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Employment Claims Based on Association with Another Person

10/23/2008

“Relationship” cases are not exactly new; early cases often alleged discrimination based on interracial dating or marriage.  In several recent cases, courts have explored the boundaries of situations in which family or other relationships resulted in litigation consequences.

The first couple of cases are unusual in that they involve an employee’s family member with significant medical costs.  DeWitt and her husband, Anthony, were covered under Proctor Hospital’s health insurance plan.  Anthony suffered from prostate cancer and received expensive medical care.  Proctor was partially self-insured up to $250,000 per year.

In 2003, the DeWitts’ medical claims for Anthony were $71,684.  In 2004, the figure jumped to $177,826.  In the first eight months of 2005, the expenses were $67,282.

In September 2004, DeWitt’s supervisor, Davis, asked what treatment Anthony was receiving, and DeWitt responded that he was undergoing chemotherapy and radiation.  Davis asked DeWitt if she had considered hospice care for her husband.  Davis explained that a committee was reviewing Anthony’s medical expenses, which she described as unusually high.  In February 2005, Davis again asked DeWitt about Anthony’s treatment.  In May 2005, Davis informed the employees that Proctor faced financial troubles, which, according to Davis, required a “creative” effort to cut costs.

Proctor fired DeWitt on August 3, 2005, for alleged insubordination.  DeWitt sued for age and gender discrimination and a violation of the Americans With Disabilities Act (“ADA”).  The district court granted summary judgment for Proctor Hospital and DeWitt appealed.

Dismissal of DeWitt’s age and gender discrimination claims was affirmed.  Not so as to the ADA claim.  Under the ADA, an employer is prohibited from discriminating against an employee as a result of the known disability of an individual with whom, the employee is known to have a relationship or association.  42 U.S.C. § 12112(b)(4).  DeWitt alleged that Proctor fired her to avoid having to continue to pay for Anthony’s substantial medical costs under Proctor’s self-insured health insurance plan.

In an earlier case, Larimer v. International Business Machines Corp., 370 F.3d 698, 700 (7th Cir. 2004), the court of appeals had outlined three categories into which “association discrimination” plaintiffs generally fall:  (1) expense; (2) disability by association; and (3) distraction.  In the “expense” scenario, the court noted that an employee, fired because her spouse has a disability that is costly to the employer, falls within the intended scope of the “associational discrimination” section of the ADA.

The court said DeWitt provided fairly persuasive circumstantial evidence that her case was one relying on direct evidence.  Proctor, which faced financial trouble, was very concerned about cutting costs.  Because Proctor’s unusually high stop-loss insurance coverage was inapplicable until claims exceeded $250,000, Proctor felt the bite of DeWitts’ expenses.  According to the appellate court, Proctor was not discreet about its concerns:  In a May 2005 meeting, Davis informed Proctor’s clinical managers that the hospital would have to be creative in cutting costs.

Additionally, Proctor was specifically interested in the high cost of Anthony’s medical treatment.  The timing of DeWitt’s termination also suggested that Anthony’s continued cancer treatment was an important factor in Proctor’s decision.  According to the court of appeals, a reasonable juror could conclude that Proctor, which faced a financial struggle of indeterminate length, was concerned about Anthony’s future medical costs.  Because DeWitt established that direct evidence of “association discrimination” may have motivated Proctor in its decision to fire her, summary judgment for Proctor was inappropriate.

DeWitt also asserted that the district court erred in refusing to allow her to amend her complaint to add a claim of ERISA retaliation.  Under Section 510 of ERISA, an employer may not discharge a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan.  29 U.S.C. § 1140.  This provision seeks to discourage employers from discharging or harassing their employees in an attempt to prevent them from using their pension or medical benefits.

Based on many of the same facts, a reasonable jury could have concluded that Proctor retaliated against DeWitt, and thereby committed an ERISA violation.  The court of appeals reversed the district court on this point as well.  DeWitt v. Proctor Hosp., 517 F.3d 944 (7th Cir. 2008).

In the next case, William and Debra Trujillo were employed by PacifiCorp.  The Trujillos participated in their employer’s health insurance plan.  The Trujillo’s son, Charlie, suffered from a brain tumor that later metastasized to his spine.  He suffered a relapse on May 30, 2003, and was deemed to be in the final stages of cancer.  Charlie’s medical care providers recommended aggressive experimental treatments to reverse the progression of the disease.  In six weeks, Charlie’s medical bills exceeded $62,000.

PacifiCorp employees, at both the local and corporate level, were aware of Charlie’s condition, and there was evidence the company was focused on healthcare costs.  Because it was a self-insured company, insurance claims for Charlie’s healthcare were paid directly by PacifiCorp.  One company executive commented that 90% of all healthcare costs were incurred as a result of only 10% of the employees.  Charlie was one of only two people with a terminal illness during the relevant time period. 

Healthcare costs for each employee were factored into the plant’s line budget item for labor costs.  The labor union and company met annually to review the past year’s health care claims and claims experience. 

On June 10, 2003, just eleven days after Charlie’s relapse, PacifiCorp began an investigation into alleged “time theft” by the Trujillos.  The investigation resulted in the termination of the couple.  The Trujillos sued and claimed they were terminated because of the health care costs associated with their son’s illness. 

As pointed out in the DeWitt case, the ADA provides that covered employers shall not discriminate against a qualified individual with a disability.  Disability discrimination includes denying jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association. 

The district court held the Trujillos failed to raise a reasonable inference that Charlie’s disability was a determining factor in PacifiCorp’s decision to terminate them.  The court of appeals disagreed.  The court examined the earlier Seventh Circuit Larimer case.

In Larimer, the plaintiff had claimed he was terminated because his twin daughters were born prematurely and thus had the potential to cost his employer greatly in medical benefits.  The court identified several types of ADA “association discrimination” cases:

The categories can be illustrated as follows:  an employee is fired (or suffers some other adverse personnel action) because (1) (“expense”) his spouse has a disability that is costly to the employer because the spouse is covered by the company’s health plan; (2a) (“disability by association”) the employee’s homosexual companion is infected with HIV and the employer fears that the employee may also have become infected, through sexual contact with the companion; (2b) (another example of disability by association) one of the employee’s blood relatives has a disabling ailment that has a genetic component and the employee is likely to develop the disability as well (maybe the relative is an identical twin); (3) (“distraction”) the employee is somewhat inattentive at work because his spouse or child has a disability that requires his attention, yet not so inattentive that to perform to his employer’s satisfaction he would need an accommodation, perhaps by being allowed to work shorter hours.

Larimer, 370 F.3d at 700.  The Trujillo’s case was an “expense” type case.  The court of appeals noted that the Trujillos offered both evidence of general concerns about the rising cost of healthcare to specific facts that Charlie’s claims were considered high dollar, that there was only one other terminal illness during the relevant time period, and that PacifiCorp was keeping tabs on those claims. 

The Trujillos also presented evidence that insurance costs factored into the line budget item for labor costs of each employee.  The Trujillos offered an e-mail regarding Mrs. Trujillo’s personal leave related to Charlie’s illness in which the company stated it monitored both health and welfare benefits in conjunction with an employee’s personal leave.  From the evidence the Trujillos presented – concerns about rising healthcare costs, numerous efforts to cut those costs, corporate monitoring of general healthcare costs and of Charlie’s claims specifically – a jury could reasonably infer that PacifiCorp terminated the Trujillos because they were expensive employees.

According to the court, the Trujillo’s strongest evidence of discriminatory motive was found in the temporal proximity between the time of Charlie’s relapse and the investigation of the alleged time theft and their termination.  Thus, the Trujillos established a prima facie case of association discrimination in the “expense” category. 

However, PacifiCorp asserted that the Trujillos intentionally falsified time records in order to earn compensation for time they had not worked.  In response, the Trujillos offered evidence regarding the differential treatment of similarly situated employees.  For example, approximately four weeks prior to Mr. Trujillo’s termination, another long-term employee, Linda Todd, was under investigation by the same management employees for two separate incidents in which she made threats of violence against other employees.  During the course of the investigation, Todd maintained that stress caused her behavior.  She was initially put on short-term disability leave until her situation improved, although she was ultimately terminated for working while on that leave, among other reasons.  Todd’s treatment differed from the treatment of both Trujillos.  Rather than progressively disciplining the Trujillos, taking into consideration their past performance and their current situation, PacifiCorp immediately terminated them. 

The Trujillos also presented evidence of a situation in which an employee was not terminated after committing serious misconduct by viewing pornography twice on company computers.  Finally, the Trujillos offered evidence that many other employees had been punished with days off without pay, rather than termination, for time sheet violations.  This disparate treatment of similarly situated employees contributed to a reasonable inference of pretext, defeating PacifiCorp’s claimed legitimate business reason for terminating the Trujillos.

The Trujillos also argued that PacifiCorp terminated them in violation of ERISA.  The Trujillos provided sufficient evidence that the decision to terminate them was based on discriminatory intent to violate the ADA.  That evidence also supported an inference that their discharge was motivated by an intent to interfere with their ERISA benefits.  Summary judgment for Pacificorp was reversed.  Trujillo v. PacifiCorp, 524 F.3d 1149 (10th Cir. 2008).

The next case, though recent, is a little more typical in that it involves an interracial relationship.  It was the first time the Second Circuit was called upon to decide whether discrimination against a black man, married to white woman, violated Title VII.  Holcomb was an assistant coach of the Iona College “Gaels” men’s basketball team.  The Gaels had successful seasons in 1998, 2000, and 2001.  In June 2000, Holcomb married Gauthier, an African-American woman. 

About that time, the basketball program began to suffer, and the college eventually became concerned about the team’s on-court results and its off-court activities.  Reports to the college made no specific criticisms of Holcomb, but did criticize the coaching staff as a whole.  The reports said that the staff could not get along, that it was “poor” politically, and that it did not work as it needed to in order to make the program successful. 

The college President and three Vice-Presidents decided to terminate Holcomb and another assistant coach, Chiles.  Holcomb was asked to resign.  He refused, and was later terminated by letter dated May 14, 2004.  In his lawsuit, Holcomb claimed that the college’s decision to terminate his employment was motivated by his marriage to a black woman.  In response, the college said that Holcomb was removed from its staff as part of a necessary overhaul of a poorly performing team, and denied that the decision was based on race.  The district court entered summary judgment for Iona College and Holcomb appealed.

To establish a prima facie case, Holcomb had to show: (1) he belonged to a protected class; (2) he was qualified for the position he held; (3) he suffered an adverse employment action; and (4) the adverse employment action occurred under circumstances giving rise to an inference of discriminatory intent.  The second and third elements of Holcomb’s prima facie case were not in question. 

Holcomb alleged that he was discriminated against as a result of his marriage to a black woman.  The Second Circuit Court of Appeals had never ruled on the question of whether Title VII applies in such circumstances.  The court concluded that where an employee is subjected to adverse action because an employer disapproves of an interracial association, the employee suffers discrimination because of the employee’s own race. 

Here, the college decided to fire Holcomb, a white man married to an African-American woman, and Chiles, an African-American man, while retaining O’Driscoll, a white man, who was not in an interracial relationship.  Director of Athletics Brennan and Vice-President Petriccione both knew that Holcomb was married to an African-American woman, and the facts suggested that both Brennan and Petriccione played a role in the termination decision. 

The appellate court agreed there was evidence that Iona College had good reason to make some changes to its men’s basketball program.  Head coach Liguori testified that he chose to retain one of the three coaches for the sake of continuity, and that he selected O’Driscoll because it had been reported that O’Driscoll worked well with other departments.

According to the court, Holcomb, who claimed that the college acted with mixed motives, was not required to prove that the employer’s stated reason was a pretext.  Instead, he could show that the impermissible factor was a motivating factor without necessarily proving that the employer’s explanation was not some part of the employer’s motivation. 

The appellate court said that a jury could find that Brennan and/or Petriccione wanted to remove Holcomb because his wife was African-American and that Brennan and/or Petriccione played a decisive role in the termination decision.  A reasonable jury could favor Holcomb’s version of events on each of these two steps, and thereby reach the conclusion that race played an illegitimate role in the college’s decision.  Summary judgment for the college was reversed.  Holcomb v. Iona College, 521 F.3d 130 (2d Cir. 2008).

The next case involved a claim of retaliation, and clearly expands the law by allowing a plaintiff to claim retaliation based on a family member’s charge of discrimination.  Thompson worked as a metallurgical engineer for North American Stainless, LP.  At the time of Thompson’s termination, he and Regalado were engaged to be married.  Their relationship was common knowledge at North American Stainless.

Regalado filed a charge with the Equal Employment Opportunity Commission alleging that her supervisors discriminated against her based on her gender.  A few weeks later, North American Stainless terminated Thompson’s employment.  Thompson alleged that he was fired in retaliation for Regaldo’s EEOC charge.  The complaint was dismissed on a motion for summary judgment.

Thompson appealed, contending that the anti-retaliation provision of Title VII prohibits an employer from terminating an employee based on the protected activity of his fiancée, who works for the same employer.  Section 704(a) of Title VII of the Civil Rights Act of 1964 prevents retaliation by employers for two types of activity, “opposition,” and “participation.”

It shall be an unlawful employment practice for an employer to discriminate against any of his employees . . . because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under his subchapter.

42 U.S.C. § 2000e-3.

The court of appeals found this to be the issue:  Does Title VII prohibit employers from taking retaliatory action against employees not directly involved in protected activity, but who are so closely related to or associated with those who are directly involved, that it is clear that the protected activity motivated the employer’s action?

According to the court, a literal reading of Section 704(a) suggests a prohibition on employer retaliation only when it is directed at the individual who instituted the protected activity.  Such a reading, however, defeats the purpose of Title VII.  The court said there was no doubt that an employer’s retaliation against a family member, after an employee files an EEOC charge, would under Burlington Northern and Santa Fe Railway Co. v. White, 548 U.S. 53 (2006), dissuade a reasonable worker from such an action.

The district court believed it was obliged to grant summary judgment even though it acknowledged that its ruling would undermine the purposes of Title VII.  The district court recognized that retaliating against a spouse or close associate of an employee would deter the employee from engaging in protected activity just as much as if the employee were himself retaliated against.

As the court of appeals noted, other courts have made a similar observation.  See, e.g., Fogleman v. Mercy Hosp., Inc., 283 F.3d 561, 569 (3d Cir. 2002) (“Allowing employers to retaliate via friends and family, therefore, would appear to be in significant tension with the overall purpose of the anti-retaliation provisions, which are intended to promote the reporting, investigation, and correction of discriminatory conduct in the workplace.”); Holt v. JTM Indus., Inc., 89 F.3d 1224, 1227 (5th Cir. 1996) (“We recognize that there is a possible risk that an employer will discriminate against a complaining employee’s relative or friend in retaliation for the complaining employee’s actions.”)  The court in Fogleman even noted, “To retaliate against a man by hurting a member of his family is an ancient method of revenge, and is not unknown in the field of labor relations.” (quoting NLRB v. Advertisers Mfg. Co., 823 F.2d 1086, 1088 (7th Cir. 1987)).

The court of appeals concluded that permitting employers to retaliate (and not the individual conducting the protected activity), would still deter persons from exercising their protected rights under Title VII.  The court of appeals reversed dismissal of the complaint.  Thompson v. North Am. Stainless LP, 520 F.3d 644 (6th Cir. 2008).

To avoid harassment and discrimination claims, some employers prohibit dating or marriage among employees.  The next case involved a policy prohibiting relationships between managers and hourly employees.  United Parcel Service’s nonfraternization policy forbids a manager from having a romantic relationship with any hourly employee, even an employee the manager does not supervise.  Ellis, an African-American, sued UPS claiming it fired him because of his race and because he was married to a white woman, in violation of Title VII of the Civil Rights Act of 1964.  The district court granted summary judgment for UPS, and Ellis appealed. 

Ellis began dating an hourly employee, Greathouse.  For more than three years, Ellis kept quiet about the relationship, and Greathouse told only one close friend.  Other employees eventually learned that Ellis and Greathouse had a relationship.  Employee relations manager Baker told Ellis’s direct supervisor Wade, African-American, that “there were plenty of good sisters out there,” which Wade understood to mean that Baker, also African-American, thought Ellis should be dating African-American women.  Ellis testified at his deposition that Baker called him a “sell out” because he was dating Greathouse.

In February 2004, Ellis admitted to Wade that he was dating Greathouse.  She told Ellis that he or Greathouse would have to quit or Ellis would be fired.  Wade reported the relationship to her African-American supervisor, Craft.  Craft met with Wade and Ellis to discuss the relationship.  Craft ordered Ellis to meet with Walker, the human resources manager for the Indiana district.  Walker (also African-American) questioned Ellis about his relationship.  Walker explained that Ellis’s relationship with Greathouse violated the policy, and told Ellis that he had to “rectify the situation.”

However, Ellis did not end the relationship.  In fact, Ellis and Greathouse became engaged.  A little over a year later, in April 2005, they were married.  Ellis believed that their marriage brought him into compliance with the nonfraternization policy.

Three months after their wedding, Walker saw Ellis at a concert, with Greathouse.  Walker contacted Severson, a district manager, and told him that Ellis might be in violation of the nonfraternization policy.  Severson told Walker to investigate and to review his findings with Lewis, the North Central Region human resources manager.  Walker determined that Ellis was in violation of the nonfraternization policy and that the situation had to be resolved.  He met with Ellis and found out that Ellis and Greathouse had been married.  He asked Ellis to resign.  When he refused, Ellis was fired.  UPS said it fired Ellis because he violated the nonfraternization policy and because he had been dishonest.  The district court ruled against Ellis, and he appealed.

The court of appeals said that it had not yet decided whether an employer violates Title VII if it discriminates against an employee because the employee is involved in a relationship with a person of another race.  However, the court declined to address the issue because it concluded that Ellis did not put forward enough evidence to survive summary judgment.

To make out a prima facie case, Ellis had to come forward with evidence that a similarly situated employee who was not involved in an interracial relationship was treated more favorably.  Ellis identified approximately twenty couples he said had been involved in interracial romantic relationships.

To be similarly situated, a manager had to have been treated more favorably by the same decision maker that fired Ellis.  The court found that most of Ellis’s purported comparators were not similarly situated to him because they were not subject to the same decision maker as Ellis when they violated the policy.  In this case, Walker alone made the ultimate decision to fire Ellis.  While Walker consulted with Lewis and in-house counsel to discuss UPS’s potential legal exposure, this just showed that Walker used the resources at his disposal to make an informed decision.

The undisputed evidence showed that Walker was not the decision maker for most of the other managers Ellis identified.  For some of his other comparators, Ellis failed to offer any admissible evidence that they were involved in a romantic relationship with UPS employees at all.  Instead, he relied on his coworkers’ conjecture and speculation that these relationships occurred.

There were four couples for which Ellis offered evidence that a romantic relationship occurred and as to which Walker was involved.  For one of these, however, Ellis offered no evidence that Walker knew about the relationship for the manager involved.  As to the second, Walker learned that the manager was in violation of the policy in 2005, but he left UPS soon after he learned about the relationship and before UPS could take any action.  Regarding the two remaining couples, there was no evidence that Walker treated the managers who were violating the nonfraternization policy better than he treated Ellis.  Ellis’s failure to establish that any other similarly situated manager in an interracial relationship was treated more favorably doomed his discrimination claim.

Interestingly, the court said its decision should not be construed as an endorsement of the UPS nonfraternization policy.  “Although UPS, for the reasons stated, comes out on top in this case, love and marriage are the losers.  Something just doesn’t seem quite right about that.”  Ellis v. United Parcel Serv. Inc., 523 F.3d 823 (7th Cir. 2008).

The last case mentioned here involved only a friendship, not a family relationship.  The EEOC sued Qwest Corporation, alleging that Qwest subjected Parra and Rodriguez to discriminatory discipline and termination based on their national origin (Mexican) and subjected Hebert to discriminatory discipline and termination based on his association with Parra and Rodriguez in violation of Title VII.  Qwest argued that the terminations resulted from a complaint from a customer that Hebert spent time at home during work hours, and its subsequent investigation that revealed that Parra and Rodriguez visited Herbert at home during company time.

Hebert, Rodruguez, and Parra were network technicians.  Their jobs consisted of installing and maintaining the network over which Qwest provides telephone service.  They drove company vehicles to various locations to conduct such work.  An investigation showed that Rodriguez and Parra had visited Hebert’s house during work time and that all three had been engaged in longstanding and widespread violations of Qwest’s code of conduct by falsifying company records to indicate they were working when they were spending excessive amounts of time at Hebert’s house or on unauthorized personal business during work hours. 

As to Hebert’s claim, the court said “this is an association by friendship case.”  However, the law requires more than mere friendship.  The court quoted from Robinett v. First National Bank of Wichita, 1989 WL 21158, *2 (D. Kan. 1989) (emphasis omitted.):

Many courts have recognized a cause of action against an employer for discrimination due to one’s association with minorities under Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981.  Reiter v. Central Consolidated School Dist., 39 F.E.P. Cas. 833 (D. Colo. 1985) (Title VII) and Winston v. Lear-Siegler, Inc., 558 F.2d 1266, 1270 (6th Cir. 1977) (Section 1981).  To maintain a claim of discrimination or harassment based on her association with a black person, plaintiff must show the existence of an association.  The law requires something more than mere work-related friendship.  There must be a significant connection between the plaintiff and the non-white person. 

***

In the present case, plaintiff fails to provide sufficient evidence to establish an association with Ms. Moore to maintain actions under Title VII and section 1982 based on association.  The association between plaintiff and Ms. Moore was that of co-workers who had a good friendship at work.  Plaintiff, as head teller, worked with Moore, a teller, about her work-related problems.  The court accepts as true plaintiff’s allegations that she was more supportive and provided more assistance to Ms. Moore than any other white employee at the Bank’s west branch.  Although plaintiff was very supportive of her black co-worker, this is insufficient to establish the type of relationship between whites and non-whites necessary for a white person to maintain a cause of action of discrimination based on association.  Plaintiff provides no evidence that she actively attempted to vindicate Ms. Moore’s rights or protested against any discrimination against Ms. Moore.

(emphasis omitted.)

In this case, Hebert socialized with Parra and asked Parra to check on his ailing wife.  Hebert also wrote a statement in support of a discrimination claim brought by Parra and other Hispanic technicians, but Hebert did not send the statement to anyone at Qwest.  Moreover, Hebert’s statement appeared to be more of a complaint about supervisor Seubert’s management style rather than race issues.  The statement also related that “I have been friends with Parra for a while and Chris [Seubert] would tell me that ‘if I wanted to stay out of trouble, that I should stay away from the Rodriguez clan.’”  In addition, there was no evidence that the decision maker in the case, Callister, was aware of even the friendship among Hebert and Parra and Rodriguez.

The court found that the alleged relationship between Hebert and Parra did not rise to a level sufficient to invoke a claim of associational discrimination based on Parra’s race.  Accordingly, the court granted summary judgment as to Hebert’s claim, because he failed to show he belonged to a protected class.  EEOC v. Qwest Corp., 103 FEP Cases 887 (D. Ore. 2008).

As pointed out at the outset, relationships can have consequences which may end up in a courtroom.  Cases like DeWitt, Trujillo, Thompson and Holcomb are certainly raising risks for employers.  Employers, judges and juries may wonder how close a relationship or association must be in order to have legal consequence.  Under decisions like Thompson, a plaintiff may now be able to maintain a lawsuit alleging retaliation without actually having done anything which advances the original discrimination charge.  Employers must be cautious to avoid claims of associational disability discrimination and retaliation.  In making hiring decisions, employers must be sensitive to applicants who have some association with a person in a protected category.  As always, there must be a focus on legitimate business considerations, and in discharge or discipline situations, the employer must be particularly careful in documenting the legitimate reasons for the employment action.

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