USE OF MEDICINAL MARIJUANA NOT A FACIALLY UNREASONABLE ACCOMMODATION UNDER MASSACHUSETTS EMPLOYMENT DISCRIMINATION LAW

In a case that may be a precursor of things to come across the country as more and more states “legalize” the medicinal use of marijuana, in a July 17, 2017 decision in Barbuto v. Advantage Sales and Marketing, LLC, SJC 12226, 2017 Mass. LEXIS 504 (July 17, 2017) the Massachusetts Supreme Judicial Court determined that a plaintiff medical marijuana user had a cause of action for handicap discrimination under a Massachusetts law that prohibits employment discrimination based on, among other things, handicapped status.

Cristina Barbuto, who suffers from Crohn’s disease, was offered an entry-level position with defendant Advantage Sales and Marketing, LLC (“ASM”) in the late summer of 2014, and accepted the offer. After accepting the offer, she was informed that she was required to take a mandatory drug test. Barbuto then told the ASM employee who would be her supervisor that she would test positive for marijuana use because she was a qualifying medical marijuana patient under Massachusetts law whose physician had provided her with a written certification that allowed her to use marijuana for medicinal purposes because of the symptoms associated with her Crohn’s disease. She added that she did not use marijuana daily and would not consume it before work or at work. The supervisor told her that her medicinal use of marijuana should not be a problem but that he would confirm that with others at ASM, which he did and later telephoned her to relay that information.

On September 5, 2014, she submitted a urine sample and on September 11th she started in the ASM training program and completed her first day of work the next day. That evening, Joanna Villacruz, ASM’s human resources representative, and a co-defendant in the lawsuit, telephoned Barbuto to tell her that because she tested positive for marijuana she was being terminated and also told Barbuto that she did not care if her marijuana use was medicinal because “we follow federal law, not state law.”

Barbuto subsequently filed a charge of discrimination against ASM and Villacruz with the Massachusetts Commission Against Discrimination (“MCAD”). Which she later withdrew so she could file a complaint in Massachusetts Superior Court. That complaint included six claims: (1) handicap discrimination, in violation of  Massachusetts General Law c. 151B, § 4(16); (2) interference with her right to be protected from handicap discrimination, in violation of 151B, § 4(4A); (3) aiding and abetting ASM in committing handicap discrimination, in violation of 151B, § 4 (5); (4) invasion of privacy, in violation of 214, § 1B; (5) denial of the “right or privilege” to use marijuana lawfully as a registered patient to treat a debilitating medical condition, in violation of the Medical Marijuana Act; and (6) violation of public policy by terminating her for lawfully using marijuana for medicinal purposes. The second and third claims were brought against Villacruz alone and the rest were brought against both ASM and Villacruz. The defendants tried unsuccessfully to remove the case to federal court and then filed a motion to dismiss the complaint in the superior court, which was granted except as to the invasion of privacy claim. At Barbuto’s request, the judge entered a separate and final judgment on the dismissed claims and Barbuto filed a notice of appeal regarding the dismissed claims and the Supreme Judicial Court granted Barbuto’s application for direct appellate review.

Since the claims had not survived the motion to dismiss stage in the trial court, the Supreme Judicial Court’s review was limited to determining whether, taking the claims in the light most favorable to Barbuto, she had adequately stated a claim for relief. The court began its review by noting that, like many other states, Massachusetts had allowed limited possession of marijuana for medical treatment, while acknowledging that possession of marijuana remains illegal under federal law. It then noted that under G.L. c. 151B, § 4(16) it is an “unlawful practice … [f]or any employer … to dismiss from employment or refuse to hire …, because of [her] handicap, any person alleging to be a qualified handicapped person, capable of performing the essential functions of the position involved with reasonable accommodation, unless the employer can demonstrate that the accommodation required to be made to the physical or mental limitations of the person would impose an undue hardship to the employer’s business.” Barbuto alleged that she was a “handicapped person” because she suffered from Crohn’s disease and that she was a “qualified handicapped person” because she could perform the essential functions of her job with a reasonable accommodation to her handicap, that is, with a waiver of ASM’s policy barring anyone from employment who tests positive for marijuana use and the court agreed.

Since the court agreed she was handicapped, to state a claim for handicap discrimination, Barbuto had to show that the accommodation she claimed was necessary was “facially reasonable.” The defendants argued that it was not facially reasonable for two reasons: 1) she was not a “qualified handicapped person” because the only accommodation she sought, continued use of medical marijuana, is a federal crime; and 2) even if she was a qualified handicapped person, she was terminated because she failed a drug test that all employees are required to pass, not because she was handicapped.

As to the first argument, that is, that the requested accommodation was facially unreasonable because marijuana possession is a federal crime, the court stated that if an employee has a debilitating ailment that can be alleviated with medication and the employer had a drug policy that prohibited her taking that medication, the employer would have a duty to engage in an interactive process to determine if there were an equally effective medical alternative that would not violate the policy and if no such equally effective alternative exists, the employer would bear the burden of proving that the employee’s use of the medication would cause an undue hardship to its business in order to justify the refusal to make an exception to the drug policy as an accommodation. It also noted that under Massachusetts law the possession of medical marijuana is legal and if in the opinion of an employee’s physician it is the most effective treatment, an exception to the employer’s drug policy is a facially reasonable accommodation and further stated that the only person at risk of federal prosecution for possession would be the employee not the employer. Finally, it noted that even if the accommodation of the use of medical marijuana was facially unreasonable, ASM owed Barbuto the duty under applicable law to participate in the interactive process before it terminated her and its failure to do so alone would be sufficient to support a claim of handicap discrimination.

As to the defendants’ second argument, that she was fired for failing the drug test, not for being handicapped, the court summarily dealt with that argument by noting “where, as here, the company’s policy prohibiting any use of marijuana is applied against a handicapped employee who is being treated with marijuana by a licensed physician for her medical condition, the termination of the employee for violating that policy effectively denies a handicapped employee the opportunity of a reasonable accommodation, and therefore is appropriately recognized as handicap discrimination.”

Because it determined that Barbuto’s use of medical marijuana under the circumstances of the case was not facially unreasonable, it reversed the trial court’s dismissal of the claims. It should be noted though, that the Supreme Judicial Court did point out that just because the claims survived a motion to dismiss, it did not mean that defendants could not later prove that the accommodation was not reasonable because it would impose an undue burden on its business. However, it is clear that this is an issue that courts will have to grapple with in the states that have determined that medical marijuana use is permitted and it seems at least arguable that in Massachusetts, the use of medical marijuana away from work, may become a reasonable accommodation under certain circumstances.

TEMPORARY WORKER NOT ENTITLED TO LEAVE AS A REASONABLE ACCOMMODATION

The Tenth Circuit recently addressed whether an employer had failed to make a reasonable accommodation under the Americans with Disabilities Act, 42 U.S.C. § 2000e et seq., (“ADA”) regarding a temporary worker’s request for time off as a reasonable accommodation and although it affirmed the Colorado District Court’s grant of summary judgment in favor of the defendants, it held that the McDonnell Douglas burden-shifting framework was not applicable in a failure-to-accommodate case in the 10th Circuit because such cases do not require the plaintiff to demonstrate discriminatory intent by the employer.

In Punt v. Kelly Services, No. 16-1026, 2017, U.S. App. LEXIS 12046 (10th Cir. July 6, 2017), Kristin Punt, a temporary employee employed by Kelly Services and assigned to GE Controls Solutions, made claims under the ADA, among other statutes, after she was taken off the assignment after missing numerous shifts, allegedly because of a cancer diagnosis.

Punt was an at-will employee of Kelly and at the beginning of her employment there, she signed an employment application stating that the duration of any assignment she accepted depended on the needs of Kelly’s customer and that it could be cancelled at any time by Kelly or the customer. The application also stated that, upon completion of each assignment, she would notify Kelly of her availability for work. GE entered into an agreement with Kelly Services, under which Kelly provided and assigned temporary employees to GE as needed. Under the agreement, GE could ask Kelly to remove any of its temporary employees from their assignment at GE for any reason and Kelly also had the right to cancel any employee’s assignment on its own initiative.

Kelly assigned Paul to the receptionist position at GE, and she worked there from October 24, 2011 through December 5, 2011. When she began the receptionist assignment at GE, she was told she was to work a 40-hour work week, starting at 7:30 a.m. and ending at 4:30 p.m. each day. According to GE, the essential functions of the receptionist job included being “physically present at the lobby/reception desk during business hours” in order to “greet . . . and direct all visitors, including vendors, clients, job candidates, customers, etc.” Despite the 40-hour requirement, however, in the six weeks that she worked as a receptionist at GE, she never worked a full 40-hour work week. She was absent from work on six occasions, was late to work on three occasions and also left work early on three occasions. When Punt was not at work, another Kelly temporary employee, who was assigned to work as an administrative assistant for the general manager of GE, had to take over the receptionist duties as well as her own responsibilities. Punt blamed these absences on a recent breast cancer diagnosis.

On December 5th, Punt had an MRI appointment and that morning, she emailed Erin Wilgus—the Kelly employee who was the point-person for Punt’s temporary assignment to GE—and informed her that she, her husband and doctor had determined that it was in her best interest not to come to work that week at all and also expressed concerned that GE was not willing to work with her, that her medical issues, including a potential surgery, would require her to take time off and that because she felt that GE did not want her to take time off, the assignment might not be a good fit. After that, several emails were exchanged between Punt and Wilgus because Wilgus was trying to determine whether Punt was going to go to GE the next day. Ultimately, on that same date, GE’s general manager and HR director contacted Wilgus to end Punt’s assignment, telling Wilgus that Punt was not showing up for work and that GE “needed an employee that’s going to be able to show up and fulfill the needs of the position.” Wilgus then contacted Punt to inform her that her temporary assignment with GE had been terminated. After that, Punt never contacted Kelly to ask for another assignment and Kelly did not contact Punt with any additional job offers. In 2014, Punt filed a lawsuit against both GE and Kelly, raising both a somewhat ill-defined claim of disability discrimination under the ADA, which Punt claimed was a failure-to-accommodate claim, and a claim of genetic information discrimination under the Genetic Information Nondiscrimination Act, 42 U.S.C. § 2000ff et seq., (“GINA”) because she had allegedly told a GE employee that she had a family history of breast cancer. The district court granted summary judgment in favor of defendants on both claims.

The district court evaluated the ADA disability claim as a disparate treatment claim, subject to the McDonnell Douglas burden-shifting analysis, because it determined Punt had not presented direct evidence of a discriminatory motivation on the part of the defendants. Using the McDonnell Douglas analysis, the court held that Punt had failed either to establish a prima facie case of disability discrimination or to show that defendants’ legitimate, nondiscriminatory reason for her termination was pretextual.

The appeals court began its review by noting that the district court incorrectly concluded that what matters for determining the type of claim at issue in an ADA case is not the type of claim that is pleaded in a complaint, but rather the type of evidence that is presented to support the claim. The appeals court stated that this conclusion was based on a fundamental misunderstanding about the distinctions between different types of ADA claims and the evidence that must be presented to support them. The court stated that while in general, under the ADA there must be a nexus between the disability and the adverse employment action, usually proven by direct or indirect evidence of discriminatory intent, a failure-to-accommodate claim, does not require such a showing because any failure to provide reasonable accommodations for a disability is necessarily “because of a disability” and no proof of a “‘particularized discriminatory animus’ is required.” In other words, the court determined that the only reason an accommodation is required is because of a disability, and thus the failure to provide a reasonable accommodation to a qualified employee with a disability is inherently based on that disability. It then opined that failure-to-accommodate cases should not be classified either as direct-evidence cases or as McDonnell Douglas circumstantial evidence cases, but rather as a separate category of cases that require no evidence of discriminatory intent in any form.

As to Punt’s actual claim, the court stated that while Punt’s complaint was “far from a model of clarity on this point,” the ADA claim looked much more like a failure-to-accommodate claim than a disparate-treatment claim and that the record revealed that Punt and counsel for both GE and Kelly focused extensively in discovery on questions of whether Punt’s request for time off was a request for a reasonable accommodation, and no one ever attempted to elicit any evidence to support or defeat a disparate-treatment theory. Because it was a failure-to-accommodate claim, the court held that it should have been evaluated under the 10th Circuit’s failure to accommodate test, which requires the plaintiff to show that “(1) she is disabled; (2) she is ‘otherwise qualified’; and (3) she requested a plausibly reasonable accommodation,” which then requires the employer to show evidence that either (1) conclusively rebuts one or more elements of plaintiff’s prima facie case or (2) establishing an affirmative defense, such as undue hardship or one of the other affirmative defenses available to the employer.”

The court “began and ended” its analysis by examining whether or not Punt had “requested a plausibly reasonable accommodation,” stating that determination of whether a requested accommodation is reasonable “must be made on the facts of each case taking into consideration the particular individual’s disability and employment position.” It concluded that Punt’s request was not plausibly reasonable on its face because “an employee’s request to be relieved from an essential function of her position is not, as a matter of law, a reasonable or even plausible accommodation” and therefore, affirmed the district court’s decision. It also affirmed the district court’s decision on the GINA claim because it determined that Punt had offered no evidence to support the claim beyond conclusory allegations.

POSTING JOB OPPORTUNITY ON LINKEDIN PROFILE FOR NEW EMPLOYER DID NOT VIOLATE NON-COMPETE

A fact of life in modern business is an employee’s use of social media, or, in some cases, a former employee’s use of social media, and how it fits in with any post-employment restrictions to which they may be subject. In Bankers Life and Casualty Co. v. American Senior Benefits LLC, 2017 IL App (1st) 160687- U (June 26, 2017), the Illinois Court of Appeals affirmed a lower court’s ruling that a former employee’s email communications sent to his ex-colleagues asking to connect on LinkedIn and whose LinkedIn profile contained a job posting from his new employer, was not a violation of his non-competition agreement.

Gregory Gelineau was hired by Bankers Life in 2004 as a branch sales manager in Warwick, Rhode Island and in 2006, he signed an employment agreement containing certain non-competition provisions that stated:

“During the term of this Contract and for 24 months thereafter, within the territory regularly serviced by the Manager’s branch sales office, the Manager shall not, personally or through the efforts of others, induce or attempt to induce:

(a) any agent, branch sales manager, field vice president, employee, consultant, or other similar representative of the Company to curtail, resign, or sever a relationship with the company;

(b) any agent, branch sales manager, field vice president or employee of the Company to contract with or sell insurance business with any company not affiliated with the company, or

(c) any policyholder of the company to relinquish, surrender, replace, or lapse any policy issued by the company.”

Gelineau’s employment with Bankers Life ended on January 15, 2015 and he went to work as a senior vice president at American Senior Benefits (“ASB”), which Bankers Life regarded a direct competitor and which, according to Bankers Life, had hired and retained many former Bankers Life employees. In August 2015 Bankers Life filed a complaint against Gelineau, among others, which included a breach of contract claim in which it alleged that after joining ASB, Gelineau recruited or attempted to recruit Bankers Life employees and agents from the Warwick branch by sending LinkedIn requests to connect to three Bankers Life employees. It alleged that the employees would then click onto Gelineau’s profile and see a job posting for ASB. Bankers Life also alleged that Gelineau directed his ASB subordinates to contact Bankers Life employees and agents to seduce them to leave Bankers Life and join ASB.

Gelineau moved for summary judgment, stating that he did not recruit any Bankers Life employees or agents in his area, did not direct subordinates to do so and did not use LinkedIn to send direct messages to Bankers Life employees or agents in the Warwick area for the purpose of hiring or offering them opportunities at ASB. Instead, he stated that all the people on his email contact list were sent LinkedIn generic emails asking them to connect. In response, Bankers Life offered two affidavits. One was from an employee who stated he had received invitations to connect on LinkedIn from Gelineau and one of his ASB subordinates and that he saw the job posting. The other was from a Bankers Life officer stating that Bankers Life needed more discovery to respond to the motion. Replying, Gelineau submitted an affidavit from that same subordinate, which stated that Gelineau had asked him not to recruit Bankers Life agents or employees in the Warwick area. The trial court granted summary judgment to Gelineau, stating that Bankers Life failed to identify any solicitation or other breach of contract by Gelineau, a ruling which Bankers Life appealed.

On appeal, Bankers Life argued that a material issue of fact existed regarding whether or not Gelineau induced or attempted to induce Bankers Life employees and agents to leave Bankers Life in violation of the non-competition provisions when he “affirmatively sent the LinkedIn invitation to the three employees, that the invitations directed its [sic] recipients to a job posting, and that it was Gelineau’s modus operandi to first utilize LinkedIn as a first step in recruiting Bankers Life employees.” The appeals court noted that the question before it was whether the emails sent through Gelineau’s LinkedIn account to the three employees and his other LinkedIn activity sought to induce or attempted to induce the employees in the Warwick office “to curtail, resign, or sever a relationship with Bankers Life,” in violation of his agreement.

To answer that question, the court looked at several cases from other jurisdictions that had weighed similar issues. It noted that in BTS, USA, Inc. v. Executive Perspectives, LLC, 2014 WL 6804545 (Conn. Super. Oct. 16, 2014), the defendant webpage designer updated his LinkedIn account when he left his former company and also made a LinkedIn posting that encouraged his contacts to “checkout” a website he had designed for his new company, BTS. The former employer claimed this violated his non-compete agreement but the court disagreed, noting that there was no evidence that any BTS customer actually viewed or visited the former employee’s LinkedIn page or did business with the new employer.

Conversely, it noted that other courts had ruled the opposite way, notably in a Michigan case, Amway Global v. Woodward, 744 F. Supp. 657 (E.D. Mich. 2010) where the defendant employee posted on his LinkedIn page “If you knew what I knew, you would do what I do.” He argued that his LinkedIn postings and other social media postings could not be considered solicitations because they were “passive, untargeted communications.” The court disagreed, and stated “it is the substance of the message conveyed, and not the medium through which it is transmitted that determines whether a communication is a solicitation” and held that this defendant’s message would easily be characterized as a solicitation.

Based on these cases, the court determined that Gelineau’s invitations to connect on LinkedIn were generic emails that did not contain any discussion of Bankers Life and did not mention ASB. It further determined that the Bankers Life employees had the option to connect or not and once connected their decision to click on Gelineau’s profile or to access a job posting on his LinkedIn page were not something for which Gelineau could be held responsible and that posting a job opening on his LinkedIn profile did not constitute an inducement of solicitation in violation of his non-competition agreement. In fact, it said “[t]o violate his contract, Gelineau would have to, directly recruit individuals working in the Warwick, Rhode Island area” and it found no such conduct.

While it appears that Bankers Life was facing an uphill battle in this case because the court essentially determined that Bankers Life had no evidence that Gelineau’s activity on LinkedIn was solicitation as defined in the non-compete agreement, it illustrates why employers should be careful in defining “solicitation” in their agreements and consider doing it in such a way that it encompasses at least the types of thinly-veiled solicitations on social media seen in Amway Global.

NO EVIDENCE OF AGE BIAS WHEN JOB WAS ELIMINATED AS PART OF REDUCTION IN FORCE

The Fifth Circuit, in Lay v. Singing River Health System, No. 16-60431, 2017 U.S. App. LEXIS 10758 (5th Cir. June 19, 2017), recently upheld the district court’s grant of summary judgment in favor of the defendant employer in an age-discrimination case because it agreed with the lower court that the plaintiff had failed to raise a material issue of fact that her termination, which was part of a reduction in force, was pretextual. This case is particularly instructive to companies facing a reduction in force when employees being considered for reduction are members of a protected class.

Virginia Lay began working as director of managed care at Singing River in 1999, a position in which she reported directly to the chief financial officer. In 2013, the managed care department was moved to the clinical-integration department and Lay began reporting to Chris Morgan, then age 50, the vice-president of clinical integration. In early 2014, the company discovered through an audit that it faced an $88 million shortfall caused by overstatements of its accounts receivables. This caused the company to renegotiate all its managed care contracts and reevaluate and restructure all its operations. Part of that restructuring included combining Morgan’s and Lay’s jobs into one position. Morgan decided to leave the company and Lay stated that she did not apply for the new position because it required a master’s degree, which she did not have. However, Lay was encouraged to retire but was permitted to stay on through June 2014 to maximize her retirement benefits. While there appears to have been some dispute about how the retirement option was presented to her and when she was told her position was going to be eliminated, it was undisputed that she retired from Singing River and eventually took a full-time job paying $3,000 per month, significantly less than the $160,000 salary she was making at Singing River.

Meanwhile, back at Singing River, a new CFO initially oversaw some of Lay’s former duties along with his own job responsibilities but in early 2015, Singing River hired Jason Rickley, then 32, to take over the newly-developed, combined position that replaced Morgan’s and Law’s positions. He was initially paid $110,000 and was enrolled in a master’s degree program in health administration at the time he was hired.

In April 2015, Lay filed an age discrimination suit under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 632(a)(1), in the Southern District of Mississippi and the court eventually granted Singing River’s motion for summary judgment because it determined that Lay had not raised any genuine issues of material fact to rebut Singing River’s proffered legitimate, non-discriminatory reason for eliminating Lay’s position. Lay then appealed to the Fifth Circuit.

The appeals court began its analysis by stating that under the ADEA, Lay was required to demonstrate that but for the discriminatory act, she would not have been terminated and noted that its review required it to employ the “more than well-known burden-shifting analysis,” wherein the plaintiff must first state a prima facie case of discrimination, which then shifts the burden to the defendant to proffer a reasonable-non-discriminatory reason for the termination. Under the test, if such a reason is proffered, the burden then shifts back to the plaintiff who must then meet her ultimate burden of persuasion on the issue of intentional discrimination. As to Lay’s specific case, the court also noted that if a plaintiff is terminated during a reduction-in-force, as here, the elements of the prima facie case are “(1) that [s]he is within the protected age group; (2) that [s]he has been adversely affected by the employer’s decision; (3) that [s]he was qualified to assume another position at the time of the discharge; and (4) evidence, circumstantial or direct, from which a factfinder might reasonably conclude that the employer intended to discriminate in reaching the decision at issue.”

Both the district court and the appeals court presumed that Lay had met her initial burden. As such, the appeals court began its analysis by examining Singing River’s proffered reason for eliminating Lay’s position. The court noted that the record evidenced the multi-million dollar shortfall and then stated that it was not the court’s place to question how an entity handled a financial crisis and that the law does not require that a company’s decisions be proper, only that they are non-discriminatory. It then stated that because Lay’s job was not the only one eliminated and because the elimination was part of a restructuring in response to the financial hardship, Singing River had presented a legitimate, non-discriminatory reason for the negative employment action.

In response to Singing River’s proffer, Lay offered nothing more than conclusory statements and hearsay. She first claimed that she was replaced by someone “half her age” and that the new position “entailed 99.9% of her former job duties under a different title” but later admitted that she estimated that total from reading the job profile online and that she did not know the full responsibilities required for the new position. Further, the court noted that the person that filled the newly-created position was not, in fact, half her age. The court stated that because a reasonable fact-finder would not be “persuaded by pure conjecture,” she had not raised a genuine, material fact.

She also claimed that she was “forced” to retire based on her age and pension status but the appeals court quickly disposed of this argument by stating that the record evidenced that the discussion regarding her retirement took place after she had been told that her position was going to be eliminated and that at most, the discussion was made in “a helpful spirit.” As such, the court determined that she had not demonstrated that she had been “forced” to retire and therefore had not raised a genuine fact for trial on that claim.

Finally, the court determined that other claims made by Lay regarding alleged age-derogatory statements allegedly made by members of Singing River’s management were inadmissible hearsay that could not create a genuine issue of material fact. Based on its analysis then, the appeals court affirmed the district court’s grant of summary judgment to Singing River.

FOURTH CIRCUIT HOLDS NO TITLE VII RETALIATION CLAIM WHEN EMPLOYER FIRES AN EMPLOYEE ON MISTAKEN BELIEF THE EMPLOYEE LIED ABOUT POTENTIAL TITLE VII CLAIM

Employers investigating Title VII discrimination claims should take some comfort, based on a recent Fourth Circuit case, that if they terminate an employee for making a false claim after a good-faith investigation, they will likely not be held liable for a Title VII retaliation claim if the claim later proves to be valid. In Villa v. Cavamezze Grill, LLC, No. 15-2543, 2017 U.S. App. LEXIS 10112 (4th Cir. June 7, 2017), the Fourth Circuit determined that the plaintiff had no Title VII retaliation claim because her employer reasonably believed she had made a false harassment report when it terminated her, even though that report later proved to be somewhat true. In doing so, the court was required to examine the differences in Title VII’s “participation” and “opposition” clauses and determined under the applicable opposition clause that false reports are not protected so her termination could not, as a matter of law, have been caused by her “opposing” prohibited conduct.

Patricia Villa began working for CavaMezze Grill Mosiac, LLC (“Mosaic”) a wholly-owned subsidiary of Cavamezze Grill, LLC (“CMG”), in the spring of 2012 and by October 2013, she was a low-level manager reporting directly to Mosaic’s general manager, Marcelo Butron. In October 2013, she related to Rob Gresham, CMG’s director of operations, that she had been told by one employee, Judy Bonilla, that Bonilla had been offered a raise by Butron in exchange for sex and that she suspected that another, now former employee, Jessica Arias, had left because Butron had made her a similar offer. As part of an investigation into the allegations, Gresham spoke with both the alleged harassment victims, who each denied that any such offers were made. Gresham determined, based on his investigation, that Villa had fabricated the stories and made a false report regarding Butron. Based on the fabricated report, Gresham fired Villa.

Villa later filed a retaliation complaint with the Virginia Office of Human Rights, cross-filed with the EEOC, but the Office of Human Rights never reached the merits of the case and issued Villa a right-to-sue letter. She filed suit in the federal district court of Virginia against several of the CavaMezze related entities (collectively, “Cava”), alleging retaliation under Title VII. Bonilla’s deposition was taken in that case and in it, Bonilla changed her story and stated that she had, in fact, told Villa that Butron had offered her a raise in exchange for sex, even though she also testified that he had not actually ever made such an offer. At the end of discovery, Cava moved for summary judgment, contending that even if it had incorrectly determined that Villa made up her story, her termination did not constitute Title VII retaliation because the true reason for her firing was that Cava believed that she had made a false report.

Villa did not dispute that that was the true reason for her firing but argued that because she acted in good faith when she reported the story to Gresham, her termination constituted illegal retaliation, regardless of what Cava honestly believed. The district court rejected that argument, along with her alternative argument that Cava’s investigation was not thorough enough, because it determined that there was no factual dispute concerning whether Cava’s desire to retaliate against her was the but-for cause of her termination and granted Cava’s summary judgment motion, a ruling which Villa appealed to the Fourth Circuit.

The appeals court began its analysis by noting that Title VII makes it illegal for an employer to discriminate against an employee either because the employee “opposes any practice made an unlawful practice by” Title VII (the “Opposition Clause”) or “because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under” Title VII (the “Participation Clause”). It then noted: “[u]nder either clause, since the statute only prohibits an employer from discriminating ‘because’ the employee has engaged in a certain type of conduct, ‘Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the challenged employment action’” (emphasis in original) and went on to state “[i]f an employer, due to a genuine factual error, never realized that its employee engaged in protected conduct, it stands to reason that the employer did not act out of a desire to retaliate for conduct of which the employer was not aware.” It also noted that when an employer has acted for a reason not prohibited by the statute, the court will not judge the “correctness, fairness, or wisdom of the employer’s decision.”

In applying the facts of this case to the applicable Title VII rule, the court first stated that while the participation clause – not applicable here since Villa did not “participate” as defined in the statute – protects a person who testifies, even falsely, from being fired, the opposition clause does not protect the making of a knowingly false statement because an employee complaining of conduct she knows did not occur is not “opposing” an unlawful employment practice and that firing someone for making such a false statement does not run afoul of the opposition clause. In fact, in opposition clause cases, the court must employ a balancing test, weighing the purpose of the act to protect people engaging in reasonable acts opposing discrimination against Congress’s desire not to tie an employer’s hands “in the objective selection and control of personnel.” In other words, “[e]ngaging in knowing fabrications certainly does not amount to ‘engaging reasonably in activities opposing . . . discrimination’; and precluding employers from taking any action against employees who have engaged in such deceit obviously would create enormous problems for employers who would be forced to retain dishonest or disloyal employees.”

To prove her case, the court said, Villa had to show that she was fired because of Cava’s desire to retaliate against her for engaging in conduct protected by the opposition clause. It determined that when Cava terminated Villa, it did not know that she had engaged in protected conduct because it was under the good-faith belief, based on its investigation, that she had made up the story. As such, its reason for terminating her was not retaliatory. It noted that if Villa was fired for misconduct that did not actually occur, it was unfortunate “but a good-faith factual mistake is not the stuff of which Title VII violations are made.”

As such, the Fourth Circuit affirmed the trial court’s grant of summary judgment in Cava’s favor.

EMPLOYMENT PLAINTIFF IS EQUITABLY ESTOPPED FROM PREVENTING A NON-SIGNATORY FROM ENFORCING AN EMPLOYMENT ARBITRATION AGREEMENT

Businesses often use workers who are actually employees of staffing companies or other, similar entities, and many times those workers have agreed with the employer to address any employment claims in arbitration. This can cause potential complications if those workers file lawsuits against both entities. In a case favoring arbitrating those claims, even if they involve a non-party to the arbitration agreement, California’s Fourth Appellate District court recently reiterated the rights of such non-signatories to enforce those agreements under both equitable estoppel and agency grounds when the right facts are present.

In Garcia v. Pexco, LLC, No. G052872, 2017 Cal. App. LEXIS 443 (May 16, 2017), Narciso Garcia was hired as an hourly employee by Real Time Staffing Services, LLC in 2011 and he was then assigned to work at Pexco, LLC. The employment application Garcia filled out when he was hired by Real Time contained a broadly-worded arbitration agreement in which he agreed to arbitrate virtually every employment claim he could conceivably have against Real Time, including those arising under federal and state employment laws and regulations. Pexco was not a signatory to the agreement.

In 2014, Garcia filed a lawsuit against several defendants, including Real Time and Pexco, for violations of the California Labor Code and unfair business practices regarding the payment of wages. All the complaint’s pertinent allegations and causes of action were made against “All Defendants,” with no distinction between Real Time and Pexco. Those defendants both moved to compel arbitration, which the trial court granted and Garcia appealed.

The appeals court began its analysis by stating that even though there is a strong federal policy favoring arbitration agreements, the general rule remains that one must be a party to such an agreement to be bound by it or to enforce it. However, it noted that courts recognize certain exceptions to the general rule, including equitable estoppel. Under that principle, a non-signatory can invoke an arbitration clause to compel a signatory to arbitrate when the causes of action against the non-signatory are “intimately intertwined with” the underlying contract obligations.  Garcia argued that because his claims were statutory, they did not sound in contract and therefore could not be deemed part of the arbitration agreement. The court disagreed, noting that a claim can “arise out of” a contract without itself being a contractual claim. It stated that all Garcia’s claims were “rooted in his employment relationship with Real Time;” that the arbitration agreement expressly included statutory wage and hour claims; and that the complaint did not distinguish between Real Time and Pexco in any way. It then stated, “Garcia cannot attempt to link Pexco to Real Time to hold it liable for alleged wage and hour claims, while at the same time arguing the arbitration provision applies to Real Time and not to Pexco.” As such, it determined that Garcia was equitably estopped from refusing to arbitrate his claims against Pexco and affirmed the trial court’s ruling.

The court further noted that Pexco could also enforce the arbitration agreement under the agency exception. Under that exception, a non-signatory can enforce an arbitration agreement when a plaintiff alleges that a defendant acted as an agent to a party to the agreement. The court determined that because Garcia had alleged in the complaint that Real Time and Pexco were “joint employers” and alleged identical conduct by both parties without distinction, they were agents of one another in their dealings with Garcia and Pexco could therefore enforce the agreement under the agency exception.

Companies that use workers who are actually employed by another entity, should, in the event of a lawsuit based on employment claims, determine whether those claims are subject to an arbitration agreement and, if so, seek to enforce it as a non-signatory under an exception to the general rule.

SIXTH CIRCUIT ENFORCES NON-COMPETE’S AGREED UPON CHOICE OF LAW FAVORING MICHIGAN’S LESS RESTRICTIVE ENFORCEMENT OF SUCH AGREEMENTS

As attacks on the use of non-competition provisions roll on nationwide, choice-of-law provisions in those agreements will likely come under even closer scrutiny. A recent Sixth Circuit decision however, determined that such a choice-of-law provision was valid, even though the law chosen by the parties was far more favorable to enforcement of such provisions than was the state’s that had the closest relationship with issues in the lawsuit. In Stone Surgical, LLC v. Stryker Corporation, Nos. 16-1434/1654, 2017 U.S. App. LEXIS 9031 (6th Cir. May 24, 2017), the Sixth Circuit affirmed the judgment of the Western District of Michigan upholding the validity of both a non-compete agreement and a choice-of-law provision contained in that agreement, even though the chosen Michigan law favored the enforcement of non-competes while the state with the most significant relationships to the transaction and the parties, Louisiana, has far more restrictive non-compete law.

Christopher Ridgeway was employed as a sales representative for Stryker, a Michigan based corporation, from 2001 to 2013, where he sold medical device products in his Louisiana-based territory. Stryker’s original employment offer was contained in a 16-page letter that included, among other things, an offer letter, a form non-compete agreement used for all employees, which contained a one-year non-compete clause, a non-disclosure clause and a non-solicitation clause. It also had a Michigan choice-of-law clause and a Michigan forum-selection clause. His employment was contingent on his signing and returning the documents, which he did. As will be seen, the choice-of-law provision was more pivotal than it appears at first glance because Michigan law liberally favors enforcing non-competes and Louisiana law severely restricts such enforcement.

In 2013, Ridgeway began considering going to work for Biomet, a Stryker competitor. He claimed that he asked Stryker’s HR director whether a non-compete agreement was in his file and was told several times one was not. He claimed that based on that representation, he began talking to Biomet about employment opportunities. Not surprisingly, Stryker’s version of the story was quite different. It claimed that it never told Ridgway that no non-compete existed and asserted that the conversations with Stryker regarded his inquiry about whether he had signed a new non-compete to receive stock options associated with a 2012 promotion to district sales manager, not his original non-compete. Stryker argued that its HR director told Ridgeway that she saw no new non-compete in his file and then followed up that conversation with an email titled “Stock.” Moreover, Stryker argued that all its employees were required to sign non-competes or they would not be hired so that it was impossible that he would not have signed one.

When Stryker discovered that Ridgeway was considering a move to Biomet, it fired him and in the termination letter reminded him of his obligations outlined in the various agreements, which apparently had no effect on his choosing to go to work with Biomet. Soon thereafter, Stryker sued Ridgeway in the Western District of Michigan claiming breach of contract, breach of fiduciary duties and misappropriation of trade secrets. Ridgeway counterclaimed, alleging fraud under Louisiana law and also moved to dismiss for lack of personal jurisdiction, which the trial court denied based on the forum-selection cause in the non-compete agreement. While that suit was pending, his company, Stone Surgical, filed suit in the Eastern District of Louisiana against Stryker and that action was transferred to the Western District of Michigan and consolidated with the original case. After consolidation, Stryker moved for a preliminary injunction. While that motion was denied, the actions effectively ended the relationship with Biomet and Ridgeway due to Biomet’s fear of liability.

The case was eventually tried to a jury, which returned a verdict in Stryker’s favor on all its claims, awarded it $745,195.00 in damages and denied any relief on Ridgeway’s counterclaims. Ridgeway and Stone Surgical appealed, challenging the forum-selection clause, the court’s exercise of personal jurisdiction over him and the choice-of-law provision.

The appeals court quickly disposed of the challenge to the forum-selection clause and personal jurisdiction issues because it determined that the forum-selection clause was valid under Michigan law and that by signing the agreement containing that clause, Ridgeway consented to personal jurisdiction in a Michigan court.

As to the choice-of-law provision, the court began its analysis by stating that Michigan law looks to the Restatement (Second) of Conflicts of Law, specifically section 187, when resolving choice of law issues. That section states, in pertinent part, that the law chosen by the parties will be applied “unless the application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.” (emphasis added). As such, the court determined that its analysis had to start by determining whether, absent the choice-of-law provision in the Stryker agreement, another state’s law would apply, by taking into consideration the place of contracting, the place where the contract was negotiated, the place of performance, the location of the subject matter of the contract and the domicile, residence, nationality, place of incorporation and place of business of the parties.

Analyzing the specific facts of the case, the court could not determine the place of contracting or the place of negotiation. It stated that the place of performance and location of the subject matter favored Louisiana and that the final prong did not favor either state. As such, it determined that the state with the most significant relationship to the transactions and the parties was Louisiana but it went on to state that the inquiry also required it to determine whether Louisiana had a “materially greater interest than the chosen state in the determination of the particular issue.” (emphasis in original). It noted that Stryker was a Michigan corporation with its headquarters and management centered there, that Michigan had a strong interest in protecting its businesses from unfair competition and that Ridgeway’s breach of the non-compete agreement would cause Stryker economic loss, which Michigan had an interest in preventing. Taking these issues into consideration, the court determined that Louisiana’s interest in protecting its citizen from unfair non-compete clauses was not materially greater than Michigan’s interest in protecting its businesses from unfair competition. As such, it determined that the choice-of-law provision was valid and properly applied by the trial court and let the jury verdict stand.

In light of this ruling, and the continued questioning of the use of non-competition agreements, those employers that have not chosen to include a choice-of-law provision should probably re-examine that decision.

DOCTOR’S GENDER DISCRIMINATION SUIT FAILS BECAUSE SHE COULD NOT PROVE SHE WAS “SIMILARLY SITUATED” TO MALES WHO WERE NOT FIRED

The Sixth Circuit Court of Appeals recently ruled that a Vanderbilt University medical professor had not proven that she was treated less fairly because of her gender and upheld the district court’s summary judgment in Vanderbilt’s favor based on its determination that she had failed to identify suitable male comparators and because she failed to make out a prima facie case of gender discrimination.

In Simpson v. Vanderbilt University, No. 16-5381 (6th Cir. May 22, 2017), plaintiff Jean Simpson was a professor in the Vanderbilt Medical School and was employed by the medical school and the Vanderbilt Medical Group. While she was employed, she started, ran and solicited clients for her own private medical practice, actions which Vanderbilt believed were in violation of its conflicts of interest policy, among other policies. After trying unsuccessfully to resolve the matter, Vanderbilt terminated her employment and she filed suit alleging violations of both Title VII of the Civil Right Act and the Tennessee Human Rights Act because of her gender. As noted, the district court granted summary judgment to Vanderbilt and Simpson appealed.

Dr. Simpson began her employment at Vanderbilt in 1997 and at the time of her termination, she was a full-time faculty member in the Division of Anatomic Pathology, which formerly included a dedicated breast pathology consult service. That dedicated service was eliminated in 2012 and general surgical pathology took over the practice. While the reorganization was still pending, Simpson began her own company, Breast Pathology Consultants, Inc. (“BPC”), which provided services that were virtually identical to the dedicated breast pathology consult service, and without Vanderbilt’s knowledge, began actively soliciting pathologists for whom she had previously provided services offering them services through her company. During this time, she continued to be a Vanderbilt employee but from February 2012 through October 2013, she collected nearly $250,000 in fees through her company in addition to her Vanderbilt salary.

In the summer of 2012, Vanderbilt discovered Simpson’s arrangement with BPC, and over the next year repeatedly informed her that she was violating the medical group’s conflict of interest policy, among other things, and demanded that she cease her work through BPC or face possible disciplinary action, including termination. She eventually filed an updated conflict disclosure form in which she disclosed her work with BPC but she otherwise denied that her activities conflicted with Vanderbilt and claimed that several male colleagues had engaged in similar activity and were allowed to maintain their outside practices.

Vanderbilt appointed a faculty committee that investigated the claims and determined that Simpson’s conduct violated the conflict of interest policy and also constituted neglect of duty. It recommended that Simpson be fired for cause and be forced to return the payments she received through her outside business. She was offered the option of resigning in lieu of termination if she paid Vanderbilt the funds she earned from her business, which she refused to do. After she was terminated for cause, she filed her lawsuit alleging violations of both Title VII and the Tennessee Human Rights Act based on gender discrimination. The district court granted summary judgment in favor of Vanderbilt because it determined that she failed to make out a prima facie case under the McDonnell Douglas burden-shifting framework and that even if she had, she failed to demonstrate that the stated reason for her termination was a pretext.

In reviewing the district court’s ruling, the Sixth Circuit first noted that to make out a prima facie case under McDonnell Douglas, a plaintiff must demonstrate that: 1) she is a member of a protected class; 2) she was subjected to an adverse job action; 3) she was qualified for the position; and 4) similarly situated male employees were treated more fairly. Because the parties agreed that she met the first three criteria, the appeals court confined its analysis of the district court’s ruling to addressing the “similarly situated” prong. It stated that in order for a person to be considered a similarly situated comparator, Simpson needed to prove that all the relevant aspects of her employment situation were “nearly identical” to those of the cited male employees. As an example, it stated that “similarly situated” in an employment context means that comparators must have dealt with the same supervisor, been subjected to the same standards and have engaged in similar conduct without differentiating or mitigating circumstances.

Dr. Peter Donofrio, the comparator that Simpson attempted to use, worked briefly for the “Best Doctors” website while he was a Vanderbilt employee and disclosed that work on his 2011 conflict of interest form. After he disclosed this work, Vanderbilt instructed him to cease his engagement with the website. While he initially complied, he resumed his work with Best Doctors in 2012, which Vanderbilt learned about during discovery in this matter. Vanderbilt conducted a disciplinary review as a result and while he was not terminated, he was required to pay $122,000 in fees to Vanderbilt and was put on two-years’ probation. As such, the court determined that his case was clearly different from Simpson’s since at a minimum, Dr. Donofrio ceased working when confronted and paid back the tainted earnings. The court further found that the additional male doctors she referenced were also not similarly situated because they had primarily been granted permission by Vanderbilt, after disclosure, to earn outside income as they transitioned either to retirement or private practice.

Based on the above, the Sixth Circuit affirmed the trial court’s summary judgment decision as it agreed that Simpson had failed to meet the fourth McDonnell Douglas factor.

STATE COURTS MUST PLACE ARBITRATION AGREEMENTS ON EQUAL FOOTING WITH ALL CONTRACTS, JUST LIKE FEDERAL COURTS

In Kindred Nursing Ctrs. P’ship v. Clark, 581 U.S. –, 2017 U.S. LEXIS 2948 (May 15, 2017), the Supreme Court reiterated its long-standing position that any laws that single out arbitration agreements for disfavored treatment run afoul of the Federal Arbitration Act’s requirement, at 9 U.S.C. § 2, that courts must place such agreements “on equal footing with all other contracts” and reversed the decision of the Kentucky Supreme Court.

The case before the Court was a consolidation of two separate cases that had been decided in Kentucky state court. Beverly Wellner and Janis Clark were the wife and daughter, respectfully, of Joe Wellner and Olive Clark, two deceased former residents of a nursing home owned by Kindred. Both held a power of attorney for their respective relatives and both of those powers of attorney granted them broad powers. The Wellner POA gave Beverly the authority to, among other things, institute legal proceedings and make “contracts of every nature in relation to both real and personal property.” The Clark POA provided Janis with full power to transact, handle and dispose of all matters affecting Olive’s estate and to “draw, make, and sign in my name any and all . . . contracts, deeds or agreements.” When both Joe and Olive moved into the Kindred facility in 2008, Beverly and Janis both signed the necessary paperwork pursuant to their POAs, including identically-worded arbitration provisions that stated: “any and all claims or controversies arising out of or in any way relating to . . . the Resident’s stay at the Facility” would be resolved through binding arbitration.

Both Joe and Olive died in the next year and Beverly and Janis filed separate suits in Kentucky state court making the same basic claim, that is, that Kindred’s substandard care had caused both deaths and Kindred filed motions to dismiss citing the arbitration agreements. The trial court denied the motions and the Kentucky Court of Appeals agreed, allowing both suits to go forward.

The Kentucky Supreme Court consolidated the cases and affirmed the lower court decisions. The court initially examined the language of both POAs and determined that the Wellner POA did not permit Beverly to enter into an arbitration agreement. Conversely, it determined that the Clark POA was broad enough to allow Janis to enter into such an agreement. However, it held that both the agreements were invalid because it determined that a POA could not entitle a representative to enter into an arbitration agreement without specifically saying so. It explained the ruling by stating that the Kentucky Constitution protected its citizen’s rights to access its courts and trial by jury and, as such, it could be waived only if such power was specifically stated in the POA, the so-called “clear-statement rule.” The court attempted to explain its way around the FAA’s clear mandate by stating that the clear-statement rule would also apply in the future to other contracts that implicated “fundamental constitutional rights.” Three Kentucky justices filed a dissent in which they concluded that the new rule ran afoul of the FAA. The U.S. Supreme Court granted certiorari.

The Supreme Court began its analysis by reiterating its long-standing rule, recently restated in AT&T Mobility, LLC v. Concepcion, 563 U.S. 333 (2011) and DIRECTV, Inc. v. Imburgia, 136 S.Ct. 463 (2015), that the FAA mandates that arbitration agreements must be on an equal plane with all other contracts and that while a court may invalidate arbitration agreements based on general contract defenses such as fraud or unconscionability, it may not do so on legal rules that apply only to arbitration agreements, even when such rules coyly avoid using the word “arbitration” and substitute phrases like “right to trial by jury” and “access to courts” like the Kentucky high court did. It determined that the clear-statement rule tried to accomplish precisely what Concepcion bars, that is, adopting a legal rule “hinging on the primary characteristic of an arbitration” – waiving the right to go to court and receiving a jury trial. To illustrate the Kentucky court’s thinly-veiled pretextual reasoning, the Supreme Court noted, for example, that nothing in the clear-statement rule prevented a representative from signing a settlement agreement or consent to a bench trial on the principal’s behalf, stating “[m]ark that as another indication that the court’s demand for specificity in powers of attorney arises from the suspect status of arbitration rather than the sacred status of jury trials.” Based on its long-standing FAA jurisprudence, the Court determined that the Kentucky court’s clear-statement rule “flouted the FAA’s command to place those agreements on an equal footing with all other contracts.”

As to the specific cases before it, the Court reversed the Clark decision since the Kentucky court had determined that that POA was broad enough to allow entry into an arbitration agreement but invalidated it based on the clear-statement rule that the Supreme Court determined violated the FAA. By contrast, the Court vacated and remanded the Wellner decision. As noted, that decision was based on the Kentucky Supreme Court’s ruling that the POA was not broad enough to allow Beverly to enter into an arbitration agreement. The Supreme Court stated if the Kentucky court’s interpretation of the agreement is “wholly independent” of the clear-statement rule, “then nothing we have said disturbs it.” However, it went on to state “[b]ut if the rule at all influenced the construction of the Wellner power of attorney, then the court must evaluate the document’s meaning anew.”

In this 7-1 decision, with Justice Thomas dissenting based on his belief that the FAA does not apply to the states, the Court left little doubt that the FAA’s mandate that arbitration agreements must be placed on equal footing with all contracts remains inviolate.

NEW YORK FEDERAL COURT ALLOWS SEXUAL ORIENTATION DISCRIMINATION CASE TO PROCEED

In Philpott v. State of New York, No. 16 CIV 6778 (AKH) (S.D.N.Y. May 3, 2017) (order granting in part and denying in part defendant’s motion to dismiss), an ongoing case in the Southern District of New York that bears following as it progresses, a federal judge ruled that the plaintiff’s claim for sexual orientation discrimination was cognizable under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. (“Title VII”), and therefore, could proceed.

Philpott is a former Vice President of Student Affairs at SUNY’s College of Optometry who filed this case against the state of New York, the University of the State of New York and State University of New York claiming that he was discriminated against and harassed on the basis of his sexual orientation under both Title VII and Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681, et seq. (“Title IX”) and chemical dependence under the Americans with Disabilities Act and that he was terminated shortly after he made those complaints. The gist of Philpott’s discrimination claim was that over a period of several years, the president of SUNY Optometry, and one of plaintiff’s co-workers 1) made a range of discriminatory comments directed at him; 2) excluded him from meetings and projects because of his sexual orientation; and 3) when he finally complained about this discrimination, his employment was terminated shortly thereafter. Defendants filed motions to dismiss and prior to the court’s decision, plaintiff dismissed all the defendants except SUNY and also dismissed his ADA claim. As such, the court needed to determine whether he had cognizable claims under Title VII and/or Title IX against SUNY and, if he did, whether he had stated a plausible claim.

As to any possible claim under Title VII, Judge Hellerstein first noted that while the Second Circuit has held that that title does not prohibit discrimination based on sexual orientation, in a March 27, 2017 decision in Christiansen v. Omnicom Grp., Inc., 852 F.3d 195 (2d Cir. 2017), the Second Circuit held that though a sexual orientation discrimination claim was not cognizable under Title VII, “a claim based on the gender stereotyping theory of sex discrimination” was. Judge Hellerstein went on to point out that in Christiansen, two of the three judges joined in a concurring opinion that he said, “persuasively outlines why sexual orientation discrimination is a form of sex discrimination and should therefore be cognizable under Title VII.” Essentially, the Christiansen concurrence stated that sexual orientation is sex discrimination because “it treats otherwise similarly-situated people differently solely because of their sex” because “sexual orientation cannot be defined or understood without reference to sex.” The concurrence went on to say that “such discrimination is inherently based on gender stereotypes.”

Judge Hellerstein then noted that on April 4, 2017, the Seventh Circuit, in an en banc decision in Hively v. Ivy Tech Cmty. Coll. of Indiana, 853 F.3d 339 (7th Cir. 2017) (en banc), became the first federal circuit court of appeals “to unequivocally hold that ‘discrimination on the basis of sexual orientation is a form of sex discrimination’ and therefore cognizable under Title VII.” The Hively court stated that it was compelled to make that determination by “the common-sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex.” Based on the Christiansen concurrence and the Seventh Circuit’s decision in Hively, the court determined that Philpott’s allegations in the complaint had stated a claim for gender stereotyping discrimination, even though he had framed his complaint in terms of sexual orientation discrimination.

The court did, however, dismiss Philpott’s claims under Title IX because it held that the remedies available under Title IX are limited to student plaintiffs and do not extend to employment discrimination claims.

Obviously, this case bears following as it progresses, especially considering the Seventh Circuit’s decision in Hively.