Fifth Circuit Court Agrees With Other Circuit Courts in White Collar Exemption Overtime Limit

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On September 11, 2024, the Fifth Circuit Court affirmed that the U.S. Department of Labor can impose minimum salary requirements for white collar overtime pay under the Fair Labor Standards Act. The Fifth Circuit Court joins the Second, Sixth, Tenth, and D.C. circuits in holding that the DOL has the statutory authority to promulgate minimum salary requirements.

The case prompting these comments is Mayfield v. Department of Labor. This decision leads us to explore four questions from an employment law perspective: what we know, what we do not know, what happens next, and what are HR Managers supposed to do now?

Understanding Employee Classification, Employer Obligations and Overtime Limit with Kilgore & Kilgore

Our Texas employment lawyers are following this matter closely. We can help you understand the shifting regulations. Click this link to see our October 2023 post on the issue. Whether you are a business owner, an employee, or an HR manager, you need to understand how to comply with new overtime rules. Reach out to us if you have questions about employee classification, overtime pay, compensation rules, white collar exemptions, and how to comply with new overtime rules. Use this link to Contact Us or call us at 214.969.9099. Click on this link Wage and Hour Compliance to learn about our Employee Wage and Hour Law Practice.

2019 Rule Challenged: Mayfield v. Department of Labor

Robert Mayfield is a Texas fast food employer whose store managers became entitled to overtime as of January 1, 2020, under a change in DOL guidance known as the 2019 rule. The change had obvious economic consequences for all concerned. Mayfield sued the DOL in 2022, arguing that “the DOL lacks, and has always lacked, the authority to define the [overtime rules] in terms of salary level, as opposed to the duties-based test in the statute.”

The U.S. District Court for the Western District of Texas granted the DOL’s motion for summary judgment, finding the agency did have the authority. On appeal, the Fifth Circuit Court affirmed the District Court’s decision and upheld the DOL action under the approach required by the U.S. Supreme Court’s recent decision in Loper Bright v. Raimondo.

Who is an EAP Employee?

The FLSA requires that covered nonexempt employees must receive overtime pay at a rate not less than one-and-a-half times the regular rate of pay for hours worked over forty per workweek. The FLSA takes minimum salary and overtime pay protections away from executive, administrative, and professional workers (often shorthanded as EAP, white-collar, or nonexempt employees), presumably on the theory that they can negotiate decent salaries. To be considered an EAP employee, a worker must primarily perform executive, administrative, or professional duties, as provided under the DOL’s duties test. Since the FLSA became law in 1938, the DOL has also used a salary-level test as part of its criteria for the white-collar exemptions.

Calculating Overtime Pay Under the New Rule

The salary threshold is updated periodically. It is not easy navigating the overtime pay rules in an evolving legal climate. In 2019, DOL issued a rule raising the minimum salary required to qualify for most EAP exemptions from $455 week ($23,660 annually) to $684 per week ($35,568 annually), an increase of 50.3 percent. In 2024, that salary level was updated again. Effective as of July 1, 2024, the 2024 rule raises the minimum salary threshold to $844 per week (equivalent to $43,888 per year) and to $1,128 per week (equivalent to $58,656 per year) effective as of January 1, 2025. The 2024 rule requires that the salary threshold increase every three years thereafter – another significant increase.

Implementing New Overtime Rules in the Workplace

Both the 2019 and the 2024 rules are designed to protect that vulnerable group of strivers — workers who are moving from hourly to professional employment by sheer dint of working hard and being good at their jobs. Sadly, many can find themselves taking home less when they get that coveted promotion and lose their entitlement to overtime pay. On the other hand, this can seem like a zero-sum equation. What employees gain employers lose. The increased threshold can be a big hit to businesses.

Employment Practices, Workforce Management, Overtime Limit, and Unexplored Territory

The Fifth Circuit Court’s decision in Mayfield firmly establishes that the DOL may consider salary as well as the nature of an employee’s duties when determining who is covered by the FLSA’s rules on minimum salary and overtime pay. Unless and until overturned by the U.S. Supreme Court, that principle is binding on Texas federal courts considering either the 2019 or 2024 rules. The Mayfield case does not decide:

  • whether the actual salary levels of the 2019 rule can stand;
  • whether the 2024 salary threshold increases are valid;
  • whether the 2024 increases effectively eliminate the statutory duties test; or
  • whether the provision in the 2024 overtime rule allowing for an automatic
    increase in the salary threshold every three years is valid.

Neither does Mayfield explicitly address a recent decision of the Eastern District of Texas that preliminarily enjoins enforcement of the 2024 rule with respect to the State of Texas as an employer. That is a lot of unexplored territory.

What Happens Next?

Robert Mayfield may request an en banc rehearing and/or seek Supreme Court review. In their dissent to Helix Energy Solutions Group, Inc. v. Hewitt, Associate Justices Alito and Kavanaugh seem to have invited a petition for certiorari. Although Mayfield is about the 2019 rule, a Supreme Court reversal of the lower court’s decision could have ramifications for pending challenges to the DOL’s 2024 rule.

Three lawsuits are already underway:

  • State of Texas v. U.S. Department of Labor – The Eastern District’s injunction against enforcement of the 2024 rule is expected to make its way to the Fifth Circuit Court before January.
  • Flint Avenue LLC v. U.S. Department of Labor – in the Northern District of Texas, also involves a preliminary injunction against enforcement of the 2024 rule. Cross-motions for summary judgment are pending. 
  • Association of Christian Schools Int’l v. US. Department of Labor – This case was filed in a Tennessee federal court. At the parties’ joint request, this case is now pending in the District of Columbia federal court.

How to Comply With the New Overtime Rules

The short answer is to sit tight. For now, employers should continue to prepare for the January 1, 2025, salary threshold increase. The longer answer is to be prepared for changes to the statutes.

Employee Rights Under New Overtime Regulations

Kilgore attorneys understand the complexities of employer obligations and employee rights. Our Texas employment lawyers have a depth of experience with wage and hour law, overtime pay, employee rights, and wage claims. We are well prepared to handle the ongoing changes in wage laws to help our clients. Use this link to get the conversation started Contact Us. Or give us a call at (214) 969-9099.

Fifth Circuit Court Slashes Jury Award in Employment Discrimination Lawsuit

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This is a story about a vanishing jury award. It is a cautionary tale for employees who believe that they have been discriminated against at work and employers who would prefer to avoid Section 1981 claims of the Civil Rights Act of 1866 and/or Title VII of the Civil Rights Act of 1964.

In February 2024, in the case of Harris v. FedEx, the Fifth Circuit Court reduced Jennifer Harris’ jury award of $366,160,000 to $248,619.57 – less than 0.1 percent of the original amount. There are four factors at play here:

  • Section 1981 claims;
  • the damages cap applicable to Title VII claims;
  • a punitive damages award; and
  • a limitation provision in Harris’s employment contract that required her to bring any claims against FedEx, her employer, “within the time prescribed by law or 6 months from the date of the event forming the basis of [her] lawsuit, whichever expires first.”

The result the court reached about Title VII damages and punitive damages factors was relatively predictable. Their decision on the limitation provision is news.

Workplace Discrimination and Retaliation Claims

FedEx hired Harris, an African American woman, as an Account Executive in 2007. Her employment contract contained the limitation provision described above. At first, she was successful at her job, and FedEx promoted her to District Sales Manager in 2017. Her new supervisor was Michelle Lamb, a white woman. A year later, Harris received an award that recognized her success in her new role.

However, according to FedEx, her performance declined thereafter. Harris and Lamb met several times to discuss improvement strategies, allegedly without success. In early March 2019, Lamb suggested that Harris step down as a District Sales Manager. Harris claimed to have been blindsided, and shortly thereafter complained of race discrimination. Her claims were investigated and dismissed as unsubstantiated.

Lamb continued to cite Harris for unacceptable performance and an insubordinate attitude. Harris filed several more complaints through HR channels, which FedEx investigated. Harris filed an EEOC complaint. The supervisory slugfest continued for ten more rounds. FedEx fired Harris on January 8, 2020.

Harris filed a lawsuit in May 2021, sixteen months after her termination. Her lawsuit alleged race discrimination and retaliation claims under Section 1981. FedEx claimed that Harris’s claims were time-barred by the six-month limitation provision in her contract. Harris was permitted to amend her complaint to add claims for race discrimination and retaliation under Title VII. The case proceeded to a jury trial in the Southern District of Texas.

In 2023, the Southern District Court ordered FedEx to pay $366 million in damages. This included $120,000 in past compensatory damages, $1,060,000 in future compensatory damages, $365 million in punitive damages and 4.69 percent post-judgment interest. That sum, the jury reasoned, was justified by the company’s decision to fire her for complaining both internally and to the EEOC that she was being treated worse than white colleagues. FedEx appealed to the Fifth Circuit.

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Picking Apart the Fifth Circuit’s Opinion

Section 1981 does not contain a statutory limitations period, so courts typically apply the most analogous state statute of limitations. In Texas, that is generally either two or four years, depending on the type of claim alleged. Filed sixteen months after her firing, the Harris lawsuit would have fallen within either of the aforementioned limits but for the six-month contractual limitation. The District Court refused to enforce the limitations provision, finding that it violated public policy.

The Fifth Circuit Court disagreed and concluded (for reasons discussed below) that the contractual limitations period was valid and enforceable as to the Section 1981 claims. That left Harris able to collect only Title VII damages. Since 1991, Title VII damages have been capped at $300,000 for companies with more than 500 employees. That cap is not indexed for inflation. But if it were, it would now be over $670,000. The Fifth Circuit Court’s reduction of the District Court jury’s award thus began with that $300,000 amount.

A Title VII plaintiff may ordinarily recover punitive damages only on proof that the defendant acted with malice or reckless indifference to that individual’s federally protected rights. Even if individual employees acted with the requisite bad intent, an employer may avoid vicarious punitive damages liability if it can show that it made good faith efforts to comply with Title VII.

Punitive Damages Awarded by District Court Slashed on Appeal

By far the largest portion of the District Court jury’s award to Harris was the punitive damages element. Relying on FedEx’s in-depth investigation of each of Harris’s discrimination and retaliation claims and the company’s refusal to discipline her for alleged insubordination while the process continued, the Fifth Circuit Court found that FedEx’s actions did not meet the malice or reckless indifference threshold. It consequently vacated that entire portion of the jury’s $365 million punitive damages award.

The Six-month Contractual Limitation of Section 1981 Claims

The Fifth Circuit Court found that the limitation period was reasonable and enforceable for three reasons:

  • First, the court rejected Harris’s argument that she had not knowingly and voluntarily accepted the provision, holding that “parties to a contract have an obligation to protect themselves by reading what they sign. and, absent a showing of fraud, cannot excuse themselves from the consequences of failing to meet that obligation.”
  • Second, since Congress did not specify a statute of limitations in Section 1981, it was implicitly willing to live with a wide range of limitations periods. Further, since Section 1981 claimants are not required to pursue administrative remedies before filing a lawsuit, a six-month limit is adequate.
  • Finally, the Fifth Circuit Court rejected Harris’s argument that the limitations provision was rendered void by Section 16.070 of the Texas Civil Practice & Remedies Code. That section prohibits contractual provisions “that purport[] to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years.” The Fifth Circuit Court held that Harris had waived this argument by neither raising it at trial nor citing authority to support its application to a statutory, rather than a breach of contract claim.

The Fifth Circuit Court’s decision may be open to challenge, but for the moment, it is reasonable to assume that it has had the last word on the subject. Employers and employees must now think about how to go forward.

Suggested Strategies for Employers and Employees

If they have not done so already, employers may want to consider adding language to employment contracts that mirrors the limitation period contained in Harris’ contract. Even where negotiation is not a realistic option, employees should always make sure that they read and understand the contracts they sign. Consult with an experienced employment lawyer promptly when disputes arise so that statutory and contractual limits do not foreclose the option of filing a lawsuit.

Kilgore & Kilgore Can Help you with Your Employment Contract and Employer-Employee Disputes

Consult with an experienced employment lawyer when disputes arise so that statutory and contractual limits do not foreclose the option of filing a lawsuit. Experience counts as laws evolve. Our Texas employment lawyers have experience with workplace claims under a variety of state and federal laws. Contact us if you believe that you have been the victim of discrimination, harassment, retaliation, wrongful termination, or other workplace issues. Click here to get the conversation started contact Kilgore & Kilgore.

Texas Lawsuits Challenge the New FTC Proposed Noncompete Rule

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Within hours of the Federal Trade Commission’s (FTC) publication of a proposed new rule that would ban many noncompete agreements, the U.S. Chamber of Commerce and other business groups’ lawsuits are likely to delay or derail implementation of the new rule. Eventually, a Supreme Court decision may strike down the issue under what it terms the major questions doctrine. The first decision, in Ryan LLC v. FTC in the Northern District of Texas, is expected on July 3, 2024.

On June 13, 2024, Judge Ada E. Brown of the Northern District of Texas Dallas Division, determined that a hearing on the plaintiff’s request for injunctive relief was not necessary. A second lawsuit, Chamber of Commerce v. FTC, filed in the Eastern District of Texas, was stayed pending the Northern District’s decision on the Ryan claims. The FTC is also facing a challenge in the Eastern District of Pennsylvania by a Pennsylvania-based tree trimming company. Some observers see an attempt to create a split between federal circuits, which could be an avenue to Supreme Court review. Here we go. Issue is joined, as lawyers say.

Check Your Employment Contracts to Assess the Validity of Noncompete Agreements Under the FTC Noncompete Rule

Cautious employers and employees might do well to regard their existing noncompete agreements as valid. Employers may also want to evaluate whether those that limit the actions of lower-paid employees demonstrably serve an important business interest. Employees with noncompete clauses in their employment contracts or as separate documents might wish to evaluate them in the context of their overall careers. Is career growth being stifled? Are managers or coworkers subduing your ideas? Some believe noncompete agreements limit the growth of individuals, industries, and companies, which is why the FTC promulgated its new noncompete rule.

Proposed FTC Noncompete Rule and Workforce Dynamics

On April 23, 2024, the FTC issued a proposed final rule rooted in a finding that it was an unfair method of competition — and therefore a violation of section 5 of the Federal Trade Commission Act — for persons to enter into noncompete agreements with workers on or after the final rule’s effective date. That date was then expected to be September 4, 2024. That proposed rule banned all NEW noncompete agreements as of September 4, 2024.

New Worker Definitions Within the Proposed FTC Noncompete Rule

With respect to existing agreements, the proposed rule distinguishes between senior executives and other workers. The FTC defines senior executives as those earning more than $151,164 annually who are in a policy-making position. For senior executives, existing noncompete agreements could remain in force after the September 4, 2024, effective date.

For everyone else, the FTC’s rule is expansive. Worker is defined to include independent contractors, externs, interns, volunteers, apprentices, and sole proprietors providing services. The rule also broadly defines noncompete clauses to mean any other clauses that penalize a worker for or function to prevent a worker from competing. The rule also prohibits clauses that operate as de facto noncompetes, including overly broad non-disclosure agreements, non-solicitation clauses, and training and repayment agreement provisions. In addition, any provision offered in exchange for the prohibited agreement, such as severance pay, would remain intact. The proposed rule would not affect:

  • banks, savings and loans, and federal credit unions;
  • common ground carriers and air carriers; and
  • members of the livestock, meat, and poultry industries who are otherwise

Business Exceptions and Business Ownership Strategies

The proposed rule also contains a sale-of-business exception for individuals with at least a 25 percent ownership stake in the business. It is not yet clear how the proposed rule would affect employee benefit plans or consulting agreements that contain claw back clauses requiring repayment of previously paid compensation in the event of a non-compete breach.

The New FTC Noncompete Rule Offers Potential Good News for Workers and Companies

The FTC anticipates that implementation of its Proposed Final Rule would:

  • Reduce health care costs by $74-$194 billion over the next ten years;
  • Cause the creation of more than 8,500 additional new businesses each year;
  • Foster innovation, as measured by an average of 17,000 to 29,000 more patents
  • Increase worker earnings by as much as $400-$488 billion over the same period.

Predictions from Scholars on the Proposed New FTC Noncompete Rule

In an article published by the American Bar Association, many predict that under the current court climate, challenges have a good chance for decisions that may strike down of the new rule. The plaintiffs argue that:

  • FTC’s authority over non-compete clauses does not exist. The FTC lacks authority to promulgate such a rule. It has no rulemaking authority on this issue, especially because Congress has declined to act on the matter.
  • It fails the newly adopted major questions doctrine of the current Supreme Court.
  • The Supreme Court’s stance on noncomplete agreements.
  • The rule is arbitrary and capricious.

Noncompete Agreements in Today’s American Economy and the Workforce Mobility Act of 2023

Instead of looking at this from the top down, let us view it from the bottom up. Does a Jimmy John’s sandwich maker or delivery person need to be restrained from taking a job at Subway, or another job to protect the corporate owners? Does a threat exist?

In February 2023, a bipartisan group of senators re-introduced a bill called the Workforce Mobility Act of 2023. This legislation would largely ban the use of noncompete clauses in employment contracts nationwide as a matter of federal law. It went nowhere. Nonetheless, does this initiative anticipate a Supreme Court move to strike down the proposed rule if it becomes final?

Our Employment Lawyers Will Answer Your Employment Contract Questions

Protect Yourself: See our article about employment contracts. Click here Employment Contracts in Texas. For another noncompete article, click here Noncompete Enforceability in Texas.

Protect Your Business: Click here to reach out to our business lawyers contact Kilgore & Kilgore. Now is the time to review your company’s noncompete agreements and employment agreements to ensure they are aligned with prevailing Texas and federal law.

Buckle up, Buttercup

Kilgore Law can help you with business owner strategies that prepare your company for employment law changes in 2024. To keep good employees in a competitive business environment, it is key to understand the legal implications of new noncompete rules and the impact of noncompete agreements on employees in their desire for innovation increase and career growth. We can assess your unique situation and craft the best options for your business going forward.

Position your company to be nimble, in anticipation of changes imposed by new laws affecting your business and workforce dynamics. Business owners and executives should review their employment and vendor contracts annually. We will help you assess your situation and craft the best options for you going forward. Click this link to learn more about our Executive Compensation law practice. Use this link to get the conversation started Contact Kilgore & Kilgore.

New Harm Standards for Workplace Discrimination May Increase Employer Liability

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Legal interpretation of unlawful employment practices is evolving. The Supreme Court and several appeals courts have rendered recent decisions that are changing the legal standards for discrimination in employment law under Title VII of the Civil Rights Act from the traditional interpretations. As a result of these decisions, the legal interpretation of employer accountability, that is, actions that harm employees, although historically acceptable practices, may now constitute unlawful employment actions.

This evolution opens the door for legal claims that previously were considered unacceptable by courts. Consequently, employers should learn that their DEI policies (diversity, equity, and inclusion policies) must change with the times. And employees may have legal recourse where there was none previously.

Title VII Legal Interpretations Change for Workplace Discrimination

On April 17, in Muldrow v. St. Louis, the U.S. Supreme Court held that an employee challenging a job transfer under Title VII of the Civil Rights Act of 1964 must show that the transfer brought about some harm with respect to an identifiable term or condition of employment, but that the harm need not be significant. The decision resolved a split between the federal circuits and is, in some ways, similar to the Fifth Circuit’s decision in Hamilton v. Dallas County, which we wrote about in 2023. In both cases, the employee’s rank and pay remained the same, but other factors, such as responsibilities, prestige, or schedule, changed. The impact of the Muldrow decision on workplace discrimination may mark the beginning of the evolution of how Title VII affects workplace discrimination.

Effect on Future Discrimination Lawsuits

The full implications of Muldrow are not yet clear. Many more employees who believe that they are the victims of workplace discrimination may be able to succeed in Title VII lawsuits. On the other hand, the new standard of Muldrow may bolster challenges to diversity, equity, and inclusion (DEI) policies in employment.

Involuntary Transfer at the Heart of the Supreme Court Decision

Sergeant Jatonya Clayborn Muldrow was a patrol detective in the Intelligence Division of the St. Louis Police Department. From 2008 to 2017, she worked on cases involving public corruption, human trafficking, gun crimes, and gangs. The position was a traditional eight-hour workday Monday through Friday. During her assignment to the Intelligence Division, Muldrow was deputized as a task force officer by the FBI’s Human Trafficking Unit. This deputization provided Muldrow with privileges equivalent to those of an FBI agent, including entry to FBI field offices, use of an unmarked FBI vehicle, and the potential to earn $17,500 in overtime pay.

In 2017, Michael Deeba joined the Intelligence Division as its new commander. He sought to replace Muldrow with a male officer who he felt was better suited for the dangerous work the Intelligence Division handled. Sergeant Muldrow was transferred to a uniformed job against her wishes, an involuntary transfer. In her new position, Muldrow’s duties involved supervising the day-to-day activities of neighborhood patrol officers and administrative tasks. She no longer had status in the FBI or an unmarked take-home car. Rather than working from Monday to Friday, her new hours involved a rotating schedule and frequent weekend shifts, and she lost opportunities for overtime pay.

Legal Interpretation Challenge to Involuntary Job Transfers in Courts

Muldrow sued the City of St. Louis, alleging gender discrimination and retaliation for her reports of discriminatory practices in violation of Title VII. The Eastern District of Missouri focused on whether the transfer damaged Muldrow’s financial standing or career, concluded that it did not, and granted summary judgment to the city. Muldrow appealed to the Eighth Circuit, which affirmed the District Court’s decision. The Supreme Court granted certiorari in June 2023.

Civil Rights Legislation

Title VII of the Civil Rights Act provides that:

“It shall be an unlawful employment practice for an employer –

  • (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or
  • (2) to limit, segregate, or classify employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.”

The Eighth Circuit had interpreted this to require a “materially significant disadvantage.” Muldrow argued that the magnitude of the harm was irrelevant and that the Eighth Circuit’s interpretation overstepped the plain language of the statute.

Federal Legal Interpretation: Supreme Court Decision on Workplace Discrimination

In its April opinion, the Supreme Court held that, to state a claim for discrimination under Title VII, an employee must show only:

  • the employer’s action was discriminatory, and
  • that the employee suffered “some harm” respecting an identifiable term or condition of employment.

The “some harm” threshold is a downward departure from the significant, material, or serious harm standard previously applied by the Eighth Circuit.

In 2023, the Fifth Circuit faced a similar question in Hamilton v. Dallas County. Prior to its decision in Hamilton, the Fifth Circuit had interpreted Title VII to require an “ultimate employment decision” such as hiring, firing, granting leave, or a compensation determination. The Fifth Circuit reversed itself in that case, to hold that the “ultimate employment decision” limitation was simply not in the language of Title VII. Hamilton brought the Fifth Circuit into line with the Sixth and D.C. Circuits. In Muldrow, the Supreme Court seems to set this as a national standard.

More Employees May Claim Workplace Discrimination

More workers throughout the country may be able to succeed in demonstrating workplace discrimination under Title VII. Employers will certainly become involved in reviewing their policies about involuntary transfers. The new “harm but not significant harm” standard, may also support challenges to employer DEI policies, the newest incarnation of “reverse discrimination” lawsuits. In any event, both employers and employees can benefit from the advice of experienced employment lawyers.

Kilgore & Kilgore Employment Lawyers Can Help You With Your Employment Law Claims

Contact us if you believe that you have been the victim of discriminatory actions, workplace harassment, retaliation, wrongful termination, or other employment issues. Experience counts as laws evolve. Our Texas employment lawyers have experience with workplace gender bias claims under a variety of state and federal laws. Click here to get the conversation started contact Kilgore & Kilgore. Fill out and submit the form on our website. We will reach out to you to see if we can help.

Compensation for Unpaid Hours in Wage Disputes: Employee vs. Independent Contractor

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In July 2023, the Court of Appeals for the Fifth Circuit held that three window blind installers deserved the opportunity to go to trial on the issue of whether their employer owed them unpaid overtime. Earlier, a lower court, the Southern District of Texas, determined that the installers could not provide adequate proof that they had worked the hours claimed. It therefore granted summary judgment to the employer without ever reaching the issue of whether the workers were employees. The installers appealed.

The Fifth Circuit dusted off a 1946 U.S. Supreme Court precedent to hold that the installers had presented enough evidence of hours worked to merit a trial, known as Anderson v. Mt. Clemens Pottery Co. That case is still law, but it is curious that the Fifth Circuit dove back into old employment law jurisprudence. Generally, a worker who brings a claim for unpaid overtime bears the burden of proving that he or she was not properly paid for hours worked. This is easy when an employer keeps accurate records of the employee’s hours. But Mt. Clemens Pottery recognizes that employers may have an incentive not to keep full and accurate records of hours worked, especially since those records can be used to prove overtime liability.

Employee Rights and Unpaid Overtime Wage Claim

The case involves two intertwined questions of employment rights:

  • first, whether the installers could show that they had worked hours that should have been paid as overtime; and
  • second, whether they were employees who were entitled to the wage and hour protections of the Fair Labor Standards Act (FLSA) or whether they were independent contractors with only contract rights.

If they could not provide proof of hours worked, then there was no reason to tackle the question of whether they were employees. Similarly, if they were self-employed contractors, there was no reason to get to the question of overtime compensation. In other words, if the answer to either one of these questions is no, their claims would fail.

Work Hours Documentation – Long Hours, Flexible Schedules

Jose Flores, Jean Romero-Rodriguez, and Brandon Villarreal installed blinds for FS Blinds. They measured windows, delivered and installed the window treatments, and repaired damaged blinds — mostly in new construction. Each managed his own schedule throughout the day. So long as the day’s job list did not specify otherwise, each worker could complete the jobs in any order. If they failed to complete all the jobs on the day’s list, they could roll jobs over to the next day.

Each installer worked a different schedule. Job scheduling differed from day to day, but all agreed that they worked around 70 hours a week. FS Blinds paid them by the job and kept no records of their hours. The installers’ evidence of underpayment included work orders and their own testimony as to starting and quitting times. Some of this was also corroborated by FS Blinds. The District Court was not persuaded. It found that the installers’ evidence was not enough to establish a prima facie case and granted FS Blinds’ motion for summary judgment.

Kilgore & Kilgore Protects the Legal Rights of Workers Including Wage Hour Compliance Issues

If you have questions about work hours documentation, hourly wage laws, worker classification, legal rights of workers, independent contractor status, or other employee rights issues, reach out to us. Contact us using this link Contact Kilgore Law or call us at 214.969.9099. Click on this link to find out about our Wage and Hour Dispute Resolution services.

FLSA Employee Overtime Rights, Wage Law Compliance, and Wage Claims

The federal Fair Labor Standards Act (FLSA) requires that covered employees must receive overtime compensation for hours worked over 40 per workweek, at a rate not less than one and one-half times the regular rate of pay. A lot is buried in this sentence, though. Among the thorny questions are how to prove hours worked and who is a contractor and who is an employee (known as worker classification).

Employment Law and Worker Protection

The absence of records creates a difficult dilemma for workers. In Mt. Clemens, the Court created a two-step solution to the problem:

Step One: When the employer’s records are inadequate or nonexistent, the employee’s burden of proof must necessarily be lighter. If the worker:

  • proves that he has in fact performed work for which he was improperly paid; and
  • produces sufficient evidence to show the amount and extent of that work;

then, as a matter of reasonable inference, a court may preliminarily conclude that the work was done.

Step Two: The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference to be drawn from the employee’s evidence.

A Subtle Shift in Labor Law Policy and Labor Rights Enforcement

It is interesting to note that the Fifth Circuit reached back almost 80 years to find controlling wage and hour law precedent. The case cited herein, Mt. Clemens Pottery, focuses on the fundamental policy of the FLSA, which is to remedy “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” These detriments, according to Congress, burdened commerce and were at the root of labor disputes.

Evolution of Worker Protection and Employee Rights

Old as it is, the two-step solution of Mt. Clemens Pottery still stands. But it strikes a different tone than more recent employer friendly Fifth Circuit decisions. Whether this suggests a subtle shift in Fifth Circuit focus remains to be seen. The Fifth Circuit explicitly did not rule on the second question of whether the installers were employees. It left that question for the District Court on remand. Nonetheless, it is important to explore because the two questions are so intricately linked in many overtime compensation lawsuits.

Worker Classification – Employee vs. Contractor

Only covered employees are entitled to the wage and hour law protections of the FLSA. Self-employed workers are protected only by the terms of their contracts. Nonetheless, the issue of whether a worker falls within one category or the other often extends far beyond the existence or non-existence of a valid contract. The decisions also tend to be highly fact specific. If the installers mentioned earlier can meet their burden of proof about hours worked, they will have the chance to present evidence on this employee vs. contractor issue.

New Definition of Independent Contractor

On January 9, 2024, the U.S. Department of Labor published a final rule that refines the definition of independent contractor under the FLSA. Following are the six issues that the DOL considers:

  • whether the worker has an opportunity for profit or loss;
  • the investments by the worker and potential employer;
  • the degree of permanence of the relationship;
  • the nature and degree of the potential employer’s control over the work;
  • the extent to which the work is integral to the potential employer’s business; and
  • the worker’s skill or initiative.

Reach out to Kilgore & Kilgore for Legal Assistance on Employee Rights

Our Texas employment lawyers have decades of experience with wage and hour law, overtime compensation, employee rights, wage disputes, and other employment rights claims. Use this link to get started Visit Kilgore & Kilgore.

Protecting Employee Rights in Whistleblower Cases and Corporate Ethics Violation

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On February 8, 2024, the Supreme Court ruled for protecting employee rights in whistleblower cases where lawfully protected actions are contributing factors to adverse employment actions. In the case of Murray v. UBS Securities, LLC, the Supreme Court held that a whistleblower who was fired after reporting he was pressured to slant his reports to UBS customers could seek whistleblower protection under the Sarbanes-Oxley Act, even if he could not show that UBS specifically intended to retaliate against him. The Murray case is a huge victory for whistleblowers who may now seek protection under the law, even if they can show only that their lawfully protected actions were a contributing factor to an adverse employment action.

Murray also affirms the rationale of the 2014 Fifth Circuit decision in a case known as Halliburton v. Administrative Review Board. Although it is tempting to understand Murray solely in the context of a securities law violation, it may have implications for the burden of proof faced by whistleblowers in a wide range of other federal and state whistleblower protection laws that affect industries as diverse as nuclear energy, railways, and aviation.

Corporate Fraud Reporting: Whistleblower Fired after Reporting Unethical and Illegal Pressure

Under SEC regulations, Trevor Murray, a research strategist at UBS, was required to certify that his reports to customers about the firm’s securities business were independent and reflected his own views. He alleges that two UBS trading desk employees pressured him to modify his reports to reflect more favorably on the employer. That is when the UBS unethical pressure started. After he told his supervisor about the attempted improper influence, UBS fired him. UBS insists that his termination was not retaliatory, but rather, that it laid him off as part of an economically driven reduction in force.

At trial, UBS argued it was entitled to summary judgment because Murray failed to produce any evidence that his supervisor possessed any sort of retaliatory animus toward him. The district court denied UBS’s motion and instructed the jury that Murray was required only to prove that his protected activity was a contributing factor in the termination of his employment. The jury found for Murray and awarded him over $900,000 in damages and over $1.7 million in attorney fees. UBS appealed to the Second Circuit.

The Second Circuit vacated the District Court’s verdict and remanded the case for a new trial, holding that retaliatory intent was an essential element of a Sarbanes-Oxley Act whistleblower retaliation claim. The decision raised troubling questions among some securities industry attorneys.

The first issue was that the Second Circuit appeared to expand the Sarbanes-Oxley Act whistleblower’s burden of proof beyond the plain language of the statute. The second was that it also cut directly against the decisions of several other federal Courts of Appeal including the Fifth Circuit. Those Appeals Courts had consistently held that it was sufficient for Sarbanes-Oxley Act whistleblowers to show that their protected activity was a factor contributing to the employer’s adverse employment action. Trevor Murray sought Supreme Court review.

Sarbanes-Oxley Act Whistleblower Protection

The Sarbanes-Oxley Act of 2002 was enacted in response to financial fraud scandals in the early 2000s. These involved publicly traded companies such as Enron Corporation, Tyco International plc, and WorldCom. The scandals shook investor confidence in the trustworthiness of corporate financial statements and led many to demand an overhaul of financial regulatory standards. Whistleblowing workers are an essential part of Sarbanes-Oxley and many other statutory efforts to prevent, catch, and punish fraud. Employees are the eyes and ears on the ground and are most likely to be aware of wrongdoing.

The hitch is that they are also very vulnerable to employment retaliation. The retaliation can take many different forms – from employment termination to the workplace ostracism at issue in Halliburton, to the defamatory reporting of negative information on the FINRA Form U-5. The last, which we have encountered in our own practice at Kilgore & Kilgore, can wreck the career of an investment advisor or analyst. The fraud laws don’t work if whistleblowers can’t speak.

Legal Advice for Sarbanes-Oxley Whistleblower Retaliatory Termination Claims

In general, plaintiffs pursuing a Sarbanes-Oxley retaliation claim must prove four things:

  • Their employer is covered by the law, which extends its protections to employees of publicly traded companies and their contractors.
  • The whistleblower has engaged in activity that was protected by the Sarbanes-Oxley Act, which includes opposing or raising concerns about fraud or securities law violations;
  • An adverse employment action ensued. This includes employer actions (like firing) that would dissuade a reasonable person from blowing the whistle; and
  • The protected activity caused the adverse action.

Number four – causation — can be a bear. That is where the Supreme Court focused in Murray. The Court held that a trial court may infer causation from a sequence of activities. Whistleblowers need not prove a specific statement of retaliatory intent, which few employers would be so incautious as to make.

Well-intentioned employees acting in good faith to comply with the law should not be left wide open to retribution. Whistleblower lawsuits cannot serve their deterrent purpose if the whistleblower’s claim is too difficult to prove.

How to Report Securities Fraud as an Employee

This is a sensitive and uncomfortable situation, and the first step you take should be to consult an experienced employment law attorney about protecting yourself. It can cost you your job or your license to practice a profession if you report it. On the other hand, if you have played an unwitting part in the activity, you may be subject to legal penalties. Several different laws protect whistleblowers and other employees who have experienced retaliation, such as wrongful termination. Contact Kilgore Law for a confidential discussion. For more information about our whistleblower protection legal practice, click this Whistleblower Attorney. To learn about Kilgore Law’s retaliation law practice, click this Employment Retaliation. Whatever you decide to do, reach out to a lawyer before you file a complaint.

Our Employment Law Firm Can Guide You Through Your Claim, for Whistleblower Protection and Employer Retaliation Claims

Contact us with your whistleblower and employer retaliation questions. Competent legal representation is necessary in these complicated situations. We may be able to help you. To get the conversation started, click here Contact Kilgore Law.

Ignored Employee Harassment Claims Became a Sexual Harassment Lawsuit That Lost, Then Won on Appeal

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The decision of the Fifth Circuit in Wallace v. Performance Contractors has been hailed as one of the most significant Fifth Circuit employment law cases of 2023. It maps a path for more protection in the future from workplace harassment. In January 2023, the Fifth Circuit reversed the district court’s grant of summary judgment to the employer on the plaintiff’s Title VII claims of sex discrimination, sexual harassment, and retaliation. In general, the decision departs from the Fifth Circuit’s employer-friendly approach to workplace sexual discrimination lawsuits under Title VII of the Civil Rights Act of 1964.

Fighting Sex Discrimination at Work

More importantly, this decision provides a roadmap for those who want to challenge existing precedent in workplace discrimination lawsuits. The appeals court’s meticulous analysis bears fruit in a similar case, Hamilton v. Dallas County, learn more click here Unlawful Employment. Wallace opened the door for Hamilton to change the law in ways that expand legal precedent and workplace rights throughout Texas, the Fifth Circuit, and beyond. This analysis of the Wallace decision may help future cases of workplace harassment and retaliation.

Workplace Equality and Sexual Discrimination

Magan Wallace was hired by Performance Contractors, a construction company, in December 2016. She was laid off as part of a reduction-in-force in April 2017 but was rehired shortly thereafter. Her initial job classification was as a helper, but she was rehired as a laborer. The two job categories pay the same wage, but helpers are permitted to work while on scaffolding. The helper classification is seen to offer better opportunities for promotion and training. Prior to her April 2017 layoff, Wallace had worked for Performance Contractors while on scaffolding.

Sexual Discrimination Examples

When Wallace was rehired, she asked to continue working on scaffolding. However, a supervisor told her that she had “t*** and an a**” and could not work on scaffolding because Performance Contractors had no safety harnesses that fit women. Her supervisor also stated (in Wallace’s vicinity) that he needed “a bucket of b*** jobs.” Another supervisor texted Wallace a picture of his genitals and asked her to send back a picture of her breasts. On several other occasions, Wallace alleges that the same man asked to “grab and squeeze” her breasts. Another massaged her shoulders without her consent. Yet another supervisor commented that she was in her “sexual prime.” She complained to HR, but never received a call back. When she took a sick day to attend a medical appointment where she sought treatment for anxiety and depression, she was first suspended, and then fired.

Wallace brought a Title VII lawsuit in the Western District of Louisiana alleging sex discrimination, sexual harassment, and retaliation. The District Court granted summary judgment to Performance Contractors. The Fifth Circuit reversed, holding that her allegations were sufficient to merit a full trial on all three issues.

Title VII Sexual Discrimination

Title VII provides that “it shall be an unlawful employment practice for an employer to limit, segregate, or classify his [or her] employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his [or her] status as an employee because of such individual’s race, color, religion, sex, or national origin.” Wallace’s claim focuses particularly on the issue of sex discrimination.

An employer may not take an adverse employment action against an employee because of his or her sex. In the Fifth Circuit at the time of Wallace’s claim, the term adverse employment action was understood to mean an ultimate employment decision affecting hiring, firing, demoting, promoting, granting leave, or paying. The District Court found that preventing Wallace from working at elevation was not an ultimate employment decision and thus was not an adverse employment action that would support a Title VII sex discrimination claim.

In Wallace, the Fifth Circuit finessed the ultimate employment decision issue. Instead, it found that Wallace’s re-classification as a laborer, even without a reduction in pay, was a demotion. Under existing precedent, a demotion could support a claim for sex discrimination. The court decided, as a result, that Wallace’s complaint was sufficient to withstand a motion for summary judgment.

Sexual Harassment

The District Court acknowledged that Wallace faced severe or pervasive harassment. But it concluded that she could not establish a nexus between that harassment and her termination, which was a tangible employment action. It also accepted the employer’s defenses that:

  • The company had exercised reasonable care to prevent and promptly correct any sexual harassment; and
  • Wallace unreasonably failed to take advantage of the appropriate HR procedures for dealing with the harassment.

The Fifth Circuit analyzed the harassment Wallace suffered in two alternate ways, mirroring the two ways in which sexual harassment is seen to occur at work. The first, quid pro quo (this for that) harassment, usually requires submission to sexual contact as a condition for favorable treatment. The second, hostile work environment harassment, exists when a workplace is “permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive enough to alter the conditions of the victim’s employment and create an abusive work environment.”

Regarding quid pro quo harassment, the Fifth Circuit found that a reasonable jury could find that Wallace was suspended and later fired because she rejected harassment from her supervisors. Similarly, with respect to hostile work environment harassment, the court found that a reasonable jury could conclude that the workplace environment was objectively hostile and there was a material fact issue about whether the employer effectively implemented its anti-harassment policy. An issue of material fact must be decided at trial and cannot be dismissed at the summary judgment phase.

Retaliation

Title VII also forbids retaliation as a form of sex-based discrimination. To establish a retaliation claim, the employee must show that:

  • He or she participated in an activity protected by Title VII;
  • The employer took an adverse employment action against the employee; and
  • A causal connection existed between the protected activity and the adverse employment action.

The District Court had characterized Wallace’s complaints about harassment as general gripes. The Fifth Circuit, on the other hand, held that by complaining to her supervisors about not being afforded opportunities based on her sex, Wallace engaged in protected activity. This, alone, was sufficient to survive a motion for summary judgment.

Why the Wallace Decision is Significant to Sexual Discrimination and Harassment Lawsuits

As with many decisions, the real measure of importance may be in the decisions that follow. On August 18, 2023, the Fifth Circuit set new legal precedent by holding that workers who have been victims of discrimination at work can file a Title VII lawsuit, even if the employer’s action did not affect hiring, firing, pay or leave. In the Hamilton case, the court’s decision tackles the issue that was sidestepped in the Wallace case. That is, whether a change in duties, even without a change in pay, may be an ultimate employment decision that amounts to an adverse employment action.

Title VII Employment Law

The painstaking analysis of the Wallace case may set out a path for additional decisions in the areas of sexual harassment and retaliation. Time will tell. The bottom line is that employees in Texas and throughout the Fifth Circuit may now be able to succeed with a wider variety of gender bias lawsuits under Title VII.

Kilgore & Kilgore Employment Lawyers Understand Title VII and Fight for Workplace Equality

Fighting sex discrimination and harassment at work is what we have been doing for decades, as laws have evolved. For more information, click here Sexual Harassment. Experience counts as laws change. Learn how we have evolved, click here Employment Law. Our Texas employment lawyers have experience with workplace discrimination claims under a variety of state and federal laws. Contact us if you have been the victim of discrimination, harassment, retaliation, wrongful termination, or other workplace equality issues. Click here to get the conversation started Kilgore Law. Fill out and submit the form on our website. We will contact you to see if we can help.

Definition of Disability Discrimination in Texas Now Being Refined by Texas Courts

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A recent Fifth Circuit Court decision explicitly acknowledged that the ADAA (Americans with Disabilities Amendments Act of 2008) modifies the definition of disability in the original ADA (Americans with Disabilities Act) to include “[a]n impairment that is episodic or in remission…if it would substantially limit a major life activity when active.” This modification affects employment law in workplace bias suits, leaves the door open for Texas employment lawyers to protect workers, illustrates the legal consequences of ignoring the need for reasonable accommodations, and ensures the protection of disability rights at work.

The ADAA potentially expands employees’ disability rights at work in significant ways. But there is a lot to unpack in how the law is applied in Texas and throughout the Fifth Circuit. In the case of Mueck v. LaGrange Acquisitions, while the Fifth Circuit acknowledged the modification of the definition of disability, it nonetheless dismissed the plaintiff’s disability discrimination lawsuit against his employer. The employee claimed that he was terminated because of his alcohol use disorder, a condition that the ADA recognizes may be a disability. The Fifth Circuit, agreeing with the employer, found that the plaintiff’s employment was terminated because the employee was required to attend court-ordered treatment sessions during working hours, not because he was an alcoholic.

Workplace Disputes? Call a Texas Employment Disability Discrimination Attorney at Kilgore & Kilgore

If you suspect that you have been the victim of workplace bias, disability discrimination, or that your employer is unfairly denying your request for reasonable accommodation, reach out to us. Changes in employment protection laws occur through court decisions quite frequently. Let us help you. We have a long-standing disability discrimination practice. We have helped many workers get the justice they deserve. Click on this link to learn about our workplace discrimination practice. Use this link Contact Kilgore Law to get the conversation started. We offer a free evaluation of your case.

Alcohol Use Disorder in Employment

The plaintiff in this case was a self-described alcoholic. By his own account, while employed, he might have one to two drinks in the evening on workdays. His drinking never prevented him from working. However, when off duty, he drank excessively. When binging, he neglected basic elements of self-care, failing to shower, brush his teeth, clean his house, or keep up with any other chores.

Workplace Attendance Issues

Not surprisingly, the plaintiff’s drinking also led to legal consequences, including several citations for Driving Under the Influence and public intoxication. Finally, in 2019, the plaintiff was cited for a third DWI and was ordered to attend weekly substance abuse classes. Some of these classes conflicted with shifts that he was scheduled to work. He independently arranged for a coworker to cover the days on which he needed to leave early from his day shift, but could not find coverage for the night shifts for which he would arrive at work late.

Workplace Disputes

The plaintiff insisted that he told his supervisor that he was an alcoholic, that he wanted to turn his life around, and asked his employer to accommodate his attendance at substance abuse classes. His supervisors disputed these statements. His employment was terminated, and he was told that the decision was based on the conflict between the substance abuse classes and his shift schedule.

Disability Discrimination in Texas

Mueck sued his employer under the ADA for intentional discrimination, failure to provide reasonable accommodation, and retaliation. The District Court for the Western District of Texas dismissed his lawsuit, finding that he had failed to show that his alcoholism was a disability or that he had requested a reasonable accommodation. Mueck appealed to the Fifth Circuit, which affirmed the District Court’s dismissal, although on different grounds.

Federal Workplace Employment Discrimination Laws and Texas Labor Code Chapter 21

This case is the first Fifth Circuit case that explicitly recognizes the expansion of the definition of disability to include conditions that are episodic or temporary in nature. It has, nonetheless, been part of the plain language of the amended law for 15 years. Under the ADA, workplace discrimination may occur when an employee is terminated, suspended, denied training, or a promotion, or anything else that negatively affects the terms and conditions of employment because the worker has a disability or needs a reasonable accommodation. Since 1990, alcohol use disorder has been considered as a condition that may qualify as a disability covered by the ADA, if it affects a major life activity like the basic tasks of self- care. Commentary on the 2008 expansion of the definition of disability to include conditions that are episodic or temporary suggests that this may sweep in conditions like:

  • post-traumatic stress disorder,
  • schizophrenia,
  • depression,
  • diabetes,
  • asthma,
  • hypertension,
  • cancer that is in remission, or
  • other conditions where an individual might experience flare-ups.

Texas Labor Code Chapter 21 also prohibits employers from discriminating against applicants or employees with disabilities in job applications, procedures, conditions, and privileges of employment. This law is generally thought to track the ADA. Mueck, however, does not cite Chapter 21, so the issue of whether Texas state law recognizes the expanded definition of disability remains unresolved.

The Future of Disability Discrimination in Texas

The primary importance of the Fifth Circuit’s decision in Mueck may be its explicit recognition of the expanded definition of disability. But the case also leaves many unanswered questions, particularly because significant issues of fact were disputed from the outset. At trial, the District Court appears to have incorrectly applied pre-1980 precedent in determining whether Mueck had a disability. Its analysis stopped with the determination that he was not disabled. The Fifth Circuit recognized the correct standard, but determined that Mueck had not been discriminated against because he had, in fact, been discharged for workplace attendance issues.

Ordinarily, the question of whether an employer has discriminated against an employee on account of a disability goes through several steps, as described here:

  • To qualify as a disability, the condition must affect the worker’s ability to perform a major life activity. These may include things like bathing, eating, sleeping, working, and communicating with others. After 2008, the effects of the disabling condition need not be permanent or constant.
  • The worker must also notify the employer that he or she has a disability and ask the employer for an accommodation.
  • The employer must then engage the worker in an interactive process to determine whether a reasonable accommodation is possible. This process may permit an employer to ask for medical records, propose alternative accommodations and determine whether the changes would be effective in allowing the worker to perform the fundamental functions of the job.
  • An employer need not commit to an accommodation that would cause it undue hardship. Undue hardship is understood to mean causing significant difficulty or expense.

Neither decision reaches questions concerning the adequacy of the interactive process, the reasonability of the requested accommodations or what constitutes significant cost or difficulty on the part of the employer. These are typically the issues on which disability discrimination in employment lawsuits turns.

There are also nagging questions about whether alcohol use disorder is subject to a different level of scrutiny than other disabilities. Many find it particularly surprising that the Fifth Circuit did not address whether the temporary schedule accommodations the employee claimed to have requested were reasonable. But for the disputes at trial about whether he had appropriately disclosed his disability or requested schedule changes, this case might have taken a different turn.

Disability Discrimination Attorneys Defend Employment Rights at Work

Our Texas employment lawyers have decades of experience with workplace disputes, including disability discrimination and other Texas employment issues. Use this link to reach out to us Contact Us with your questions and concerns.

Veteran With Iraq War Injuries Awarded $2.5 Million in Re-employment Lawsuit

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On September 29, 2023, a Nueces County Texas jury awarded retired Capt. LeRoy Torres $2.49 million, finding that the Texas Department of Public Safety discriminated against him by refusing to allow him reasonable accommodations when he came back to work with a service-related injury from the Iraq war. The decision was hailed as “a huge win for veterans with service-related disabilities.” This was not an easy victory. Capt. Torres’ battle against employment discrimination took him 11 years and a trip to the U.S. Supreme Court – ten years longer than his honorable service in Iraq. Employment discrimination against veterans remains an unfortunate reality.

Are You Having Problems With Employment Discrimination?

Kilgore lawyers will stand by you and protect your employment rights. We are veterans too. Veterans, reservists, and regular workers now have a broad range of legal employment protections when it comes to employment rights. But some do not know about the employment discrimination features of Texas and federal law. To learn more about our legal representation, click here Servicemember Rights. Click here to learn more about Employment Discrimination. To read an article on the Uniformed Services Employment and Reemployment Rights Act of 1994, click here USERRA. To get the conversation started about your legal rights, click this link Contact Kilgore Law and submit your contact information so we can answer your questions.

Military Deployment – The Cost of Honorable Service

Capt. Leroy Torres enlisted in the U.S. Army Reserve in 1989. In 1998, he was employed by the Texas Department of Public Safety (DPS) as a Texas State Trooper. He worked as a trooper until 2007 when his reserve unit was deployed to Iraq. Torres spent his deployment at Camp Anaconda in Balad, Iraq, where the toxic fumes from ten acres of burn pits filled the air. His barracks were within a mile of the burn pits.

In the burn pits, everything that was no longer needed was doused with jet fuel and burned. This included amputated body parts, arms, and legs left behind. Aircraft engines, computers, and tires were burned there. Torres and those with whom he served had no choice but to breathe the air. Even before Capt. Leroy Torres left Iraq, he began having severe headaches. He was honorably medically discharged in 2008. He came back with a diagnosis of constrictive bronchitis, a respiratory condition that narrowed his airways and made breathing difficult. Once home, Torres began having chest pains and other symptoms.

Re-employment with the Texas Department of Public Service (DPS)

Nonetheless, Capt. Torres sought re-employment with the DPS. It was a job he felt called to do. At trial, he testified that “Servicing [sic] as a trooper wasn’t just a job that I would just go to earn a paycheck. It’s just like the military. Something I lived by.” DPS only made an offer of temporary duty, which he declined. He sued DPS in 2017, alleging that the agency’s failure to offer him a job that would accommodate his progressing disability violated USERRA (Uniformed Services Employment and Re-employment Rights Act of 1994), which offers re-employment and prohibits adverse employment actions against an employee with a military service history. The trial court ruled in his favor, but on appeal, the appellate court reversed that decision, finding that, because the DPS is an agency of the state of Texas, it was immune from civilian lawsuits. That decision sparked the public’s collective conscience. Military service was the code by which Capt. LeRoy Torres lived. It is the code which many veterans live by. It is one of the reasons so many veterans find themselves in law enforcement and other public service jobs.

U.S. Supreme Court Rights the Wrong of Employment Discrimination Against Veterans

Capt. LeRoy Torres sought to have the decision reviewed by the U.S. Supreme Court. In June 2022, the U.S. Supreme Court held that Torres did have standing to sue the DPS. It then remanded this discrimination lawsuit back to Texas state court for a decision consistent with its holding. This was a decision that Kilgore Law covered at length in our September 2022 blog post. That brings us to where we are today and the 2023 decision by the Nueces County jury.

Much has happened in the meantime, on both on the legal and personal front for servicemembers who, like Capt. LeRoy Torres, were exposed to the poisonous fumes from burn pits. Capt. LeRoy Torres has since been diagnosed with terminal lung disease, toxic brain injury, and autoimmune issues. The jury’s award has not come too soon and will certainly be useful for his future as a wounded warrior.

USERRA (Uniformed Services Employment and Re-employment Rights Act of 1994) and Disability Benefits

If a veteran has a disability incurred in or aggravated by his or her service, an employer (now including Texas state agencies) must make reasonable efforts to accommodate the disability and return the veteran to the position in which he or she would have been employed but for the military service. If the wounded warrior is not qualified for that position due to disability, USERRA also requires the employer to make reasonable efforts to help qualify the veteran for a job of equivalent seniority, status, duties, and pay, which he or she is qualified to perform or could become qualified to perform. This could include training or retraining for the position. These were the benefits that Capt. LeRoy Torres sought.

Employment Discrimination Rules in Other Federal and State Laws

Capt. LeRoy Torres sued the DPS specifically under the provisions of USERRA, but there are other federal and state laws that work together to protect the employment rights of wounded warriors. These employment rights are included in the ADA (Americans with Disabilities Act), the PACT Act, and provisions of the Texas Government Code.

Benefits Under the PACT Act1

The lifelong injuries caused by bullets, bombs, and combat are easy to recognize. Invisible war injuries, like a toxic brain injury or constrictive bronchitis, are harder to spot and their effects may not appear for years. The PACT Act expands and adds benefits for veterans, including:

  • Eligibility for VA medical benefits for veterans with toxic exposures and veterans of the Vietnam War, the Gulf War, and post-9/11 eras;
  • A list of more than 20 new presumptive conditions for burn pit and other toxic exposures; and
  • Required Veterans Administration screening for toxic exposure for every veteran enrolled in VA health care.

The ADA (Americans With Disabilities Act)

The federal ADA prohibits employment discrimination against people with disabilities in several areas including employment, transportation, public accommodations, communications, and access to state and local government programs and services. With respect to employment, the law protects the rights of both employees and applicants.

Employment Discrimination Laws in the Texas Government Code

The Texas Government Code provides that members of the Texas National Guard and other state military forces who are called to active state duty by the governor are entitled to the same benefits and protections as USERRA (Uniformed Service Employment and Reemployment Rights Act of 1994).

Employment Discrimination is Illegal

Are you having problems with employment discrimination or re-employment discrimination? Our employment lawyers follow legal developments closely and are experienced with getting the damages to which our clients are entitled. To get the conversation started about your legal rights, click this link Contact Kilgore Law.

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(1) PACT ACT: Promise to Address Comprehensive Toxics Act

New Federal EEOC Workplace Harassment Guidelines and Employer Liability

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In October 2023, the Equal Employment Opportunity Commission (EEOC) published new draft guidelines on workplace harassment. The new document, called Proposed Enforcement Guidance on Harassment in the Workplace, is the first official EEOC guidance since 1999. This 144-page draft is a gold mine for HR Managers. It is an encyclopedia of information about best practices relating to employment laws, discrimination charges, sex discrimination, sexual harassment, race discrimination, employer responsibility, and employer liability.

This proposed new EEOC guidance compiles 24 years of legal precedent. It provides examples of how these principles should be applied to workplaces re-shaped by the #MeToo movement, the COVID-19 pandemic, the overturning of Roe v. Wade, and the U.S. Supreme Court’s Bostock decision. In addition, the draft guidelines contain 13 detailed, footnoted examples (Examples 27-40) of situations in which employers might find themselves legally responsible for the actions of employees, contractors, and others.

Kilgore & Kilgore Employment Guidance

Guarding an employer from legal liability is among an HR manager’s top tasks. Now is the time to become familiar with the proposed guidance and to evaluate existing workplace policies and employment guidelines. It is not too early to seek Kilgore & Kilgore employment guidance from their experienced team of lawyers.

Title VII and EEOC Workplace Harassment Guidelines

Title VII of the Civil Rights Act of 1964 protects job applicants and employees from employment discrimination based on race, color, religion, sex, or national origin. In 1986, the U.S. Supreme Court in Meritor Savings Bank v. Vinson, held that workplace harassment can constitute unlawful discrimination under Title VII.

Although many high-profile cases involve harassment based on sex, race, or national origin, the EEOC also enforces laws prohibiting work-related harassment based on color, religion, disability, genetic information, and age (collectively known as EEO laws). Notwithstanding enforcement efforts, many workers still experience illegal workplace harassment. Texas consistently accounts for roughly ten percent of the total workplace discrimination charges in the U.S.

LGBTQ+ Harassment Addressed in the New Guidelines

The U. S. Supreme Court’s 2020 Bostock decision clarified that prohibited workplace sex discrimination includes bias on the basis of gender identity and sexual orientation.

  • Example 4 in the proposed guidance document makes it clear that refusing to use an employee’s preferred name or pronoun may constitute sexual harassment.
  • The EEOC has also taken the position that employers are prohibited from denying employees equal access to a bathroom, locker, and/or shower that corresponds with their gender identity.
  • The draft guidance states that employers are prohibited from firing, refusing to hire, or taking assignments away from someone because customers or clients prefer to collaborate with an individual who has a different sexual orientation or gender identity.
  • Example 9 in the proposed guidance document explores the use of derogatory epithets based on sexual stereotyping. In that example, Eric, an iron worker, alleged that he was subjected to harassment based on his supervisor’s perception that he was feminine. Such harassment included being called pu__y, princess, and fa___t, often several times a day.
  • The EEOC has also taken the position that religious accommodations for employees with sincerely held religious beliefs do not include allowing that employee to create a hostile work environment for an LGBTQ+ coworker.

Online Harassment in the New EEOC Harassment Guidelines

Most employers are already painfully aware of the alcohol-fueled harassment potential of the holiday party, even if held offsite. The proposed guidance goes further to emphasize that conduct occurring within a virtual work environment or via private social media communications can also amount to actionable harassment.

Following Example 23, the proposed guidance notes that “conduct within a virtual environment can contribute to an actionable hostile work environment. This can include sexist comments made during a video meeting, racist imagery that is visible in an employee’s workspace while the employee participates in a video meeting, or sexual comments made during a video meeting about a bed being near an employee in the video image.”

The EEOC guidance also notes that employers may be liable for online harassment, even if that harassment occurs only over the employee’s private social media accounts. Example 25 relates the story of a black employee exposed to an offensive post on Instagram. In the post, two of the black employee’s co-workers included images of the employee juxtaposed with an image of the fictional ape Cornelius from the movie The Planet of the Apes, along with text explicitly comparing her to Cornelius. This also amounts to legally actionable race discrimination in employment.

Pregnancy-Based Harassment Involving Reproductive Decisions

The draft guidance notes that sex-based harassment includes mistreatment based on an employee’s pregnancy and reproductive choices, including decisions about contraception, abortion and, presumably, the choice to have and care for children. Employed mothers who are breast feeding will no longer need to pump in a cold bathroom stall. 

Consider Example 37: “Malak, a server at a sports bar, is visibly pregnant. Every Sunday, Kevin and Troy spend the afternoon at the bar cheering on their favorite football team, and they usually sit in Malak’s section. They repeatedly ask if they can rub her belly ‘for luck’ before games, and berate her when she refuses, calling her a ‘mean mama.’ They also frequently make beeping sounds and yell, ‘Careful! Wide Load!’ when Malak serves other tables. In addition, they ask if she plans to breastfeed and offer ‘to help with practice sessions.’” A manager, Sven, makes only halfhearted efforts to mitigate the situation. According to this illustration and based on these fictional facts, the employer has failed to take reasonable corrective action to address Kevin and Troy’s pregnancy-based harassment of Malak.

Employer Responsibility, Employer Liability – A Wide Net of Responsibility

The EEOC’s new guidance breaks the complicated issue of legally prohibited harassment into three questions:

  • Was the conduct based on the individual’s legally protected characteristic under the federal EEO laws?
  • Did the harassing conduct result in discrimination with respect to a term, condition, or privilege of employment?
  • Is there a basis for holding the employer liable for the conduct?

Employer Liability and the New EEOC Harassment Guidelines

Not every stupid, boorish, and juvenile employee misbehavior ends in employer liability. If Fred and Frank fight over the real or perceived misappropriation of a romantic partner – that is not a legally protected characteristic. If Felicity says something crude about race to a close non-work friend that had no consequences with respect to the maligned worker’s employment, the incident may not rise to the level of prohibited discrimination. If an employer neither knew nor had reason to know about Felix’s racist/ageist/sexist misbehavior last Thanksgiving, then there may be no basis for holding the employer legally responsible.

On the other hand, Part IV of the proposed EEOC guidance casts a very wide net of liability. If the conduct meets the first two criteria, whether the employer is legally liable will depend on the role of the harasser. Is the harasser:

  • the alter ego or proxy for the employer?
  • a supervisor?
  • a colleague or non-employee?

The legal theories and kinds of proof required in each category are different. For HR purposes, however, it may be enough to recognize that liability is possible in each situation.

Contact Kilgore & Kilgore For Employment Guidance

To learn more about recent changes in sexual harassment cases, click here Forced Arbitration. To read about sexual harassment cases in Texas, click here Texas law. For a general overview of Kilgore Law’s employment practice click this link Protect Your Dignity. Click here to get the conversation started contact Kilgore & Kilgore. Or call us at (214) 949-9099. We are here to help you.