Work Matters

What Ricci means for employers

I have been looking forward to the opinion in Ricci v. DeStefano and the U.S. Supreme Court issued it today. When I saw Justice Anthony Kennedy authored the majority I thought: As the swing vote, we will get a moderate opinion, less ideology and more law. And that is exactly what we got. Recall that in Ricci, firefighters in New Haven applied for promotions to lieutenant and captain. Part of the process involved taking an exam, which was developed and reviewed by an outfit that creates tests and ensures that they are race-neutral. The test was given and it resulted in numbers that skewed toward exclusion of African-Americans. Seventy-seven candidates completed the exam for promotion to lieutenant -- 43 whites, 19 African-Americans and 15 Hispanics. Of those, 34 passed -- 25 whites, six African-Americans and three Hispanics. Under the rules, this meant the fire department must fill each vacancy by choosing one candidate from the top three scorers on the list; the top 10 slots ended up being open only to whites. Forty-one candidates completed the exam for captain -- 25 whites, eight African-Americans and eight Hispanics. Of those, 22 passed the test -- 16 whites, three African-Americans and three Hispanics. Under city rules, this meant that nine candidates were eligible for promotion to captain -- seven whites and two Hispanics. Concerned that the test had an unlawful disparate impact on African-Americans, the city -- after a lot of thought and soul-searching -- tossed the test. Seventeen white and one Hispanic firefighter sued alleging their race was considered by the city in the decision to toss the exam and that was unlawful disparate treatment. The district court cut to the quick in analyzing the reason the city made its test-tossing decision: Too many whites and not enough minorities would be promoted were the test results used. So, in this corner, a possible disparate-impact claim by African-Americans and, in the other corner, a possible disparate-treatment claim by whites. Talk about the horns of a dilemma. By a 5-4 vote, Kennedy crafted a political opinion (I mean that in a good way) whereby an employer can defend itself against the disparate-treatment claim if it has a strong basis in evidence of disparate-impact liability -- not surmise, not guesswork, not plain old good faith. He then put this construct through a summary judgment filter (the case had been decided on cross-motions for summary judgment at the trial court) and, just like any plain vanilla case, Kennedy said the city had not carried its burden but the plaintiffs had, thereby rendering summary judgment for the firefighters. Kennedy basically said the city did not have the evidence in the record to win and that the plaintiffs did, but on a different record who knows? Kennedy wrote that the standard the court announced today "appropriately constrains employers' discretion [of taking race into account] to cases in which there is a strong basis in evidence of disparate-impact liability, but it is not so restrictive that it allows employers only to act when there is a provable, actual violation." That's Kennedy for you. Not since Ulysses has anyone navigated the Scylla and Charybdis so well.
   

ENDA introduced, and a prediction

"Nothing is as powerful as an idea whose time has come." I think Victor Hugo said that. Yesterday, H.R. 2981 was introduced in the House of Representatives. It is the Employment Non-Discrimination Act of 2009, which prohibits discrimination because of sexual orientation, gender stereotyping and gender identity status. I will get into the details in a minute, but let's look at the landscape according to www.echelonmagazine.com:

• 12 states have laws banning sexual orientation discrimination.
• 85 percent of Fortune 500 companies have policies prohibiting sexual orientation discrimination, and more than 33 percent also prohibit gender identity discrimination.

The world is changing. Several years ago, The New York Times began including gay couples in the marriage part of the Sunday Styles section. But this version of ENDA goes much further than making sexual orientation a protected status. It also protects employees incorrectly perceived as being gay. This is the so-called sexual-stereotyping claim, whereby an employer violates Title VII when it takes action against an employee for failing to measure up to gender norms -- when a man doesn't act like a man and a woman doesn't act like a woman, in the employer's view. But, know what? Several courts have adopted this theory already. The proposed bill also prohibits discrimination against an employee who changes sexes. One court already has found such discrimination violates Title VII. Finally, the bill creates a claim for association discrimination. That's when an employee is discriminated against because he or she associates or has associated with an employee protected by this law. What else? Some savvy political insertions to the bill:

• Sexual orientation includes heterosexuality and bisexuality.
• No bathrooms need to be built for transgender employees.
• There is no violation of the law for denied access to shared shower or dressing facilities in which being seen unclothed is unavoidable.
• Employers have the power to enforce dress and grooming standards, provided that they allow employees transitioning to another sex to dress and groom consistently with the gender toward which the employee is moving.

My prediction? Some form of this bill will become law within the next four years. This bill is consistent with a very American idea, as well as our other civil rights laws: We treat people as individuals, based on who they are, not what they are.

Trade secrets in the Twilight Zone

Until it got to the 5th Circuit, Cudd Pressure Control Inc. must have thought it was in an episode of the "Twilight Zone." According to the 5th Circuit's June 11 opinion in Cudd Pressure Control Inc. v. Roles, et al., six of Cudd's employees left its employ to establish a competitor, facilitated with the help of a third party company. Get this: Cudd had video of one of the departing employees loading boxes of material into his truck the night before he quit. There was an e-mail from one of the departing employees to the third party company that he needed a laptop so he could transfer Cudd information. And (yes, there is more) one of the departing employees used, post-departure, Cudd financial numbers in presentations to potential investors. Cudd sued. The court dismissed its claims and made Cudd pay $425,000 in attorney's fees incurred by the departing employees in defending against Cudd's suit. Why the dismissal toss?

• The departing employees argued that they never used any trade secrets from Cudd. The trial court bit on this, but the appeals court said it was wrong to do so, instead adopting an expansive view of “use” to include using a trade secret to obtain financing.
• The trial court said that Cudd failed to show any damages from loss of its trade secrets. According to the 5th Circuit, "Cudd need not be damaged by a breach of fiduciary duty to be entitled to receive the benefits made from such a breach by the Defendants."

Summary judgment reversed, attorney fees sanctions award tossed, and case sent back with this admonition: "Remand is limited , however, and this panel retains jurisdiction over any further appeals." Now that's a message.

EFCA: Secret-ballot stealer or needed counterweight to employer power?

It is the summer of the Employee Free Choice Act. As the July issue of Harper's points out, now is do or die for the unions. Check out Ken Silverstein's "Labor's Last Stand: The corporate campaign to kill the Employee Free Choice Act." He notes that the corporate campaign cleverly has framed EFCA issues around elimination of the secret ballot and union organizing "coercion," when the real issues, according to him, are elsewhere, namely that the rules give management too much power over union elections. Illustration: an employer's legal right to hold "captive audience" meetings and give anti-union presentations. He also notes that the enforcement mechanism of the Nation Labor Relations Board is slow, taking an average of 18 months for the board's administrative law judges to issue rulings on unfair labor practice charges. (I know when I was at the board, it was frustrating: My first trial involved protected, concerted activity. From investigation to final disposition at the 5th Circuit took almost four years.) He quotes a official with the United Steelworkers Union:

If the boss really doesn't want the union and is willing to spend what's needed, you can't win . . . Even if you get past that and the workers vote for a union, you still need a contract; if you don't have one in a year they can begin the process of decertifying the union, so the company will just stall it out. By then, the workers are disillusioned, they've taken abuse, some have been fired, and they start peeling off.

It's an interesting piece. Take a read.

Anonymous 360 reviews are useless

Well, it is Sunday night, and I just finished the Keith Ferrazzi book that I blogged on earlier, "Who's Got Your Back?" At book's end he revisits the issue I posted on before: 360 degree reviews, which he and I believe are worthless. He nails it: "The real damage is that 360-degree reviews let organizations off the hook by reinforcing the idea that truth is just too painful for people to hear outright. It's as if airing the bad news in a team environment would be too dangerous or humiliating." Ferrazzi notes that he received a post on his blog from a reader who, in his reviews, cuts to the quick and asks his boss, who is giving a traditional performance review, two questions: "What am I doing that you want me to stop, and what am I not doing that you want me to do?" Is that genius or what? I say again: genius. Ferrazzi says to go ahead and do a 360, but do out in the open, with people talking face to face in a culture of caring candor. When someone tells you XYZ, realize that you are in charge of the criticism. Ask questions that probe deeply, such as, "Could you tell me more?" or "What have you seen me do that leads you to believe that?" He is right: 360 reviews done in anonymity with people shooting from the bushes are useless. It's a great read.

Cognitive theory for employment lawyers

What does the upcoming hearing on 2nd U.S. Circuit Court of Appeals Judge Sonia Sotomayor's confirmation to the U.S. Supreme Court have in common with managing employees? A lot, I think. Reading "Management Rewired: Why Feedback Doesn't Work and Other Surprising Lessons from the Latest Brain Science" by Charles Jacobs is a synapse opener. Here is the deal from cognitive theory: My reality is different from your reality. Reality is not a snapshot. People see or hear something, and an image or a thought occurs. But it does not travel in an intact whole, as if through a pipe into the brain. Instead, the sense data gets assembled, "according to a person's memories, past experiences, and possibly even wishes." All this turns into our version of reality, which we mistake for reality. It isn't. So, not surprisingly, employees and managers will always see things differently, as will judges. Judging is not, as some would have it, a bloodless process but a very human one, just like managing employees. Commentators are criticizing Sotomayor for seeing the world a certain way and judging accordingly. Cognitive theory tells us she could do no less. Employees, likewise, see their world vis à vis their managers the same way. So how does Sotomayor persuade senators to vote for confirmation, and how does a manager motivate an employee to do what the boss wants? I quote from Jacobs:

Stories are seen not only as the way the mind works but as a better fit with human activity. Different points of view, relationships, and motivations are built into the structure of stories, so they do a better job of capturing the complexity of human interaction. Because stories predate logic. In the evolution of our culture. . . . we find them immediately accessible.

Well said. Better facts don't get lawyers to where we want to go. A better story will.

Splitting hairs at the 6th Circuit

I recently stumbled across an interesting and not widely reported retaliation case. The issue: Does an employee engage in protected activity under Title VII when she gives confidential company documents to a lawyer representing her? Lawyers are going to see this issue, again and again, as more employees fear a layoff or termination. So here are the facts from the 6th U.S. Circuit Court of Appeals' opinion in Niswander v. The Cincinnati Insurance Company (2008), an appeal from a grant of summary judgment: Kathy Niswander worked for Cincinnati Insurance Co. She opted into a class action brought by another employee alleging a violation of the Equal Pay Act. She claimed that her employers treated he in an adverse manner after she opted in. So she then got a letter from one of the plaintiff's lawyers in the class action asking for any documents in her possession that related to the Equal Pay Act claim or her employment or that showed she was treated less favorably than male employees. She looks around and sends off material that she thinks deals with her inchoate retaliation claim, and the class action lawyers turn those documents over to the company pursuant to a discovery request. (Side note: Around the time of the letters, she files a charge of discrimination with the EEOC because she believes her employer ignored her retaliation claims.) Well, you know what happens next. The company finds out that a claims adjuster has turned over confidential documents that deal with claims and include sensitive customer data. The company becomes, well, upset. She gets fired for it. She goes to court and sues for retaliation, arguing that giving the docs to the lawyers was protected activity, both in opposition to unlawful discrimination and as participation in the Equal Pay Act suit. Claim denied. The documents she gave to her lawyers did not relate to the Equal Pay Act suit, only to her possible retaliation claim. Because of the disconnect, she did not engage in protected activity. But -- and here is the important point -- the court said that if the documents were relevant, even indirectly, to the Equal Pay Act claim, the she was engaged in protected activity and could not be fired for doing so. Let's take a breath. If she takes confidential company information and gives it to her lawyer and the information relates to a claim she may bring or is bringing, she can't be fired. If she is fired, a violation of the law occurs. Here, because there was no connection between the docs and the suit, she has no claim. But if there was a connection, she walks. Incredible. My opinion: Sue first and get the documents in discovery in a suit. That's the time-honored way. It is also the way it should be.

Effort counts for more than talent

Malcolm Gladwell is at it again. I blogged on his recent book "Outliers," which looks at how practice makes us good at what we do, not the random touch of talent. In the May 11 issue of The New Yorker, he takes a twist on this theme, writing "How David Beats Goliath: When Underdogs Break the Rules." His big idea: When a David faces a Goliath, the David can either fight like Goliath or wage a different battle, a contest like David decided to mount. (If you read the Biblical account, you'll see that David make a conscious decision not to fight like Goliath. He rejected heavy armor and a sword, saying, "I cannot walk in these, for I am unsuited to it." He picked up the slingshot instead.) Gladwell looks at what historians have found, and, as a sports announcer might say, here is the tale of the tape:

• In every war in the past 200 years between the strong and the weak, 71.5 percent of the time, Goliath won.
• But, when an underdog acknowledged its weakness and fought with a non-Goliath, unconventional strategy, its winning percentage rose from 28.5 percent to 63.6 percent.
• In 202 lopsided conflicts, the underdog elected to go toe to toe with the Goliath on Goliath's terms 152 times and got hammered 119 times.

Gladwell looks at examples of when the underdog did what was unconventional and came out on top, from Lawrence of Arabia to the full court press in basketball. So why doesn't the world see more unconventional battle strategies? Because, as Gladwell notes, it is too damn hard and takes too much work. It is easier to be conventional than to be different. It reminds me of Herb Brooks and the U.S. hockey team that won the gold medal in the 1980 Olympics. In the movie "Miracle on Ice" Brooks tells his team, "You guys think you're going to win because you got talent. Well, let me tell you, you don't have that much talent." So he shapes them into winners by working them to death. Gladwell writes: "We tell ourselves that skill is the precious resource and effort is the commodity. It's the other way around." He has a point: Here are my thoughts.

• Watch the movie "The Rainmaker." Plaintifffs lawyer Matt Damon, a solo, stands in front of the jury in a case involving denial of health benefits and holds up two pieces of paper: One says claims made of the insurance company (a whole lot) and the other says claims accepted (a woeful few). No videos, no computer modeling.
• Read "Carnage and Culture: Landmark Battles in the Rise of Western Power" by Victor Hansen, particularly his chapter on the battle of Midway, when a severely crippled American fleet beat an overpowering enemy fleet by doing what was not expected. Sort of like, as Gladwell notes, David did with Goliath: "And it happened as the Philistine arose and was drawing near David that David hastened and ran out from the lines toward the Philistine." As Gladwell observes, David sped up the encounter, did what Goliath was not expecting and broke Goliath's rhythm.
• Think about your life and experiences. For me, it was as a first year field attorney for the National Labor Relations Board, in my first trial, outgunned and outmanned by Big Law but not, trust me, outworked.

Maybe Gladwell is on to something.

The interview illusion

I blogged previously about how I got my first legal job at the the National Labor Relations Board, sight unseen, no interview. Now we have evidence (or at least an article) supporting the idea that interviews are a waste of time. The June issue of Fast Company magazine has a piece by Dan and Chip Heath, "Hold the Interview: Why It May be Wiser to Hire People Without Meeting Them." They look at the University of Texas Medical School. Back in 1979, it used interviews as a factor in admissions. Those who did badly got bounced from the process. But due to a funding quirk, 50 who did poorly in the interviews were admitted. Guess what? There was no difference in med school or resident performance. It's a great example of what the Heaths note is called the "interview illusion" -- the idea that interviewers are learning more in an interview than we really are. Instead, the Heaths counsel looking at job knowledge and past experience, even giving a test based on what the applicant would be doing if hired. So it looks like interviews correlate with noting other than the ability to interview.

Employment discrimination wave of the future?

A May 20 article in The Charlotte Observer discusses two suits settled by grocery stores that cater to the Hispanic market: "The cases highlighted a growing concern, EEOC officials said then [at the time of the first suit], that employers were increasingly choosing Hispanic workers over others to cut costs or to cater to Spanish-speaking customers." Now, this is interesting for Texas. Our state is increasingly becoming Hispanic, and, at some point, Hispanics will be the majority. Looks like the EEOC will patrol Title VII issues on an even-handed and principled basis.