New Prime Inc. v. Oliveira, 139 S.Ct. 532 (2019)

Federal Arbitration Act-Application to Independent Contractors

The primary issue in the recent United States Supreme Court case, New Prime Inc. v. Oliveira was whether an independent contractor was entitled to be excluded from the coverage of the Federal Arbitration Act by§ 1 of the act, as are certain employees that are engaged in interstate commerce. Justice Gorsuch utilized dictionaries and other sources that were available at the time of the passage of the Act in the 1925 to determine the meaning of “workers.” Justice Gorsuch determined that independent contractors would have been classified as “workers” at that time in American history thereby giving them the exclusion from coverage of the FAA today. Also, the Court held that a court should determine whether the Federal Arbitration Act’s Section 1 exclusion for disputes involving the “contracts of employment” of certain transportation workers applies before ordering arbitration.
Additionally the FAA contains language that indicates that the Supreme Court, if given the chance, might rule in the future that § 1 of the FAA excludes coverage of any worker in interstate commerce. Justice Gorsuch stated, “Recall that the Act excludes from its coverage ‘contracts of employment of …any…class of workers engaged in foreign or interstate commerce.’” The Court’s language does not limit the “class of workers engaged in foreign or interstate commerce” to any particular class, as the Court uses the modifier “any” related to the quoted phrase. Based on this language, it does not appear that the Court is inclined to limit the class of employees in interstate commerce, as some courts have done over the years to transportation workers engaged in interstate commerce. For example, in Circuit City Stores v. Adams, 532 U.S. 105 (2001), the U.S. Supreme Court, in a 5-4 opinion ruled that section 1 of the FAA only exempts from coverage “…contracts of employment of transportation workers.” However, the dissent would have ruled that the history of the FAA’s enactment in 1925 made it clear that the FAA was never intended to apply to employment contracts at all. Therefore, it could be that, based on this dissent and the 8-0 decision in the Oliveira case, limiting interpretation of section 1 to the context of 1925 when passed; it is reasonable to believe that the U.S. Supreme Court of today might hold that all employment contracts involving interstate commerce are not subject to, and are exempted from coverage of the FAA by section 1 (although, this could be a “long-shot” also).

Davenport v. Edward D. Jones & Co. 891 F.3d 162 (5th Cir. 2018)

Sexual Harassment-Quid Pro Quo-Exhaustion of Administrative Remedies

Employee alleged that her supervisor sexually harassed her by attempting to get her to “date” a third party individual who might do business with the company. The employee quit and filed suit alleging quid pro quo sexual harassment after filing a complaint with the EEOC. The District Court granted summary judgment against the employee. The Fifth Circuit held that the district court properly dismissed the employee’s constructive discharge quid pro quo claim for lack of exhaustion of administrative remedies because her description of the nude picture incident and resulting leave of absence was brief and she suggested no link between that incident and her departure from the employer. However, although the employee may have failed to exhaust her administrative remedies, the employer waived any exhaustion argument by declining to raise that argument below or on appeal. The employee did not allege that the bonuses were conditioned upon her acquiescence to advances from her supervisor. The Court held that the employee produced no evidence that the supervisor and employer denied her a bonus because she refused to date a third party.

Texas Department of Criminal Justice v. Flores, 555 S.W.3d 656 (Tex.App. 2018)

Plea to Jurisdiction-Disability Discrimination-Constructive Discharge-Retaliation

In a corrections officer’s (employee) disability discrimination and retaliation claim against the Texas Department of Criminal Justice (employer), the employer met its initial burden to conclusively show that the officer, who had been on leave for back pain, was not disabled after she returned to work with a full release from her physician holding that employee failed to raise issue on whether episodic back condition existed at time of termination. As to her retaliation claim, the officer created a fact issue regarding constructive discharge based on evidence that she was told she had a choice of resigning or being fired. She also raised a fact issue regarding causation because, although there was a five-month gap between her taking leave and her discharge on purported disciplinary charges, she was on leave for that five months and was discharged as soon as she returned from her leave. Court held this was a sufficient time proximity especially since the return to work was the first opportunity for the employer to retaliate against her because of being off on medical leave. Court also said that “…it also is true that here is no hard-and-fast rule that any specified amount of time is too removed for an inference of causation. Especially where a defendant retaliated at the first opportunity that is presented, a plaintiff will not be foreclosed from making out a prima facie case despite a substantial gap in time.”

City of Granbury v. Willsey, 2018 Tex. App. LEXIS 1928

Plea to Jurisdiction-Age-Gender Discrimination-Pleading Requirements for Prima Facie Case

Because a former city employee’s pleadings failed to state a prima facie case for age discrimination against the city in the reduction-in-force context, she did not state a claim for which immunity was waived under the Texas Commission on Human Rights Act. The employee’s pleadings did not state a prima facie case for gender discrimination and thus did not state a claim for which immunity was waived under the Act, as she did not plead she was qualified for her position as a permit clerk. Her pleadings did not plead a prima facie case of retaliation, as she did not allege what she did or said that allegedly caused the city to retaliate against her.
In the context of age discrimination, a terminated employee is replaced by another person when the terminated employee’s position is filled by that person and that person is assigned the terminated employee’s former job duties. Consequently, a terminated employee is not replaced by a person who temporarily assumes the terminated employee’s job duties or a person who only takes over a part of those duties. When a terminated employee’s job duties are distributed among other employees after termination, those employees do not replace the terminated employee. This is not to say, however, that to come under this provision of the Texas Labor Code, a terminated employee must be replaced by a new hire. It is possible for a terminated employee to be replaced by someone who already works for the employer so long as that employee completely takes over the terminated employee’s job duties. This could be a common occurrence in a large company or an entity where promoting from within is the preferred method of hiring. A determination of whether an employee was actually replaced by another requires an inquiry into the job position and duties performed by the terminated employee and an inquiry into the work performed by the person who is alleged to have replaced that employee.
In a reduction-in-force case, a plaintiff makes out a prima facie case of age discrimination by showing the following: (1) that she is within the protected age group; (2) that she was qualified for her employment position; (3) that she has been adversely affected by the employer’s decision; and (4) that there is evidence, circumstantial or direct, from which a factfinder might reasonably conclude that the employer intended to discriminate in reaching the decision at issue. To show that she was qualified for the position she held at the time she was terminated, a plaintiff should show that she continued to possess the necessary qualifications for her job. To set forth the fourth prong, a terminated employee must plead that she was either (1) replaced by someone outside the protected class, (2) replaced by someone younger, or (3) otherwise discharged because of her age. To establish a prima facie case of gender discrimination, a plaintiff is required to prove that (1) she is a member of a protected class, (2) she was qualified for her position, (3) her employment was terminated, and (4) she was treated less favorably than similarly situated members of the opposing class.
The court properly denied the part of the city’s plea to the jurisdiction asserting a lack of jurisdictional facts to establish that the employee was not replaced by someone outside the protected age and gender classes. The Court remanded the case to allow the employee to replead in an attempt to plead a prima facie case and conduct additional discovery if allowed by the trial court.

Nall v. BNSF Railway Co., 912 F.3d 263 (5th Cir. 2018)

ADA-Direct Threat-Objectively Reasonable Standard. BNSF Railway Co., 912 F.3d 263 (5th Cir. 2018)

Under the ADA’s direct threat proviso, 42 U.S.C. § 12113(b), an employer may reject a disabled person who would present a direct threat to the health or safety of other individuals in the workplace because of that person’s impairment. In this case, a railroad refused to allow an employee to return to his job as a trainman because the railroad believed his impairment,Parkinson’s disease, would affect his balance and reaction time and would make his working as a trainman unsafe. The district court granted summary judgment for the employer but the Fifth Circuit reversed. There were issues of fact of whether the employer’s safety concerns were objectively reasonable. Doctors disagreed whether the plaintiff could safely perform job duties, the plaintiff passed the employer’s field test for the job, the employer gave shifting descriptions of the essential duties of the job, and certain comments by managers could be viewed as evidence of discriminatory intent.

Luke v. CPlace Forest Park SNF, L.L.C., 608 Fed. Appx. 246 (5th Cir. 2019)

Pregnancy Discrimination-Heavy Lifting Requirement-Denial of Accommodation.

The federal Pregnancy Discrimination Act does not require an employer to accommodate an employee limited by pregnancy because of the pregnancy, the employer must not discriminate in granting accommodations for other employees similarly limited for reasons other than pregnancy. In this case the employer refused to accommodate the plaintiff by excusing her from heavy lifting requirements of her job. The district court granted summary judgment for the employer and the Fifth Circuit affirmed. There was no evidence that the employer’s reason for terminating the plaintiff, which was inability to satisfy the heavy lifting requirement,was a pretext for pregnancy discrimination. Also, the employer did not offer light-duty positions or other accommodations to other employees whose medical restriction prevented heavy lifting.

Solis v. S.V.Z., 566 S.W.3d 82 (Tex. App.—Houston [14th Dist.] 2018)

Chapter 21 Texas Labor Code or Title VII Preemption of Sexual Harassment Claims

In a sexual harassment case involving a 16-year-old employee and her 26-year-old supervisor, the Court of Appeals held that the trial court’s erroneous instruction probably caused the rendition of an improper judgment because the jury was prohibited from considering the fact that the employee consented to a sexual relationship with her supervisor. Proper jury instructions may have resulted in a different assessment of damages. The Court of Appeals also held that the limitations period on the employee’s harassment claim was tolled during the period of her minority, and her administrative complaint was timely because it was filed before she reached the age of eighteen under Tex. Civ. Prac. & Rem. Code Ann. § 16.001. Also, in B.C. v. Steak N Shake Operations, Inc., 512 S.W.3d 276 (Tex. 2017), the Texas Supreme Court held that Chapter 21 of the Texas Labor Code and Title VII preempt a plaintiff’s tort claim for sexual assault or battery if the gravamen of the plaintiff’s allegations is sexual harassment. In this case the court applied the six-part test from B.C. v. Steak N Shake Operations, Inc for determining whether discrimination law preempted a tort claim for sexual assault/battery against an employer based on a supervisor’s conduct that culminated in statutory rape. Several of the factors pointed in favor of preemption. Among other things, there was evidence of quid pro quo harassment by the supervisor, such as by promising better working conditions in return for sex, and the conduct in question persisted over a period of employment and was not a single assault. Because of these factors, the court held that the tort claim against the employer was preempted and, therefore, failed.