leaving bad reviews. The practice was a common one for a while until there was substantial national backlash after two Utah residents were charge $3,500 for leaving a bad review. They refused to pay, leading to serious issues with their credit and difficulty getting a home loan. The couple took the company to court and walked away with a $300,000 judgment.
Today, non-disparagement clauses barring bad reviews are non-enforceable in California and Maryland. At a federal level, the government has failed to pass a law banning the behavior despite substantial pressure from the public. As it stands, a law penalizing non-disparagement clauses barring bad reviews has passed the Senate but has yet to pass the House and become law. These bans are far from the norm; most states treat these clauses as part of doing business.
When it comes to applying non-disparagement clauses to employees, government agencies have expressed concern over whether some non-disparagement clauses in employment agreements may illegally prevent employees from filing legitimate charges with agencies such as the Equal Employment Opportunity Commission. However, there are no actual laws barring the practice.
Non-disparagement clauses certainly don’t show much respect for free speech and the democratic process on the part of the Trump campaign. Frankly, they are fairly bad for the public in any sense. The ability to criticize businesses, employers, and politicians, helps keep these parties honest and benefits everybody. As it is, Mr. Lewandowski’s NDA is almost certainly legally binding on him—don’t expect any inside information anytime soon.
Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law