Category Archives: Discrimination and Harassment

Cain Harassment Allegations Highlight Settlement Agreement Terms

In the past few days, the media has been buzzing about accusations of sexual harassment made against GOP presidential contender Herman Cain when he was chief executive of the National Restaurant Association. The New York Times reported today that there were two women who accused Cain of harassment and received paid settlements; one received $35,000, one year’s salary.

The exact allegations have not been discussed — except by Cain, who has said that he told one of the accusers that she was the same height as his wife. Cain also seems to be the only one speaking on the record about settlement amounts (he stated earlier that one of the accusers received a few months’ pay; the Times got its information from “three people with direct knowledge of the payment,” but no names named as yet). He has also said that an investigation revealed that the accusations had “no basis,” and that he has never sexually harassed anyone.

Now, the lawyer for one of the women has come forward and indicated that his client would like to join the conversation — but she can’t because of a confidentiality clause in her settlement agreement. This is quite common, especially when the settlement agreement is intended to resolve known disputes (as opposed to a standard release of claims, which employees are often asked to sign as a condition of receiving severance pay, for example). Sometimes, a confidentiality agreement requires that only the amount of the settlement be kept secret; sometimes, the agreement covers much more, including the fact that it exists in the first place. An employee who breaches confidentiality might have to pay liquidated damages, return the money paid under the agreement, or agree to some other penalty.

So do Cain’s comments violate the confidentiality agreement? Full disclosure: I have no idea. But one possibility is that he isn’t a party to the agreement at all. If the agreement is between the National Restaurant Association and the accuser, Cain may not be bound by it, personally. Also, confidentiality agreements aren’t always mutual — that is, they don’t always bind the employer as well as the employee. Typically, it’s the employer who wants confidentiality, because it doesn’t want other employees (who may also have claims) to know that it’s willing to settle or for how much.

We may soon find out the details, of both the allegations and the settlement agreement terms: The accuser’s lawyer says he has asked the NRA to release his client from her confidentiality obligations.

Wal-Mart Wins Class Action Case in Supreme Court

Yesterday, the Supreme Court gave employers a huge win in the case of Wal-Mart Stores v. Dukes. The case was a class action lawsuit that alleged the giant retailer discriminated against female employees when making decisions on pay and promotions. There were three named plaintiff-employees, who sought to bring the lawsuit on behalf of more than a million female employees nationwide.

The Supreme Court wasn’t asked to rule on whether any employees had been discriminated against. Instead, the Court looked only at the class action issue: whether it was appropriate for the employees to bring these claims as a group. The Court concluded that it was not — and the ruling will likely result in fewer class actions over all kinds of issues, from civil rights cases to product liability claims.

The employees claimed that Wal-Mart engaged in a pattern and practice of discrimination against women by allowing its (mostly male) managers to exercise nearly unfettered discretion in making pay and promotion decisions, within a corporate culture that relied on gender-based stereotypes. The effect of this combination, the plaintiffs claimed, were significant disparities in pay and promotions to management between women and men. The employees presented anecdotal evidence from employees and statistical evidence of the disparities, in their effort to get a class action certified.

In a class action, a representative group brings a lawsuit on behalf of everyone who’s in the same position. The class action framework is intended to promote efficiency and fairness by allowing everyone’s claims to be decided at the same time, according to the same standards, rather than through a number of separate lawsuits that could result in contradictory outcomes. But to bring a class action, the plaintiffs have to meet certain requirements, intended to make sure that it’s fair both to other class members — whose rights will be determined by the lawsuit, even if they don’t participate — and to the defendant, who will have to defend against time-consuming and costly large-scale allegations.

The Supreme Court decided that the case couldn’t proceed as a class action because the plaintiffs hadn’t met one of these threshold requirements: that there be at least one common issue of law or fact among the class members (“commonality”). Because the women worked at stores across the 50 states, reporting to different managers, and bringing their own skills, performance history, and other attributes into play, the Court found that they didn’t have commonality. The Court was especially dismissive of the plaintiffs’ claim that allowing managers to make subjective, discretionary decisions could provide the necessary common ground for the class action.

Four Justices dissented from this part of the ruling. Justice Ginsburg, writing for the minority, identified the key common question for the class as “whether Wal-Mart’s discretionary pay and promotion policies are discriminatory.” In addition to reviewing the plaintiffs’ statistical and anecdotal evidence, she pointed to other facets of Wal-Mart’s nationwide practice, such as requiring that all employees promoted to management be willing to relocate and allowing managers to set pay within a two dollar range, which left room for the operation of gender bias.

The majority’s opinion in the Wal-Mart case is likely to have a significant impact on future class actions because it sets a stricter standard for getting these cases off the ground. As Justice Ginsburg points out, the commonality standard had previously been interpreted more leniently. The key question wasn’t whether there were dissimilarities among the class members, but whether there was at least one crucial similarity, a question that could be answered for the entire group. We’ll have to see what the ultimate effect of this case will be, as lower federal courts apply it going forward. For now, though, advocates for business groups and employees alike agree that it will limit the number and size of class actions in the future.





Summer Jobs and Sexual Harassment

June is here, and it’s time for teenagers everywhere to don their uniforms, paper hats, and  flair for their summer jobs (if they’ve been lucky enough to land one). But be careful out there kids: Sexual harassment of teens is a big problem, particularly for girls. Just yesterday, the EEOC announced that it had settled a case for $290,000 against a Dunkin’ Donuts franchise, in which a manager had repeatedly touched, hugged, and made lewd comments to female teenage employees.

Although the EEOC keeps statistics on sexual harassment charges, the agency doesn’t provide the age of the complaining employee. And of course, just like adults, many girls choose not to complain or file a charge. According to one study cited in the PBS program “Is Your Daughter Safe at Work,” 200,000 girls are assaulted in the workplace every year. A 2005 study showed that almost half of the teenage girls surveyed had been harassed at their jobs.

These numbers are high, but unfortunately not that surprising. Egregious sexual harassers are predators, and predators choose their prey with care. Teenage girls are targeted precisely because they are the least experienced, least powerful, and least likely to complain. To help combat the problem, the EEOC has set up its Youth at Work website, which informs teens of their rights and responsibilities under the laws that prohibit harassment and discrimination.