Expanding definition of “sex discrimination” under Title VII

The Judiciary continues to act where Congress will not

All employment attorneys—and most employers—know that Title VII bars discrimination based on certain enumerated personal characteristics: race, color, religion, sex, and national origin. It has long been the case that “sex” meant biological sex only, i.e., discriminating against a woman because she is a woman, or against a man because he is a man, is plainly illegal under Title VII.

By contrast, unlike some equivalent state laws, it has long been clear that Title VII does not guard against discrimination based on sexual orientation.  Indeed, Congress has on a number of occasions rejected amendments or new laws that would have added sexual orientation to the list of characteristics protected by federal law.

Three recent landmark federal appellate court decisions have paved the way to a much broader protection of workers against “sex discrimination” based solely on sexual orientation.

The Eleventh Circuit again holds that sexual orientation is not covered by Title VII

Illustrating the power of precedent, just last month a panel of the Eleventh Circuit  reaffirmed, in Evans v. Georgia Regional Hospital,  that “‘Discharge for homosexuality is not prohibited by Title VII….’”  The court therefore found the plaintiff, a lesbian woman with a masculine gender identity and appearance, could not state a claim for sexual-orientation discrimination.

Highlighting the rather incongruous state of Title VII case law, the Evans court then reiterated that discrimination based on gender-nonconformity is actionable sex-discrimination, under Price Waterhouse v. Hopkins.   Accordingly, the court remanded the case to allow the plaintiff to replead a discrimination claim based on gender non-conformity.

The Second Circuit broadens the scope of gender-stereotyping discrimination to protect LGBT employees

In a similar decision, also just last month, the U.S. Court of Appeals for the Second Circuit likewise reaffirmed in Anonymous v. Omnicom Group, Inc. its own longstanding precedent that sexual-orientation discrimination is not barred by Title VII.

And like the Eleventh Circuit did in the Evans case, the Omnicom court affirmed that gender stereotyping is actionable as sex discrimination. However, Omnicom also overruled some prior district court decisions that held it was more difficult for LGBT employees to pursue gender-stereotyping claims, because of the difficulty in separating the two concepts: “In sum, gay, lesbian, and bisexual individuals do not have less protection under Price Waterhouse against traditional gender stereotype discrimination than do heterosexual individuals.”

The Seventh Circuit’s landmark ruling: discrimination based on sexual orientation is sex discrimination

Evans and Omnicom illustrate the rather confusing legal landscape employers must navigate when it comes to sexual orientation and gender identity.  Last year, a Seventh Circuit panel reviewed Hively v. Ivy Tech Community College, a case in which an openly lesbian professor alleged discrimination based on her sexual orientation alone.

The Hively court, much like the its Evans and Omnicom sisters described above, was bound by its precedent and concluded that “Title VII provides no protection from nor redress for discrimination on the basis of sexual orientation.”

Fast forward to this month, and in a remarkable change of course, the entire Seventh Circuit, sitting en banc, has revisited the original Hively opinion and has concluded that “sex” under Title VII does include sexual orientation. In doing so, the Seventh Circuit overturned its own well-established line of cases, such as Hammer v. St. Vincent Hosp. & Health Care Center, Inc., which had repeatedly held that “sex” did not encompass “sexual orientation.”

Some commentators have suggested that the Hively majority was influenced by the Omnicron holding, but that implication misunderstands both cases. Omnicron only reiterated that discrimination based on non-conformity to a gender stereotype is actionable, and then pointed out that this protection extends to LGBT individuals too, something that had only been obscured in some district court cases.

Instead, the Hively majority, in stark contrast to all prior decisions from any federal court of appeals, squarely held that sexual orientation discrimination, standing alone, quite simply is sex discrimination.  The opinion advanced two somewhat complicated reasons for this holding.  First, the majority imported the comparator approach, which is normally applied during summary judgment as a test for causation.  The court concluded that, had Hively been a man, she would not have been discriminated against for having a sexual orientation towards women.

Second, the majority relied on the U.S. Supreme Court’s 1967 opinion in Loving v. Virginia, which held that state laws banning interracial marriages are unconstitutional.  In Loving, The  Court found that bans on interracial marriages was impermissibly based on race, rejecting the state’s argument that the ban penalized white and non-white persons equally. The Hively majority found that understanding directly applicable to the matter of sexual orientation and that discrimination based on sexual orientation is discrimination based on sex, even if in theory the employer might be equally discriminatory against both male and female employees with an LGB orientation.

Three judges dissented, arguing that Congress did not intend in 1964 for Title VII to cover sexual orientation, and that the majority was impermissibly rewriting the statute.

Two interesting concurrences in Hively are worth noting.  Rejecting the dissent’s originalism arguments, Judge Posner threw down the gauntlet, explicitly arguing that the court can and should judicially “update” Title VII based on the experiences of intervening years and society’s changing understanding of “sex.”  “[T]oday we are rewriting Title VII.”

The second concurrence is far less radical (and potentially more influential). In a short, understated opinion, Judge Flaum reasoned that sexual orientation discrimination has two components: “discriminating against an employee because of (A) the employee’s sex, and (B) their sexual attraction to individuals of the same sex.”  Flaum went on to say “This raises the question: Does Title VII’s text require a plaintiff to show that an employer discriminated against them solely ‘because of” an enumerated trait?’”  The answer to that question is simple, and found within Title VII itself:  “‘Except as otherwise provided in this subchapter, an unlawful employment practice is established when the complaining party demonstrates that … sex … was a motivating factor for any employment practice, even though other factors also motivated the practice.’”

This is a reason that is grounded in the language of the statute, and that can draw on existing case law for deciding when unlawful discrimination is a motivating factor. As such, it is one that other circuits can perhaps more readily follow, without having to proclaim they are updating Title VII, or following the rather novel reasons stated by the Hively majority.

Employment law takeaways—coming soon to a court near you?

The employer in Hively now faces the difficult choice between proceeding again in the trial court, or petitioning the U.S. Supreme Court for review, which could invite significant negative publicity.  Most employers do not want to be in that position.

The prudent course is to maintain and enforce workplace policies preventing discrimination against LGBT employees (which may be required anyway under many state laws). Although at this point it is still the law in most circuits that discrimination based on sexual orientation is not actionable under Title VII, Hively shows that could change at any time.  And plaintiffs’ lawyers who previously turned away sexual-orientation based cases may be emboldened to start taking them.


One step closer to legalization

On April 13th, the federal Liberal government tabled the much anticipated Cannabis Act. While many recreational marijuana users now have reason to rejoice, employers across the country are left with unanswered questions as to how the upcoming legalization will affect the workplace.

It’s important to note that although recreational use of cannabis is expected to become legal sometime during the summer of 2018, employees will still be required to show up « fit to work ». Therefore, it will remain possible for employers to discipline employees who are impaired by the use of marijuana while at work – with the exception of approved medical conditions.

The main problem which employers will face lies in the fact that THC levels (THC being the chemical component responsible for the effects associated with inhaling cannabis smoke) remain detectable for a long period of time following the absorption of marijuana. Therefore, when a drug test is administered to an employee, the detection of THC will be evidence of cannabis consumption by the employee. However, it will not necessarily be evidence that the consumption occurred recently or, more importantly, that the employee was impaired while performing his duties. With a potential increase in recreational use of cannabis among workers following legalization, litigation in such cases may also increase and could be costly for employers if they are required to demonstrate actual impairment using experts, medical or otherwise.

Employers would also be well advised to review their workplace policies and ensure that no mention is made of recreational use of cannabis as an illegal activity once the Cannabis Act comes into force. Basically, employers should equate recreational marijuana to alcohol. It will still be possible to forbid possession and use of recreational cannabis in the workplace.

Further questions will be raised regarding the relation between the recreational use of cannabis and safety sensitive positions. For example, in Québec, an employer has the obligation to take the necessary measures to protect the health and ensure the safety and physical well-being of its workers under the provincial Occupational Health and Safety Act. Considering the difficulty of proving actual impairment on the job (contrary to alcohol) because of the presence of THC in an employee’s body long after consumption, can an employer condone the presence of a recreational cannabis user in a safety sensitive position without being in contravention of its duty to provide a safe working environment?

The Bill tabled last week does not provide answers to these important questions. We will keep our readers appraised of any developments on this subject in the near future.

Australian 457 working visa to be abolished – reforms to employer sponsored skilled migration programme announced

The Australian Prime Minister, Malcolm Turnbull, announced yesterday afternoon that the 457 visa will be abolished and replaced with a new Temporary Skill Shortage (TSS) visa to better address genuine skill shortages and protect the Australian local labour force.  The implementation of these reforms will begin immediately and will be completed in March 2018.

Minister for Immigration and Border Protection, Peter Dutton stated the ‘457 visa arrangements will be “grandfathered“.

As part of the Government’s significant reform package to strengthen the integrity and quality of Australia’s temporary and permanent employer sponsored skilled migration programmes, the TSS visa will be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years.

Proposed fees are $1,150 for the short-term visa and $2,400 for the medium-term visa (which is an increase on the current 457 visa fees).

Key reforms, as confirmed by the Department of Immigration and Border Protection (DIBP) yesterday include:

Temporary Skill Shortage (TSS) (which replaces the existing 457 visa)

Introducing the TSS visa with added requirements, including but not limited to:

  • targeted occupation lists which better align with skill needs in the Australian labour market
  • a requirement for visa applicants to have at least two years’ work experience in their skilled occupation
  • a minimum market salary rate which ensures that overseas workers cannot be engaged to undercut Australian workers
  • mandatory labour market testing unless an international obligation applies
  • capacity for only one onshore visa renewal under the short-term stream
  • capacity for visa renewal onshore and a permanent residence pathway after three years under the medium-term stream
  • a non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers
  • strengthened requirement for employers to contribute to training Australian workers
  • DIBP will collect Tax File Numbers and data will be matched with the Australian Tax Office’s records
  • mandatory penal clearance certificates to be provided

Employer sponsored permanent skilled visas (including regional stream)

Tightening eligibility requirements for employer sponsored permanent skilled visas, including but not limited to:

  • the permanent residence eligibility period will be extended from two to three years
  • stronger English language requirements
  • a requirement for visa applicants to have at least three years’ work experience
  • applicants must be under the maximum age requirement of 45 at the time of application
  • strengthened requirement for employers to contribute to training Australian workers
  • employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (set at $53,900 as at 12 April 2016)

Concessions for regional Australia will continue to be available:

  • employers in regional Australia will continue to have access to occupations under the temporary and permanent visas to reflect their skills needs
  • existing permanent visa concessions for regional Australia, such as waiving the nomination fee and providing age exemptions for certain occupations will be retained; consideration will be given to expanding the occupations in regional Australia that are exempt from the age requirement

Reducing lists of occupations for skilled migration visas and the 457 visa from 19 April 2017

From 19 April 2017, the list of occupations will be significantly condensed for skilled migration visas, including the subclass 457 visa.

Further information

We are currently reviewing the implications of the changes and the impacts for our clients. We will provide you with further information on these reforms and their implementation when they are available.

If you have any queries in the interim, please contact Mira Yannicos, Special Counsel and Accredited Immigration Law Specialist on +61 3 8686 6524 or Jemma King, Immigration Consultant on +61 3 8686 6429

When breach of contract by an employer does not equal constructive dismissal

The Ontario Court of Appeal recently gave employees and employers a valuable reminder: a breach of an employment contract does not, in and of itself, constitute a constructive dismissal. Even if the breach translates into hundreds of thousands of dollars not being paid.

In Chapman v GPM Investment Management, the former CEO and president of GPM, a real estate management company, claimed he had been constructively dismissed by GPM after GPM failed to pay him his entire bonus.

The employment contract stated that the employee was to be paid a percentage of GPM’s pre-tax profit as a bonus. When calculating the employee’s bonus, GPM decided to exclude the profit it had earned on the sale of a certain property. The employee disputed this calculation, which had reduced his bonus by $329,687.

For an employee to successfully argue that he or she was constructively dismissed by a unilateral act, he or she must demonstrate that (1) the employer breached the employment contract, and (2) the employer substantially altered an essential term of the contract.

The trial judge had found that GPM’s bonus calculation was incorrect and that the employee was entitled to the $329,687. Thus, GPM had breached the employment contract. However, the Court of Appeal upheld the trial judge’s holding that the dispute between the employee and GPM was merely a dispute over interpreting the employee’s bonus scheme. In other words, GPM had not altered the employment contract.

The Court of Appeal highlighted that, once the bonus wasn’t paid, the employee could have pursued dispute resolution alternatives to settle the disagreement. Suing GPM was not his only option. Thus—despite the large sum of money GPM had refused to pay its employee—the Court of Appeal ultimately determined that the employee had not been constructively dismissed.

Written with the assistance of John Schudlo, articling student. 

Human resources managers can be indirectly liable for harassment

Health and safety of employees is highly protected in France. Employers are  responsible for the prevention of any damage to their employees’ health and safety resulting from their work. Amongst other things, French law requires employers to ensure that their employees are protected from any harassment at work.

But another provision of the French Employment Code, which is far less known outside of France, states that employees are also liable to take care, not only of their own health and safety, but also of that of other employees in the company who could be affected by their behaviour or negligence.

The French Supreme Court recently had occasion to clarify the scope of such principle in a recent decision dated 8th March 2017.

In that case, a wide investigation was launched in a retail store in the south of France (member of a significant distribution network) following the disclosure, by a former employee, of an email revealing a pattern of harassment conducted by the management of the store. In the context of this investigation, around 30 employees testified before a bailiff as to the unacceptable actions of the director of the retail store. The responsibility of the human resources manager was also raised, given in particular that she had tried to protect the director against employees.

Following such investigation, the director of the retail store was dismissed for serious misconduct. The HR manager was also dismissed for misconduct, based on her lack of action against the director’s harassment policy and also based on her breach of her own health and safety obligation. The employer also considered that she was partly responsible for the deterioration of the employees’ working conditions.

The HR manager filed a claim against her employer, arguing she did not commit any misconduct because she did not harass the employees herself.

The Court of Appeal, confirmed by the Supreme Court, dismissed the HR manager’s claim, considering in particular that:

  • She was completely aware of the unacceptable behavior of the director towards the employees, as she worked in close cooperation with him;
  • She did nothing to end the harassment even though as a HR manager, it was her role to ensure a smooth social climate.

This decision is an illustration of an employee’s duty of care. The French employment code provides that all employees may be liable in this respect, taking into account their training and their abilities. HR managers are naturally in the front line given the scope of their duties, and it can easily be imagined that they are subject to a reinforced requirement to protect other employees against any policy of harassment.

Indirect Discrimination in the UK – What must a Claimant Prove?

The Supreme Court in the UK has given its decision in the conjoined cases of Essop v Home Office (UK Border Agency) and Naeem v Secretary of State for Justice, concerning indirect discrimination.  It has held that it is not necessary for a claimant in an indirect discrimination claim to prove the reason why they were put at a particular disadvantage.

Indirect discrimination arises where an employer applies an apparently neutral rule (known as a provision, criteria or practice (PCP)), which puts an employee (and others who share the protected characteristic) at a particular disadvantage compared to others who do not share that characteristic.

The first case involved a requirement for staff at the UK Home Office to pass a core skill assessment test before they could be promoted to a higher grade.  The claimants, who were all from black and ethnic minority backgrounds and aged over 35, failed the relevant test.  Statistical evidence showed that individuals within that group were less likely to pass the test, although the reason for the lower pass rates by this group were not clear.  At the employment tribunal the employment judge held that it was not sufficient to show that the employees had suffered a disadvantage – to prove personal disadvantage they also needed to show the reason why they had failed the test.  The Court of Appeal agreed, holding that the claimant had to show the reason why the requirement put the group at a disadvantage and that they had individually failed the test for the same reason.

The second case involved an incremental pay scale in the Prison Service, which rewarded length of service. Since Christian chaplains had been salaried employees for longer than Muslim chaplains, their average pay was higher than Muslim chaplains. The claimant brought proceedings which claimed the incremental pay scheme indirectly discriminated against Muslim chaplains. The Court of Appeal rejected the claim on the basis that it was not enough to show that the length of service criterion had a disparate impact on the Muslim chaplains, but it was also necessary to show that the reason for the disparate impact was something peculiar to the protected characteristic.

The Supreme Court, in considering both these cases, held that the concept of indirect discrimination had never required an explanation of the reasons why a particular PCP puts one group at a disadvantage. However, what there must be is a causal link between the PCP and the disadvantage, but not necessarily between the characteristic and the treatment.  There was concern expressed that if the claimant did not have to show the reason why they were put at a disadvantage then this would result in “undeserving” claimants who had failed the test for no reason related to the disparate impact, (for example, because they had turned up late or had failed to complete the test) bringing claims.  However, the court clarified that in those circumstances the respondent would be able to argue that the particular claimant was not put at a disadvantage by the requirement, as there was no causal link between the PCP and the disadvantage.  In addition, there would be a “material difference” between the circumstances relating to each case.

There is also no requirement that the PCP puts every member of the group sharing the particular protected characteristic at a disadvantage. For example, some women may be taller and stronger than some men and would therefore be able to meet a height or strength requirement.  However, as a group they may be more disproportionately disadvantaged.

It is also always open for the respondent to show that the indirect discrimination can be objectively justified as a proportionate means of achieving a legitimate aim. The Essop case was therefore remitted to the Employment Tribunal to determine the claims.  In the Naeem case the Employment Tribunal had already found that the PCP complained of was objectively justified and therefore, although the court held that there was indirect discrimination, it was bound by the tribunals factual findings.

The main issue from these cases is therefore the effect on what the claimant has to prove. They effectively remove the additional hurdle which required an employee to explain the reason for the PCP causing the disadvantage.

Not on the Menu: Ontario Human Rights Commission releases findings from restaurant dress code inquiry in new report

The Ontario Human Rights Commission (the “Commission”) recently released the findings from its inquiry on sexualized and gender-specific dress codes in a report entitled, Not on the Menu: Inquiry report on sexualized and gender-based dress codes in Ontario’s restaurants. A series of complaints from restaurant workers prompted the Commission to release a policy position in March 2016 and initiate a human rights inquiry in July 2016, with the aim of proactively reducing problematic practices across the province.

In the report, the Commission reminds employers that sexualized and gender-based dress codes may be discriminatory. While employers are free to have dress codes, they must not offend the Ontario Human Rights Code (the “Code”). Any sex-based differences in dress code must be legitimately linked to the requirements of the job.

The Commission notes that employers should be cautious not to exert pressure on employees to comply with gendered expectations, for example, by mandating heels, makeup, jewellery or revealing clothing. Although the Commission’s own policies and publications are not law, they do have a persuasive effect on tribunals.

According to the report, many employers have taken positive steps to ensure their policies are compliant with the Code, some even instituting confidential e-mail addresses and hotlines for employees to raise questions and concerns. The report also includes several tools and resources for employers, such as sample policies and checklists.

Since all Ontario employers have an obligation to comply with the Code, this report should serve as an important reminder that dress codes must be inclusive and non-discriminatory.

Written with the assistance of Jessica Warwick, articling student.

Private eye: using Facebook to discipline an employee

The Supreme Court of Victoria’s decision of Jurecek v Director, Transport Safety Victoria [2016] VSC 285 clarifies the application of privacy law to an employee’s social media account, specifically in relation to an employer collecting and using information gathered from an employee’s Facebook account when investigating misconduct.

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Federal Government’s 2017 Budget Proposes Changes to Maternity and Parental Leave

The Liberal Government’s 2017 federal budget (“Budget 2017”) proposes changes that affect maternity and parental leaves and associated Employment Insurance (“EI”) benefits.

Currently, EI combined parental and maternity benefits are available at the benefit rate of 55 per cent over a period of up to 12 months. Budget 2017 proposes that this option continue to be available, but parents will alternatively be able to choose to receive EI maternity and parental benefits over an extended period of up to 18 months at a lower benefits rate of 33 per cent of average weekly earnings. Budget 2017 also proposes that women giving birth will be able to claim EI maternity benefits up to 12 weeks before their due date – an increase from the current standard of 8 weeks.

To implement these measures, Budget 2017 proposes to amend the Employment Insurance Act and the Canada Labour Code. While the specifics of the changes will not be known until budget legislation has been introduced, we expect to see changes to the length of job-protected maternity and parental leaves  under the Canada Labour Code. For example, the maximum total duration of a combined job-protected maternity and the parental leave, which is currently 52 weeks, will likely be extended to a period of 18 months. Under the Employment Insurance Act, we expect that the current maximum of 52 weeks of combined maternity and parental leave benefits will likely be revised to allow for a new parent to receive benefits for a longer period of up to a maximum of 18 months at the lower benefit rate (of 33%).  It is not clear yet by how much the maternity benefit period may be extended, or whether it will just be the parental leave benefit period that is extended.

These changes will affect both provincially and federally regulated employees when it comes to EI benefits, but any changes to the Canada Labour Code with respect to the length of these job protected leaves will only impact federally regulated workplaces.

While we will need to await the introduction of the budget implementation legislation to assess the precise changes to the current legislation, employers should take note that changes are on the way. Policies regarding maternity and parental leaves, as well as any top-up policies with respect to EI benefits, may need to be reviewed and revised accordingly.

Written with the assistance of Melanie Simon, articling student.

New codes introduced – Contractors must be aware of enterprise agreement risks

The new national code for the tendering and performance of building work 2016 (Code 2016) commenced on 2 December 2016 to coincide with the re-establishment of the Australian Building and Construction Commission (ABCC). The governing legislation is the Building and Construction Industry (Improving Productivity) Act 2016 (Act).

The Code 2016 applies to building contractors carrying out building work from the first time they submit an expression of interest or tender for Commonwealth funded building work on or after 2 December 2016.

Key aspects of the changes deal with eligibility to express interest, tender for and be awarded commonwealth funded building work.

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