Employment Law Update August 2022
In the world of employment law, August 2022 brought a potentially landmark decision for transgender workers, increased tensions in the battle over unionizing Starbucks, and a significant potential class action lawsuit against American Express. Find out more below:
Fourth Circuit Rules that ADA covers Gender Dysphoria
A divided Fourth Circuit panel ruled that gender dysphoria can qualify as a disability under the Americans with Disabilities Act (“ADA”). Although the ruling was a divided decision, this was the first federal appellate decision to extend the ADA to transgender people, and paves the way for transgender people to bring a lawsuit alleging they faced disability discrimination based upon their gender dysphoria. The decision revived a transgender woman’s disability discrimination case over a Virginia detention center’s decision to place her in men’s housing.
The dissent pointed out that the majority’s opinion seemed to go against the intent of Congress, which expressly excluded “gender identity disorders” from falling within the ADA when the law was passed in 1990. However, the majority supported its decision by distinguishing gender dysphoria: “nothing in the ADA, then or now, compels the conclusion that gender dysphoria constitutes a ‘gender identity disorder’ excluded from ADA protection.” The Court also observed that the diagnosis of “gender identity disorder” was removed from the APA diagnostic manual nearly a decade ago.
Tensions rise between Starbucks and the NLRB in Ongoing Unionizing Fight
In the ongoing saga over unionizing Starbucks, Starbucks issued a letter earlier this month to the National Labor Relations Board (“NLRB”) asserting that multiple regional offices of the NLRB “secretly colluded” with the Workers United union to unfairly sway mail-in ballot union elections. The alleged conduct includes giving the union duplicate ballots, mishandling ballots, allowing certain workers to vote outside of normal agency procedures, and providing the union with confidential, real-time information about votes to enable the union to target individuals who had not yet voted. The letter asked the NLRB Inspector General to investigate the matter, and urged the agency to suspend all mail-ballot votes nationwide.
Not to be outdone, roughly a week after the Starbucks letter the NLRB’s Seattle office filed a complaint accusing Starbucks Interim CEO Howard Schultz of making unlawful comments that promised increased benefits for nonunion stores and threatened workers who had voted to unionize. Among other relief, the complaint seeks to require Schultz to read a notice on video to Starbucks’ workforce about their unionizing rights under the NLRB, and to require Starbucks to send apology letters.
Thus far, unionization efforts at Starbucks locations across the country have been largely successful. Out of 344 reported cases of unionizing efforts, the union has prevailed in 218 of them.
Proposed Class Action lawsuit by White Manager alleges American Express favors African-American Workers
A white former Manager at American Express filed suit this month alleging that American Express implemented a system that favored African-American workers and forced out white workers. According to the Complaint, the plaintiff claims that the company implemented illegal racial quotas and a policy in which executives were given financial incentives that enhanced their bonuses if the executives reduced the percentage of white employees in their departments. Moreover, that during recent layoffs, white employees were disproportionately let go, while other white workers were allegedly either forced out or suffered mental stress because of the “racially repressive environment”. This allegedly included “constant” racial training on topics like “microaggressions” and “unconscious bias”. The action seeks to certify a class of white American Express employees who held certain managerial positions and who have allegedly been discriminated against. The case is Netzel v. American Express Co. et al., case number 2:22-cv-01423, in the U.S. District Court for the District of Arizona.
This case comes on the heals of a federal lawsuit in North Carolina against Novant Health in which a white male executive was awarded a multi-million dollar verdict after a jury found that he was improperly fired as a consequence of the company’s efforts to diversify its workforce. Notably, this August the court in that matter reduced the damages awarded to the plaintiff from $10 million to $3.7 million to bring the award in line with Title VII’s damages cap, however the court denied the employer’s request to eliminate the punitive damages award altogether. That case is Duvall v. Novant Health Inc., case number 3:19-cv-00624, in the U.S. District Court for the Western District of North Carolina.
Time will tell if these cases are harbingers of future claims asserted on behalf of white workers in response to the growing push for diversity and inclusion programs across the United States.
Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.