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Tethered Rights: Liability of American Corporations for Their Foreign Subsidiaries’ Violations of Title VII

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Tethered Rights: Liability of American Corporations for Their Foreign Subsidiaries’ Violations of Title VII


 

Goldman & Ehrlich is pleased to announce that our associate, Sam Sedaei, recently had an article published in the American Bar Association Journal.

Tethered Rights: Liability of American Corporations for Their Foreign Subsidiaries’ Violations of Title VII

Corporations in the free marketplace constantly look for ways to secure advantages over their competitors. As the global economy becomes more integrated, free market competition has led corporations to expand beyond their borders.

  1. As part of this trend, an increasing number of American companies are establishing an international presence through mergers and acquisitions.
  2. Whether the goal is to benefit from cheap labor?
  3. Gain access to talent.
  4. Gain access to new markets.
  5. Isolate risk.
  6. Companies have to navigate international laws in a variety of areas.
  7. An area of the law that is becoming growingly relevant to globalizing companies is employment law. Title VII of the Civil Rights Act of 1964 (Title VII) is generally seen among most American employment law practitioners as the most fundamental transformation of employees’ rights in the United States in the twentieth century.
  8. 7 Title VII prohibits discrimination in the workplace on the basis of race, color, religion, sex, and national origin.
  9. 8 Since its inception over fifty years ago; Title VII has been amended by the United States Congress a number of times; and interpreted by the courts hundreds of times, in ways that have changed its reach and applicability.

As global commerce continues to intersect with employment law; American courts growingly find themselves in the position of having to decide the global reach of Title VII; and its capacity to protect employees’ rights beyond American borders.

As this article will explain; an American parent corporation may be held liable for the actions of its foreign subsidiary under Title VII if the plaintiff is a U.S. citizen and the American parent controls the foreign subsidiary. The article begins with a discussion of the extraterritoriality of Title VII prior to 1991 through an analysis of the text of the statute and judicial interpretations. It will then analyze the changes made to the statute in 1991; to expand its applicability beyond U.S. borders and the courts’ application of the revised statute to scenarios involving international plaintiffs. The article will conclude by offering a few practice pointers for plaintiffs seeking to enforce their rights outside of the United States; U.S. corporations and their subsidiaries that wish to limit their liability under Title VII; and courts that have to grapple with threshold jurisdictional issues in international Title VII cases.

Here is full access to: Tethered Rights: Liability of American Corporations for Their Foreign Subsidiaries’ Violations of Title VII by Sam Sedaei

Goldman & Ehrlich is a Chicago employment law firm which concentrates on employment litigation and employment discrimination. We represent private employees. As well as, Federal, State, County and Municipal employees. Along with small businesses in Chicago, the surrounding counties and southwestern Michigan. This includes all actions alleging violations of federal and state laws. What sets our Chicago employment lawyers apart is our vast experience and continued practice on both the plaintiff and defendant sides of employment law cases. We have the insight to anticipate the claims. And importantly, we can analyze the tactics from your opponent building your case to withstand arguments against you.

To effectively resolve your employment issues and take preventative action against future claims, call Goldman & Ehrlich at 312.332.6733 today or contact our office online.

 

 

 

Practical Aspects of Discovery in an Administrative Forum

Arthur R. Ehrlich will be speaking at the 37th Annual Federal Sector Labor Relations & Labor Law Conference on September 19, 2019, being held at Chicago-Kent College of Law.  Join top government officials and policymakers, world-class management-side attorneys and union representatives, and leading academics for a focused day of learning about the future of the federal workplace and workforce. Register Now.

Mr. Ehrlich will be speaking on the Practical Aspects of Discovery in an Administrative Forum, along with two government attorneys and an Administrative Judge for the Equal Employment Opportunity Commission. Mr. Ehrlichs’ Practical Aspects of Discovery in an Administrative Forum will highlight:

  • Legal Limits
  • Comparative Employees
  • Areas of Discovery
  • Factors To Consider For Comparatives
  • Other Complaints Against The Same A.D.O.
  • Input And Bias By Recommending Official
  • Good Faith or Sham Investigation
  • Depositions

        Arthur R Ehrlich, partner with the Chicago law firm of  Goldman & Ehrlich, has been representing federal employees for over 30 years in employment law cases, including discrimination and termination hearings. All CLE Training offered by Mr. Ehrlich provides the nationally-recognized guidance required to put complex concepts into practice.

Goldman & Ehrlich is a Chicago employment law firm which concentrates on employment litigation and employment discrimination. They represent private employees, Federal, State, County and Municipal employees and small businesses in Chicago, the surrounding counties and southwestern Michigan in actions alleging violations of federal and state laws regarding:

For more than 30 years, our partner attorneys have effectively represented and counseled employees and small businesses in actions for wrongful discharge and claims alleging violations of Title VII, ADA, ADEA, FMLA, Sarbanes Oxley, USERRA and the Illinois Human Rights Act, as well as various common law actions.

Register for the event here.

Learn more about Arthur R. Ehrlich here.

D.C. Retailer and EEOC Resolve Disability Discrimination Matter

Wal-Mart Stores East, LP, which operates an outlet in Northwest Washington, agreed to pay $100,000 and provide other relief to settle allegations it discriminated against two deaf employee who applied for jobs.

According to the Equal Employment Opportunity Commission, Walmart refused to provide accommodations, such as closed-captioned training videos and sign language interpreters, to two hearing-impaired applicants. In addition to the money, Wal-Mart Stores East, L.P. agreed to revise its employee manual and submit to court supervision. These are standard provisions in EEOC settlements. “This settlement should encourage all employers to provide reasonable accommodations that allow equal access for deaf and hard-of-hearing employees and applicants to engage fully in the workplace,” said Acting Washington Field Office District Director Mindy Weinstein.

“This settlement got our attention not necessarily because of its size, but because it is part of a trend,” observed Chicago employment discrimination lawyer Jonathan C. Goldman.

Earlier this year, Safeway and Blue Cross/Blue Shield of Texas each paid $75,000 to settle similar allegations. In each instance, the employer failed to provide accommodations not for current employees, but for job applicants.  These three cases clearly indicate that the EEOC is aggressively pursuing these matters. So, if you are an employer, now is a very good time to review the accommodations you provide job applicants. The Civil Rights Act of 1964 does not apply just to hearing impaired people. Other protected classes include:

  • Gender,
  • Age,
  • National origin,
  • Disability,
  • Sexual orientation, a category which probably includes gender identity,
  • Race, and
  • Religion.

Finally, an employers application process, such as filling out forms and taking tests, could be seen as discriminatory for employees with disabilities if they are not offered accommodations that give them an equal opportunity to apply for a position. 

Excluding certain applicants because of their national origin or race is another example of disparate treatment. Refusing to provide a translator may be discriminatory. These cases raise another issue as well, such as what is considered to be a reasonable accommodation? The law requires that the employer provide an accommodation that is reasonable under the circumstances.  This may require an interactive process where the employer and employee discuss what accommodations are needed and what would be reasonable under the facts. If a disabled person’s request is reasonable,  the employer is generally required to provide that request, absent compelling reasons. If the employer must establish that the request is too expensive in proportion to its profits, or would cause undue hardship to its operations

Finally, the Civil Rights Act does not just apply to current employees.

It applies to potential employees as well, in addition to former employees who were terminated when they were not provided with a reasonable accommodation that would have enabled them to perform their job. All these people are entitled to the same accommodations under the law.

To discuss your case contact Goldman & Ehrlich. 

EEOC Commissioner Speaks in Milwaukee

Goldman Ehrlich - Employment Lawyers

For the first time since 2016, Equal Employment Opportunity Commissioner Victoria Lipnic addressed the annual Industry Liaison Group meeting, which was held in Wisconsin this year.

Commissioner Lipnic addressed two pressing employment law issues: pay equity and age discrimination. Specifically, Lipnic noted the looming September 30 deadline to comply with the EEO-1. Compliance requires most companies to submit payroll data dating back to 2017. Lipnic noted that such collection “is not in any way easy,” but that is “what a federal judge has ordered.” Lipnic also observed that most Millenials were just a few years away from Age Discrimination Act coverage.

On a final note, during the subsequent Q&A session, Lipnic told federal contractors they should “lead the way in recruiting for populations you traditionally have not gone to before.”

“Both pay discrimination and age discrimination are usually good examples of disparate impact discrimination,” explained Chicago employment discrimination lawyers Arthur R Ehrlich and Jonathan C. Goldman. “Company policies in these areas may appear to be neutral, but if they disproportionately affect a protected classification of workers, they are illegal.”

Companies may not intentionally set out to pay women less than men, but more often than not, there is a significant pay gap. Even if there is no “smoking gun” evidence of discrimination, a legal remedy may be available.

Some companies over-rely on salary history information. They believe there is nothing wrong with using a candidate’s past salary history to set a current salary level. But many women were underpaid due to their gender, whether intentionally or not, in their prior jobs. As a result, their salaries will continue to lag behind their male counterparts, and the disparity increases over time. This is why many states are now making it illegal for an employer to ask an employee about an their prior salary history.

Other companies use job history to set salary, and this calculation could adversely affect women as well. For example, blue-collar workers, like miners, generally earn more than white-collar nonprofessional workers, like clerks, secretaries, or administrative assistants. Blue-collar workers are often male, while many white-collar nonprofessionals are female.

Pay discrimination victims are generally entitled to back pay, reimbursement of legal fees, lost benefits, and other damages, including perhaps damages for emotional distress if they prevail at trial.

Age discrimination cases are sometimes harder to win today than they were in the 1990s. The Supreme Court has ruled that age must be the sole factor, as opposed to only a motivating factor, in the action taken against the employee. For example, the corporation’s decision to terminate or demote an older employee may have been based partly due to age but also based on a performance issue, even if the performance issue was not significant. Under these facts, assuming there was a real, as opposed to a fabricated performance issue, the older worker’s dismissal may not have violated the Age Discrimination Act.

For this reason, the EEOC may not pursue age discrimination claims as often as other actions. But an assertive attorney may still be willing to pursue these claims on the employee’s behalf.

Mining Company and EEOC Resolve Sexual Harassment/Retaliation Lawsuit

Northern Star (Pogo) LLC, an Alaska-based gold mining company, agreed to pay $690,000 and provide other relief to resolve a discrimination and retaliation action. 

According to the Equal Employment Opportunity Commission, the company refused to promote a woman and instead promoted other, less-qualified male candidates. When Hanna Hurst applied for the promotion and then complained, Northern Star created additional qualifications for her to complete. But the company exempted male employees from these tests. In addition to paying money, Northern Star must adhere to a long-term consent agreement that will insure equal opportunities for promotion for females.

“Gender bias continues to be a problem in today’s workplace, certainly no less in those industries traditionally dominated by men,” said EEOC Seattle Field Director Nancy Sienko. “We commend Northern Star as the new successor company for demonstrating its commitment to see such discrimination doesn’t continue under its leadership.”

“Sexual harassment and retaliation are some of the most common employment discrimination claims in Illinois,” observed Chicago employment discrimination lawyers Arthur R Ehrlich and Jonathan C. Goldman. “These problems are extremely widespread, and they are also relatively easy to prove in court.”

Substantive sexual harassment cases can sometimes be complex, they cautioned. There are two types of sexual harassment claims in Illinois:

  • Quid Pro Quo: It is illegal to condition any employment-related decision on any sexual favor. This happens more often than many people believe but is often done in a subtle manner. A female employee should be careful when her boss asks if they can discuss some matter at lunch or dinner when no other employees are present.”
  • Hostile Environment: This occurs when there is a severe and pervasive pattern of unwelcome sexual or gender comments or acts.  A single joke or off-color remark does not constitutes sexual harassment. The conduct must be frequent enough to adversely affect a reasonable person or make it difficult for the employee to perform her normal job duties.

A  single-episode of a sexual assault or an extremely aggressive attempt at a sexual overture may be sufficient. 

Repeated touching to the point where it is clearly not accidental may also be enough, especially when inappropriate jokes are common. The employer’s failure to investigate a complaint or take action to stop harassment by co-workers will strengthen a sexual harassment case.  A failure to conduct an adequate and diligent investigations happens all too frequently, especially in mining, construction, and other male-dominated industries. Post-complaint investigations must be done immediately, and should be comprehensive, and transparent. 

Statistically, the EEOC usually handles more retaliation claims than anything else. This includes retaliation for making a complaint for sexual harassment.

Retaliation occurs when an employer punishes an employee who participated in a protected activity. Protected activities include the following:

  • Filing a complaint or serving as a witness in an employment discrimination claim,
  • Lodging an informal discrimination complaint,
  • Resisting sexual advances or other discriminatory conduct,
  • Intervening to help others in these situations, and
  • Refusing to follow discriminatory orders.

Even if the underlying complaint of discrimination does not prove that the law was violated, an employee is still protected from retaliation as long as the complaint was made in good faith. Contact Goldman & Ehrlich to discuss your discrimination case today.

Chicago Mayoral Candidate Was Targeted Over Anti-Discrimination Legislation

Chicago Mayoral Candidate was targeted recently over her support of anti-discrimination legislation introduced in Congress to protect members of the LGBTQ community against employment discrimination.

According to a March 19, 2019 NBC News report, a distribution of homophobic flyers across Chicago’s South Side portrayed mayoral candidate Lori Lightfoot as supporting a ‘Gay Equality Act’ in Illinois. While the front side of the flyers design looked as if it was being distributed by Lightfoot’s campaign election committee, the other side claimed, “All Contracts, Jobs and employment newly assigned exclusively to gay people!”

While there is no such thing as a ‘Gay Equality Act’, the flyer is likely in reference to a federal bill introduced by Democrats the previous week.

The Equality Act would amend existing civil rights legislation to ban discrimination in employment, housing, education, and other areas on the basis of gender or sexual orientation. Lightfoot was likely targeted as she is openly homosexual. Both she and her opponent in the mayor’s race, fellow Democrat Toni Preckwinkle, denounced the flyers, as did other community leaders.

“Targeting this particular candidate in this manner is a clear illustration as to why protections against employment discrimination are so important,” says attorney Jonathan C. Goldman of the Chicago employment law firm Goldman & Ehrlich.

There are several federal laws, including the Civil Rights Act of 1964, the Fair Housing Act, and the Equal Credit Opportunity Act. Meant to protect people against discrimination based on race, color, religion, sex, or national origin. However, the Equality Act goes a step further in specifically addressing unfair actions taken against the LGBTQ community

According to research by the American Center for Progress, close to half of all gay people report experiencing some form of harassment or discrimination in the workplace.

Among transgender individuals, an alarming 90 percent report discrimination. “Screening applicants, withholding jobs and promotions, or engaging in other forms of discrimination and harassment against members of the LGBTQ community is against the law,” says Goldman. “While tougher protections are still needed, when it occurs employers can be held accountable.” Contact Goldman & Ehrlich today to discuss your case. 

EEOC Announces Major Pay Discrimination Settlement

EEOC Announces Major Pay Discrimination Settlement

Multistate diesel engine manufacturer Cummins, Inc. agreed to pay $77,500 to settle a pay discrimination suit out of court. According to the Equal Employment Opportunity Commission, a Nashville worker received less than her male co-workers. Cummins officials reviewed the woman’s salary and concluded that there was a gender gap. But they refused to adjust the woman’s pay. S part of the settlement, Cummins, which also operates in Illinois, agreed to two years of court supervision.

“Employers should provide men and women in the same workplace with equal pay for equal work” because it’s not only fair, “it’s the law,” proclaimed EEOC Memphis Regional Attorney Faye Williams. “Technological and legal advances have made equal pay cases easier than ever to win,” remarked Chicago employment law attorney Jonathan Goldman. “But the EEOC still does not take on this issue very frequently.”

The Equal Opportunity Commission, or a similar state agency, usually has first crack at unequal pay and other employment discrimination cases, he explained.

First file an unequal pay claim with the EEOC before filing in court in order to fully exhaust administrative remedies. There are occasions when the EEOC will take these claims to court, but those occasions are rare.  Once the EEOC concluded its investigation, it will issue a Right to Sue letter, which gives the employee 90 days to file in court. When attorneys take these cases, technology often comes into play. Until fairly recently, large companies could bury claimants in papers during discovery. There may be a smoking gun in there somewhere, but it was almost impossible to find. Now, attorneys can feed documents into high-speed scanners, enter search terms, and easily view relevant documents.

If you bring an unequal pay claim in Chicago, the law is on your side.

The Windy City recently passed an ordinance which bans salary history inquiries. That issue may seem unrelated to pay discrimination, but there’s actually a very close link. When they start their careers, many women accept lower wages than their male counterparts. The pay gap gets even larger over time. A woman’s salary may increase, but not as much as a man’s. So, in an unequal pay case, it may not be necessary to look beyond the initial interview and resume requirements. If there is anything illegal, substantial compensation may be available.

That compensation generally includes both back pay, and will require future pay adjustments to match male employees performing the same work. These lost wages are from the date of employment to the current date. A judge will award a reasonable amount of money that the claimant would have earned had she stayed at that job and earned an equal wage. Contact the lawyers at Goldman & Ehrlich to discuss your case. 

U.S. Supreme Court Will Rule on LGBT Employment Discrimination

The U.S. Supreme Court will hear three cases this fall concerning LGBT employment discrimination, according to a CBS Chicago report.

Each of the three cases arise under Title VII of the Civil Rights Act of 1964, a federal law. Ultimately, the Court’s ruling may affect LGBT employees’ rights. The outcome will determine whether LGBT workers can file a federal claim for sexual orientation or gender identity discrimination in federal court. In 2017, the U.S. Court of Appeals for the 7th Circuit heard a related case. In an 8-3 decision, the 7th Circuit ruled that Title VII protects LGBT employees. Chief Judge Diane Wood emphasized that sexual orientation discrimination cannot occur without unlawful discrimination on the basis of sex. However, the U.S. Supreme Court’s ruling could reverse that decision.

Chicago LGBT employees currently have protections against employment discrimination under the Illinois Human Rights Act.

Currently, the Illinois Human Rights Act applies to employers with at least 15 employees. LGBT rights advocates sought recently to repeal that requirement so that the law would apply to all Illinois employers. The Illinois Legislature even passed a bill to do so. Yet Governor Bruce Rauner vetoed it. While many LGBT employees in Chicago have rights under state law, and under City laws, their protections under federal law will depend on the Supreme Court ruling.

Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of sex.

However, that federal law does not explicitly prohibit sexual orientation or gender identity discrimination. Courts like the 7th Circuit have ruled that sex discrimination includes sexual orientation discrimination. Similarly, the U.S. Equal Employment Opportunity Commission (EEOC) says that Title VII guarantees protections against LGBT discrimination at work.

Yet other courts have disagreed.

Indeed, an example appears in one of the cases that will come before the Supreme Court this fall. In one of those cases, the 11th Circuit ruled that Title VII does not prohibit discrimination against LGBT employees. The other two cases that will come before the Court found in favor of the LGBT employee who alleged discrimination. Those cases arose out of the 2nd Circuit in New York and the 6th Circuit in Cincinnati.

According to Chicago employment discrimination lawyers Arthur R Ehrlich and Jonathan C Goldman, the Supreme Court’s ruling will have profound effects.

Goldman remarked, “the Court could determine that Title VII does not apply to sexual orientation or gender identity discrimination.” Such a decision could mean that LGBT employees have no protections against discrimination under federal law. In such a situation, LGBT employees in Chicago would only have protections against employment discrimination under state law, Cook County law, and City law. Contact Goldman & Ehrlich today to discuss your case. 

New Lawsuit Alleges Racial Discrimination at the University of Illinois

Employees and employers alike in the Chicago area should know about a recent class action lawsuit filed against the University of Illinois-Urbana Champaign (UIUC).

The case, Brown v. Board of Trustees of the University of Illinois, alleges employment discrimination on the basis of race under Title VII of the Civil Rights Act of 1964, a federal law, and the Illinois Civil Rights Act of 2003, a state law. The plaintiffs in the case specifically allege that racial discrimination and harassment are part of the University of Illinois’s “standard operating procedure. The case is likely to highlight the harms of racial discrimination in employment.  And also underscore the steps that employers must take in drafting and enforcing a non-discrimination policy.

In the complaint, the plaintiffs cite overt and pervasive incidents of racial discrimination and harassment on the basis of race.

For example, the complaint describes threats of racial violence. Including the appearance of nooses, KKK paraphernalia, confederate flags, racist graffiti, and swastikas. Other overt acts of racism, according to the complaint, include racial slurs. Which the plaintiffs allege other employees used against them. Moreover, the complaint also alleges that racial discrimination persisted in more subtle forms. Such as black employees subjected to disrespect from supervisors and coworkers. As well as, being subject to excessive monitoring and scrutinizing from supervisors.

The University has a written non-discrimination policy.

However, as the recent lawsuit alleges, the policy only prohibits racial harassment if it is “sufficiently severe or pervasive”. Is “objectively offensive,” and “unreasonably interferes with, denies. Or if it limits a person’s ability to participate or benefit from employment opportunities, assessment or status at the University.” Accordingly, the plaintiffs argue that the non-discrimination policy permits a hostile work environment that violates both federal and state law.

According to Arthur Ehrlich and Jonathan C. Goldman, Chicago employment discrimination lawyers, “harassment can be a form of employment discrimination under both Title VII of the Civil Rights Act of 1964 and the Illinois Civil Rights Act of 2003; when it creates a hostile work environment. An employee has a right to file a claim when facing discrimination on the basis of race.”

It is important to note that this lawsuit comes at a point in which Illinois legislators recently amended the Equal Pay Act of 2003. Which prohibits employers from discrimination against African American employees by paying African American employees lower wages for substantially similar work. This recent change to the law; along with the recent lawsuit against UIUC; should make clear that employment discrimination, on the basis of race, is taken very seriously in Illinois.

EEOC And UPS Resolve Religious Discrimination Matter Through Settlement

Just as the partial government shutdown shuttered the doors at the Equal Employment Opportunity Commission, the agency announced a $4.9 million settlement in a religious discrimination case.

According to the agency, the shipping company refused to hire persons with long hair or beards, even if their appearance had a religious reason. Furthermore, UPS delayed religious accommodation requests or denied them outright, according to court documents. The company did not admit liability and characterized the settlement as a business decision. We want “to focus our energy on our hiring and promotion process, rather than lengthy and costly court proceedings,” UPS said in a statement.

The settlement is just the latest in a series of employment discrimination claims against UPS.

The company settled a multimillion-dollar disability discrimination action in 2017, and another religious discrimination action in 2013. “Failure to make a reasonable accommodation is the most common type of religious discrimination in Illinois,” commented Chicago employment law attorney Jonathan Goldman. “But this term confuses many workers. As a result, they give in too quickly and give up too much.”

Most people assume that a phrase like reasonable accommodation means give and take, he explained. But in this context, and as far as the employee is concerned, this process is basically all taking and no giving. If the worker requests a religious accommodation, the employer must grant it unless the request would cause an undue hardship.

For example, assume David works in retail. He is a Christian and he wants Sundays off. His boss is also a Christian, but he feels that the religion does not specifically prohibit working on Sundays. Nevertheless, David’s boss offers to let him off every other Sunday. David might be tempted to take that offer.

But the “not officially recognized” bit is irrelevant. If David’s religious beliefs about Sundays are sincere, the law protects him. In fact, even if David started his own church and embraced certain beliefs, the law would still protect him. It does not matter if the belief was dogmatic or not.

Second, in the “reasonable accommodation” department, David and other workers meet their initial burden by demonstrating their religious beliefs and needs. They do not have to negotiate further unless the employer establishes an undue hardship. Assuming there are other employees who are available to work on Sunday, that defense probably does not apply. That’s true even if the other workers are not as qualified as David. A marginal loss is not the same thing as an undue hardship.

The second form of religious discrimination is decisions that are based, at least in part, on religion.

Typically, these decisions include hiring/firing and promotions/demotions. One would think that employers know the law and would not engage in this activity, but it happens often. For example, an employer could refuse to hire a woman who wears a hijab or give a woman a promotion on the condition that she begin attending church.

A few religious discrimination cases involve employee harassment. If that happens, the employer has a duty to promptly and thoroughly investigate the matter, and then take appropriate action based on the investigation’s results. A breakdown in any phase could give rise to a legal claim.

Contact us today at 312.332.6733 to schedule a free consultation.