Indiana Law Review


Survey of Employment Law Developments
for Indiana Practitioners

Susan W. Kline*

Introduction

Although no seismic shifts occurred in Indiana employment law during the
survey period, there were a number of noteworthy developments. Observers
generally agree that the Seventh Circuit continues to be more pro-employer than
most other Circuits. However, two ofthe female justices ofthe Seventh Circuit
called for more plaintiff-friendly interpretations of the proof required to justify
punitive damages,

1

to establish that an employer perceived the plaintiff as
disabled,

2
and to support an affirmative defense in cases ofsexual harassment by

a supervisor.
3

In DeClue v. Central Illinois Light Co.,
4
Judge liana Diamond

Rovner respectfully but spiritedly took issue with the majority holding that an
employer's failure to provide a female lineman with civilized bathroom facilities

was not actionable as hostile environment harassment.5 Judge Rovner's most
indignant statement came in Equal Employment Opportunity Commission v.
Indiana Bell Telephone Co.,

6
where she rejected a defense to punitive damages

based on the employer's collective bargaining agreement and concluded her

detailed dissent by writing:

In the series of [the employer's] ineffective responses to [the

supervisor's] harassment, one has no difficulty detecting a reckless

* Judicial Clerk to ChiefJustice Randall T. Shepard, Indiana Supreme Court. B.S., 1 980,

Butler University; M.B.A., 1992, Butler University; J.D., 2000, Indiana University School of

Law—Indianapolis. The views expressed are those of the author.

1

.

See Gile v. United Airlines, Inc., 2 1 3 F.3d 365, 376 (7th Cir. 2000) (Wood, J., dissenting

in part and concurring in part).

2. See Wright v. 111. Dep't of Corr., 204 F.3d 727, 733-36 (7th Cir. 2000) (Rovner, J.,

dissenting).

3. See Hill v. Am. Gen. Fin., Inc., 218 F.3d 639, 645-47 (7th Cir. 2000) (Wood, J.,

dissenting in part).

4. 223 F.3d 434 (7th Cir. 2000).

5. See id. at 437-40 (Rovner, J., dissenting in part). Judge Rovner wrote:

As my colleagues acknowledge, when an employer provides no restrooms at all to
its employees and expects them to relieve themselves outdoors, the burden falls more

heavily on women than it does on men Ifmen are less reluctant to urinate outdoors,

it is in significant part because they need only unzip and take aim ....

. . . [W]hen, in the face ofcomplaints, an employer fails to correct a work condition

that it knows or should know has a disparate impact on its female employees—that
reasonable women would find intolerable—it is arguably fostering a work environment
that is hostile to women, just as surely as it does when it fails to put a stop to the more

familiar types of sexual harassment.

Id. at 438 (citations omitted).

6. 214 F.3d 813 (7th Cir. 2000).



676 INDIANA LAW REVIEW [Vol. 34:675

indifference to the plight ofthe company's female workers The fact
that it took the company nearly twenty years to bring the harassment to
an end is telling in and of itself.

Twenty years!

I respectfully dissent.
7

Judge Rovner may not be alone in her views because the Seventh Circuit
subsequently granted rehearing en banc in the case.

8
Circuit-watchers should be

alert for signs that these dissenting voices are gaining ground and shifting the
Seventh Circuit toward greater receptivity to plaintiffs' arguments.

This Article begins with a broad overview of national trends and highlights
which types ofplaintiffclaims are most prevalent and which are increasing. The
Article then offers a briefreview ofthe major national developments and moves
on to a statute-by-statute review of significant Seventh Circuit and Indiana
employment cases. A brief discussion of the latest decisions concerning the
states' Eleventh Amendment immunity from certain federal employment laws
follows. After a review ofthe most noteworthy procedural developments during
the survey period, the Article concludes by suggesting several substantive issues

that are percolating and bear further monitoring.

I. Trends in Charge Filings and Resolutions—

A

National Perspective

Recent national Equal EmploymentOpportunity Commission (EEOC) charge
statistics offer a broad perspective on employment law trends.9 Surprisingly,
EEOC charge activity declined in fiscal year 1999 to 77,444 charges received,
but rebounded in fiscal year 2000 to 79, 896 charges, which is the highest volume
since 1997.

10 The overall rate of"reasonable cause" findings remains relatively
low, but in 2000, the percent ofsuch findings increased to a record high ofnearly

nine percent, compared to an annual average of less than four percent over the

prior eight years.
11

Streamlined procedures, coupled with a decline in charges filed, have

enabled the EEOC to process claims more promptly. For example, in 1995, it
took up to eighteen months merely for the EEOC to assign an investigator to a

7. Id. at 836 (Rovner, J., concurring in part and dissenting in part).

8. See EEOC v. Ind. Bell Tel. Co., No. 99-1 1 55, 2000 U.S. App. LEXIS 22797, at * 1 (7th
Cir. Sept. 6, 2000).

9. Title VII, ADA and ADEA plaintiffs must normally file timely EEOC charges prior to
commencing suit. See Douglas L. Williams & Melinda Rothhaar McAfee, Handling the EEOC
Investigation, in 2 ALI-ABACOURSEOF STUDYMATERIALS—EMPLOYMENTANDLABORLAW (8th
ed. 1997) (citing Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)).

1 0. See U.S. EQUALEMPLOYMENTOPPORTUNITYCOMMISSION,ALL STATUTES: FY 1 992-FY

2000 (last modified Jan. 18, 2001), at http://www.eeoc.gov/stats/all.html.

11. See id.



200 1 ] EMPLOYMENT LAW 677

case.
12

In the EEOC's Indianapolis district office, which serves Indiana and
Kentucky, claim processing time has improved to a six-month turnaround. Two
operational changes have contributed to the improvement.

13 The first is a triage
approach, whereby the agency conducts an early evaluation in an effort to

quickly dismiss unfounded complaints and to expedite particularly strong

charges.
14 The second is a voluntary mediation program established in 1999. 15

During the mediation program's first six months, eighty-three percent of

employees agreed to mediation, compared to thirty-five percent of employers. 16

To encourage greater employer participation, the EEOC is publicizing two
important facts: (1) over halfof its mediation settlements result in no monetary

award to the charging party, and (2) on average, mediations are resolved in fewer

than ninety days.
17

Although charge activity is down overall, some charges are becoming more
frequent. Harassment charges, which were virtually nonexistent through 1985,
accounted for over ten percent of the EEOC's charge activity by fiscal year
1990.

18
In 1999, that figure topped eighteen percent.

19

Another notable growth trend is the increase in the number of retaliation
charges filed under various statutes. In fiscal year 2000, twenty-seven percent

of all charges filed included a claim of retaliation, compared to fifteen percent
in 1992.

20

The potential power of a retaliation claim is demonstrated in Pryor v.

Seyfarth, Shaw, Fairweather & Geraldson.21 Pryor, the plaintiff, cited five
incidents ofalleged harassment. However, Judge Richard Posner, writing for a
unanimous panel, dismissed two incidents as "entirely innocuous," two as
"mildly flirtatious," and found only one "possibly suggestive or even

offensive."
22

Therefore, the alleged conduct was not so severe that a rational trier
of fact could conclude that it changed Pryor's workplace conditions.

23

12. See Gregory Weaver, An Agency 's Recovery Act: With More Money and Manpower,

EEOCNow Handles Discrimination Cases More Quickly, INDIANAPOLIS Star, May 29, 2000, at
Gl.

13. See id.

14. See id.

15. See id.

16. See id.

17. See id.

18. See U.S. Equal Employment Opportunity Commission, Trends in Harassment

Charges Filed with the EEOC During the 1980s and 1 990s (last modified July 1 1 , 2000), at
http://www.eeoc.gov/stats/harassment.html.

19. See id.

20. See U.S.EqualEmploymentOpportunityCommission,ChargeStatistics: FY 1992

Through FY 2000 (last modified Jan. 18, 2001), at http://www.eeoc.gov/stats/charges.html
[hereinafter Charge Statistics].

21. 212 F.3d 976 (7th Cir. 2000).

22. Mat 977-78.
23. See id. at 978.



678 INDIANA LAW REVIEW [Vol. 34:675

However, three months after Pryor filed her sexual harassment claim, her law
firm employer fired her for gluing an artificial fingernail onto a friend's finger
in the ladies

9

room.
24 The Seventh Circuit reversed summary judgment for the

firm on the issue of retaliation based on Pryor*s nine-year record of satisfactory
written performance reviews, the firm's failure to follow its progressive

discipline policy, and the fact that the thirty-second process was not prohibited
by any work rule and occurred while Pryor was on break.25 Given these
circumstances, Judge Posner concluded Pryor had a triable retaliation claim,

albeit no triable discrimination claim, because a reasonable jury could find that
the firm used pretextual evidence of misconduct as a "figleaf' to cover up
retaliation for the sexual harassment charge.

26

II. National Employment Discrimination Developments

The leading U.S. Supreme Court employment law case during the survey
period wasReeves v. SandersonPlumbingProducts, Inc. ,

27
an age discrimination

case. The Court granted certiorari in Reeves to resolve a circuit split over
whether a plaintiffs prima facie case for discrimination, coupled with sufficient

evidence for a trier of fact to reject a nondiscriminatory explanation for the

employer's adverse action, is adequate to support a finding of employer

liability.
28 The Court, without deciding that the McDonnell Douglas burden-

shifting framework applies to age discrimination claims, affirmatively answered

that question both in general terms and as applied to the case.
29

Reeves presented a prima facie case for discrimination by showing he was
at least forty years old when he was fired from his position as a manufacturing
supervisor; he was otherwise qualified for the position; he was discharged; and
his three successors in the position were all in their thirties.

30
Sanderson

Plumbing met its burden of production by explaining that it terminated Reeves
for failing to maintain accurate attendance records.

31
Reeves presented rebuttal

evidence that he maintained accurate records and that the true decisionmaker

behind the termination had directed disparaging age-based comments at Reeves.
32

A jury returned a verdict for Reeves, but the Fifth Circuit reversed the
decision*

33 The Fifth Circuit acknowledged the likelihood that a reasonablejury
could have found Sanderson Plumbing's stated employment decision to be

24. See id. at 979.

25. See id. at 979-80.

26. See id at 980.

27. 530 U.S. 133(2000).

28. See id at 2104.

29. See id at 2105, 2108, 2110.

30. See id at 2106.

31. See id at 2103-04.

32. See id at 2107, 21 10-11.

33. See id. &t 2X04.



200 1 ] EMPLOYMENT LAW 679

pretextual.
34

Nonetheless, it held that the trial court erred in denying the

employerjudgment as a matter oflaw because the plainti ffpresented insufficient
evidence that he had been discharged because of his age.

33

Justice O'Connor, writing for a unanimous U.S. Supreme Court, disagreed,
stating that

u
[t]he ultimate question in every employment discrimination case

involving a claim of disparate treatment is whether the plaintiff was the victim
of intentional discrimination."

36
Circumstantial proof that the employer's

explanation is not believable may be sufficiently persuasive to allow a trier of
fact to reasonably infer that the employer is covering up discriminatory intent.

37

Such an inference may be justified if the employer, who is most able to give the
actual reason for the action, has offered a reason that lacks credibility.

38
Factors

to determine whether a court should grant judgment as a matter of law include
the strength of the plaintiffs prima facie case, the probative value of the proof

challenging the credibility of the employer's stated justification, and other

relevant evidence.
39

Some Indiana observers viewed Reeves as a significant victory for plaintiffs
struggling to survive summary judgment.40 This optimism abated two months
later when the Seventh Circuit handed down Kulumani v. Blue Cross Blue Shield
Assoc.

,

41
applyingReeves in the context ofa national origin discrimination case.

42

Plaintiff Kulumani's manager identified three of Kulumani's co-workers for
termination during a company-wide reduction in the workforce, based on

seniority and performance.
43 When the company's human resources director

overrode the decision and released Kulumani instead of one of the manager's

nominees, Kulumani described the action as "suspicious" and therefore

pretextual.
44

However, the Seventh Circuit said that "'pretext for discrimination' means
more than an unusual act; it means something worse than a business error; [it]

34. See id.

35. See id. The Fifth Circuit found against Reeves for several reasons: the age-based

comments did not occur in the direct context ofthe plaintiffs discharge; there was no evidence that

two other persons who recommended Reeves' termination were motivated by age; the two

decisionmakers were over fifty years of age; two other supervisors in Reeves' area were also

accused of faulty recordkeeping; and the employer filled several open management slots with

persons over fifty years of age following Reeves' discharge. See id.

36. Mat 21 11.
37. See id. at 2108.

38. See id. at 2108-09.

39. See id. at 2109.

40. See, e.g., Tim A. Baker, Supreme Court Decision Eases Burden for Discrimination

Plaintiffs, Ind. LAW., July 19, 2000, at 4.

41. 224 F.3d 681 (7th Cir. 2000).

42. See, e.g., Tim A. Baker, 7th Circuit Revisits Pretext Following Supreme Court Ruling,

Ind. Law., Oct. 1 1, 2000, at 4.

43. See Kulumani, 224 F.3d at 683.

44. See id. at.683-84.



680 INDIANA LAW REVIEW [Vol. 34:675

means deceit used to cover one's tracks."
45

Kulumani's evidence showed an
unusual intervention but fell short of the requirement of Reeves, which is "a
dishonest explanation, a lie rather than an oddity or error."

46
Therefore, the

Seventh Circuit affirmed summary judgment for the employer on the merits,47

making it clear that Indiana employees claiming employment discrimination
under the McDonnellDouglas approach still face a substantial evidentiary hurdle
in order to earn the right to a jury decision on the merits.

III. Title VII Developments

A. Harassment: What Conduct Qualifies?

Holman v. State ofIndiana
49

presented the rare circumstance oftrue "equal

opportunity harassment," which the Seventh Circuit held does not fall within the

ambit of Title VII of the Civil Rights Act of 1964.
49

The Holmans, a married
couple working maintenance for the state transportation department, both

experienced inappropriate advances from their shop foreman. The foreman
touched Karen Holman's body, stood inappropriately close to her, asked her for

sex and directed sexist comments at her. He also grabbed Steven Holman's head
while requesting sexual favors.

50

The court noted that "the touchstone of Title VII is . . . discrimination or
disparate treatment" based on gender.

51
Quoting Oncale v. Sundowner Offshore

Services, Inc.,
52

the court identified the critical Title VII issue, for either same-

or opposite-sex harassment, as "whether members of one sex are exposed to
disadvantageous terms or conditions of employment to which members ofthe
other sex are not exposed"* The court acknowledged the concern that
exempting "equal opportunity harassers" could encourage these miscreants to

gain immunity by harassing people ofboth sexes, even though only one sex was
the preferred target.

54
However, the court considered that strategy unlikely,

considering other potential penalties such as employer disciplinary action and

state tort law liability.
55

Judge Evans wrote separately to harmonize the holding with Oncale,
56
which

involved a single-sex workplace. He noted that an equal opportunity harasser

45. /</.at684.

46. Id. at 685.

47. See id

48. 211 F.3d 399 (7th Cir), cert, denied, 121 S. Ct. 191 (2000).

49. See id at 401; 42 U.S.C. § 2000e (2000).

50. See Holman, 21 1 F.3d at 401.

51. Id at 402.

52. 523 U.S. 75(1998).

53. Holman, 233 F.3d at 403 (emphasis added) (quoting Oncale, 523 U.S. at 80).

54. See id. at 404.

55. See id.

56. See id. at 407 (Evans, J., concurring).



200 1 ] EMPLOYMENT LAW 68

1

might engage in such sex-specific and derogatory behavior, as was demonstrated
in Oncale, that the plaintiff could prove discrimination against one or the other

57
sex.

Another case decided during the survey period reaffirmed that Title VII

prohibits discrimination based on sex, but does not prohibit discrimination based
purely on sexual orientation. In Hamner v. St. Vincent Hospital andHealth Care
Center, Inc.,

5* Hamner, a homosexual nurse, complained that his supervisor's
superior had screamed at him, refused to acknowledge or communicate with him,
and harassed him by lisping, making wrist-flipping motions, and joking about
homosexuality.

59
The hospital's stated reason for terminating the nurse's

employment was his alleged willful falsification ofa patient's record. However,
Hamner claimed he was terminated in retaliation for filing a grievance
concerning this alleged discrimination based on sexual orientation.

60

The court said that Hamner's claim might have prevailed had he shown that
the harasser treated all male nurses as homosexuals, or that he harassed only male
and not female homosexual nurses.

61
However, because Hamner did not claim

discrimination based on gender, and only claimed discrimination based on his
sexual orientation, his case was insufficient as a matter of law.62

This stance is consistent with the Seventh Circuit's reputation for being

relatively tough on employment discrimination plaintiffs. The 1993 decision in
Saxton v. American Telephone & Telegraph Co.,6i which has been a favorite
citation ofdefense counsel, played a critical role establishing that reputation. In

Saxton, the plaintiff claimed that a co-worker had tried to kiss her, had touched
her thigh without permission, and hadjumped out ofsome bushes and attempted
to grab her.

64 The Seventh Circuit rejected her argument that this conduct
created a hostile environment, reasoning that it was not sufficiently severe.

65

During the survey period, however, the Seventh Circuit clarified the limits

of the Saxton holding. In Hostetler v. Quality Dining, Inc.,
66

a co-worker at

Burger King grabbed Hostetler's face and "stuck his tongue down her throat."67

The next day, when Hostetler resisted the same co-worker's attempt to kiss her,
he started to unfasten her brassiere.

68
That same week, the co-worker told

Hostetler in crude terms, while she was working at the counter, how effectively

57. See id.

58. 224 F.3d 701 (7th Cir. 2000).

59. See id. at 703.

60. See id. at 704.

61. See id. at 707 n.5.

62. See id. at 707.

63. 10 F.3d 526 (7th Cir. 1993).

64. See id. at 528-29.

65. See id. at 533-34.

66. 218 F.3d 798 (7th Cir. 2000).

67. /«£ at 801.

68. See id.



682 INDIANA LAW REVIEW [Vol. 34:675

he could perform oral sex on her.
69

The district court compared this conduct to that in Saxton and concluded that
the conduct was not sufficiently severe to create a cause ofaction.70 The Seventh
Circuit disagreed.

71
Judge Rovner, writing for a unanimous panel, held that "the

type of conduct at issue here falls on the actionable side of the line dividing
abusive conduct from behavior that is merely vulgar or mildly offensive."

72 Two
of the actions supporting the claim were "unwelcome, forcible physical

contactfs] ofa rather intimate nature,"
73
and even the crude remark, which could

be considered an unwelcome sexual proposition, was "more than a casual
obscenity."

74

Because only a few acts were alleged, Judge Rovner discussed the types of
physical activity that may give rise to an action for harassment. She described
such acts as "[a] hand on the shoulder, a brief hug, or a peck on the cheek" as
acts that are seldom severe enough to be actionable standing alone.

75
Even more

crude or intimate acts such as "a hand on the thigh, a kiss on the lips, a pinch of

the buttocks" may not be sufficiently "severe" in isolation.76 However, the
"physical, intimate, and forcible" acts alleged, which Rovner described as
"invasive, humiliating, and threatening," albeit few in number,justified summary
judgment for the employer.

77

As a final note on the topic of what conduct constitutes harassment, the
Seventh Circuit rejected a novel claim in DeClue v. Central Illinois Light Co.,

78

but only because the cause of action was ill-chosen.
79

Audrey DeClue worked
as an electric company lineman, and traveled with her male crew members by
truck between various job sites each day.

80
She argued that her employer's

failure to provide her with restroom facilities created a hostile environment.
81

Her male colleagues customarily relieved themselves in open areas.
82

Judge Posner, writing for the majority, found no discriminatory intent.
83

However, he acknowledged that DeClue might have had a successful claim under
a disparate impact theory.

84
Judge Rovner dissented, noting that the company

69. See id. at 802.

70. See id. at 805.

71. See id. at 812.

72. Mat 807.
73. Id.

74. Id. at 808.

75. Id.

76. Id.

77. ULU 808-09.
78. 223 F.3d 434 (7th Cir. 2000).

79. See id. at 437.

80. See id. at 435-36.

81. See id. at 437.

82. See id. at 436.

83. See id. at 436-37.

84. See id.



200 1 ] EMPLOYMENT LAW 683

had offered DeClue noworkable and non-stigmatizing alternatives, that DeClue'

s

co-workers had made harassing comments, and that certain job sites afforded
almost no privacy.

85

The split among panel members, coupled with Judge Posner's observation
that DeClue "has waived what may have been a perfectly good claim of sex
discrimination" makes clear that employers who fail to make reasonable efforts
to provide civilized restroom facilities to female employees should expect

litigation and an uphill battle tojustify their refusal.
86

Moreover, DeClue sounds
another note ofwarning: plaintiffs' counsel must know the pleading alternatives
in employment discrimination claims, and craft complaints wisely.

B. Applying the Faragher/Ellerth Analysis: Did the PlaintiffAct Reasonably?

In Burlington Industries, Inc. v. Ellerth*
1
and Faragher v. City of Boca

Raton™ the U.S. Supreme Court established that, under Title VII, employers are
vicariously liable for hostile environment sexual harassment committed by the

plaintiffs supervisor.
89

If the victim suffered no tangible adverse employment
action, however, the employer may assert an affirmative defense requiring proof
by a preponderance oftwo elements: "[ 1 ] that the employer exercised reasonable
care to prevent and correct promptly any sexually harassing behavior, and [2] that

the plaintiff employee unreasonably failed to take advantage of any preventive
or corrective opportunities provided by the employer or to avoid harm
otherwise."

90
The Seventh Circuit requires an employer to show three things to

justify an instruction on the affirmative defense: "(1) the plaintiff endured no

tangible employment action; (2) there is some evidence that the employer
reasonably attempted to correct and prevent sexual harassment; and (3) there is

some evidence that the employee unreasonably failed to utilize the avenues
presented to prevent or correct the harassment."

91

The Seventh Circuit decided three cases during the survey period that clarify
the second prong of the Faragher/Ellerth test, whether the plaintiff acted

reasonably. In Savino v. C. P. Hall Co.,
92
the plaintiffargued that this "avoidable

consequences" doctrine should allow a defendant who successfully asserts the
affirmative defense a reduction in damages owed, but not full absolution from
liability.

93
The Seventh Circuit disagreed, noting that regardless of how the

avoidable consequences doctrine operates in tort law, the U.S. Supreme Court
made clear in Faragher that "unreasonable foot-dragging" by the plaintiff will

85. See id. at 439 (Rovner, J., dissenting).

86. Mat 437.
87. 524 U.S. 742 (1998).

88. 524 U.S. 775 (1998).

89. See Ellerth, 524 U.S. at 765; Faragher, 524 U.S. at 808.

90. Ellerth, 524 U.S. at 765, Faragher, 524 U.S. at 807.

91. Savino v. C.P. Hall Co., 199 F.3d 925, 932 (7th Cir. 1999).

92. /d. at 925.

93. Id



684 INDIANA LAW REVIEW [Vol. 34:675

at least reduce damages and may allow the employer to avoid liability
altogether.

94 The only adverse action plaintiff Savino could identify after she
allegedly suffered sexual advances by her supervisor was an office relocation,
which did not represent the type of substantial detriment contemplated in
Faragher and Ellerth

95
Also, Savino's complaints were incomplete and

delayed.
96

Therefore, the court affirmed ajury verdict for the employer.
97

In Hill v. American General Finance, Inc.,
9
* the Seventh Circuit affirmed

summary judgment for the employer on a sexual and racial harassment claim.99

One issue raised on appeal was whether the employer had adequately
communicated its sexual harassment policy.

100 The company had a general
policy ofcomplying with the equal opportunity laws and a policy statement that
prohibited sexual harassment,

101 A separate memorandum outlined a complaint
procedure. A company official testified that the policies were kept in notebooks
in a "public access type place" within each branch office, and plaintiff Hill
admitted that she knew the company had a human resource group responsible for
policing employee sexual or racial harassment.

102

The panel majority found this evidence sufficient, but Judge Wood dissented,
arguing that the employer had not established its affirmative defense based upon
undisputed facts.

103
Judge Wood questioned both the adequacy of the policies

and of their distribution, observing that "[e]mployees cannot be expected to go
around opening up all sorts of unmarked binders, to see if by any chance they
might contain the company's harassment policy."

104
Therefore, Judge Wood did

not agree with the other panel members' conclusion that Hill's failure to report
the harassment was unreasonable as a matter of law.

105

In the third case dealing with the Faragher/Ellerth affirmative defense,

Johnson v. West,
106

the Seventh Circuit established who bears the burden ofproof
regarding a plaintiffs failure to report harassment.

107
Plaintiff Johnson had

waited nearly a year to report alleged acts ofharassment by her supervisor to any

high-level manager qualified to speak for the employer.
108 At her bench trial, she

unsuccessfully offered evidence ofthreats, verbal abuse, and other intimidation

94. Id.

95. See id. at 932-33, 933 n.8.

96. See/*/, at 933-34.

97. See id. at 929.

98. 218 F.3d 639 (7th Cir. 2000).

99. See id. at 645.

100. See id at 643.

101. See id. at 643-44.

102. Mat 644.
103. See id. at 646 (Wood, J., dissenting in part).

104. Id. at 647.

105. See id.

1 06. 2 1 8 F.3d 725 (7th Cir. 2000).

107. See id. at 73 1-32.

108. See id at 728, 732.



200 1 ] EMPLOYMENT LAW 685

by her supervisor, and explained that she delayed reporting his sexual advances
out of fear that she would lose herjob.

109
The court remanded for consideration

ofwhether Johnson had acted reasonably, and placed the burden on the employer

to prove that she had not.
110

C. What Is an "Adverse Employment Action "?

An actionable claim for retaliation or discrimination requires that the
plaintiff prove that he or she has suffered some adverse employment action. 111

In Ribando v. United Airlines, Inc."
2
the Seventh Circuit gave examples of

material changes that might qualify as adverse actions, including termination or

demotion accompanied by a wage or salary cut, a reduction in title, a material
benefit loss, significantly lessened job responsibilities, or other "indices that

might be unique to a particular situation."
113

Plaintiff Ribando claimed that a

letter ofconcern, placed in her personnel file after a male employee accused her

of making a harassing remark, was an adverse action as defined under Title
VII,

114
but the court held that her complaint came nowhere close to the severity

required to be actionable.
113

Similarly, as mentioned above, the Seventh Circuit

held in Savino v. C. P. Hall Co.
' 16

that being moved to another floor ofthe office
is not a tangible employment action in the Faragher/Ellerth sense,

117

The most novel claim of adverse action during the survey period arose in
Cullom v. Brown.

m
Plaintiff Cullom, a staffing specialist at a Veterans

Administration hospital, filed several EEOC discrimination complaints. 119 In an
effort to avoid further complaints, hospital management ordered Cullom'

s

supervisor to give Cullom better performance ratings than he deserved. Had
Cullom received more accurate (i.e., more critical) appraisals, he would have
been eligible for remedial programs which, he claimed, would have earned him
a promotion. His claimed adverse action, therefore, was inflated performance
ratings. He succeeded in persuading the district court, which awarded him $ 1 500

109. See id. at 727-28, 732.

1 1 0. See id. at 73 1 -32. The court also remanded for additional legal analysis on a retaliatory

discharge claim. See id. at 733.

111. See Ribando v. United Airlines, Inc., 200 F.3d 507, 510 (7th Cir. 1999) (citations

omitted).

112. Mat 507.
113. Id. at 51 1 (quoting Crady v. Liberty Nat'l Bank & Trust Co. of Ind., 993 F.2d 132, 136

(7th Cir. 1993)).

114. See id at 509.

1 15. See id. at 509, 511 (citing Smart v. Ball St. Univ., 89 F.3d 437, 441 (7th Cir. 1996)

(holding negative performance appraisals, standing alone, are not actionable adverse actions)).

1 16. 199 F.3d 925 (7th Cir. 1999).

117. See id at 933.

1 18. 209 F.3d 1035 (7th Cir. 2000).

119. See id at 1037.



686 INDIANA LAW REVIEW [Vol. 34:675

damages plus fees and costs.
120

Although the Seventh Circuit did not condone the hospital's "poor and even
dishonest policy,"

121
it disagreed that Cullom suffered actionable retaliation,

stating that "while Title VII prevents employers from punishing their employees
for complaining about discrimination, it does not prevent an employer from
unjustifiably rewarding an employee to avoid a discrimination claim."122 Overly
positive performance ratings and failure to impose probation and remedial

training are not adverse.
1231

Although failure to promote is an adverse action, the

district court erred in concluding that Cullom proved that had he been put on
probation, he would have been promoted sooner. Given Cullom 's performance
history, the Seventh Circuit found no evidence that he would have successfully
completed the remedial program.

124
Even if he had, he would only have been

qualified to continue in his former position, not to advance to a position requiring

greater skills.
125 The court concluded that "[a]s a policy matter, the VA's

behavior is indefensible But, Title VII liability does not turn on ill-advised

personnel decisions."
126

The Seventh Circuit recognized in Simpson v. Borg-Warner Automotive,
Inc.

ni
that constructive demotion, like constructive discharge, may be an adverse

action, although the plaintiffs claim did not succeed.
128

Plaintiff Simpson, a

manufacturing supervisor, sought and received a downgrade to a production line
position.

129
She claimed that her supervisor had made her working environment

intolerable because ofher sex, which forced her to seek demotion, although the

employer pointed out that it had offered her a transfer to a different supervisory

position away from the offending supervisor. 130

The court noted that constructive demotion analysis is similar to constructive
discharge analysis: the plaintiff must prove that unlawful discrimination made
his or her working conditions so intolerable that a reasonable person would have

had no choice but to resign or seek demotion.
131 One difference is that a

resignation removes one from the unbearable situation completely, while a

demoted employee who remains in proximity to the offensive work conditions
might have difficulty characterizing the situation as truly intolerable.

132

Applying this analysis, the court found only two of Simpson's numerous

120. See id.

121. Id.

122. Id at 1041 (citing 42 U.S.C. § 2000e-3(a) (1994)).

123. See id.

124. See id at 1043.

125. See id. at 1044.

126. Id. (citation omitted).

127. 196 F.3d 873 (7th Cir. 1999).

128. See id. at 876.

129. Seek/, at 874.

130. See id. at 876.

131. See id. at 876-77.

132. See id. at 876.



200 1 ] EMPLOYMENT LAW 687

complaints persuasive.
133 The first was her supervisor's delay in terminating an

employee who threatened Simpson; the second was an order, later rescinded, that
Simpson take a basic skills test.

134
Because these claims did not constitute

intolerable working conditions, Simpson's demotion was not an adverse
employment action.

135
Accordingly, the Seventh Circuit affirmed summary

judgment for the employer.
136

In Stockett v. Muncie Indiana Transit System™
7
the court again found an

employment action potentially adverse although, as in Simpson, the plaintiff
failed to prove his case.

138 The Transit System received an anonymous report
that Stockett, a bus driver, was seen smoking crack cocaine. 139 A supervisor
trained to recognize signs ofdrug or alcohol influence observed Stockett during

a meeting called to investigate a complaint of sexual harassment and noted

Stockett' s red eyes and uncharacteristically calm demeanor.
140

Management
ordered Stockett to undergo drug testing in accordance with company policy and
terminated him based on the test's positive result. Stockett claimed racial
discrimination, pointing to a white employee who, he alleged, received more
favorable treatment.

141

The court acknowledged that employment conditions designed to harass and
humiliate based on race are actionable adverse employment actions. 142 In
particular, a drug test can be a "'badge ofshame.'"

143
Therefore, ifa drug test is

not administered in a routine fashion following standard and legitimate employer

practices, an order to submit to such a test may be actionable. 144 Here, however,
the employer applied its policy evenhandedly.

145
The white employee, cited as

receiving more favorable treatment, was observed by a trained supervisor, as was
Stockett, but in the white employee's case that supervisor saw no signs of drug
use to justify ordering a drug test.

146
Therefore, Stockett failed to make out a

prima facie case of racial discrimination.
147

The requirement of an adverse employment action applies in other statutes
as well as Title VII, including the Age Discrimination in Employment Act

133. See id at 877.

134. See id. at 877-78.

135. See id. at 878.

136. See id.

137. 221 F.3d 997 (7th Cir. 2000).

138. See id at 1002-03.

139. See id. at 999.

140. See id at 999-1000.

141. See i<£ at 1000.

142. See id. at 1001.

143. Id. at 1001 (quoting Vernonia Sch. Dist. 47J v. Acton, 515 U.S. 646, 663 (1995)).

144. See id. at 1001-02.

145. See id. at 1002.

146. See id

147. See id at 1002-03.



688 INDIANA LAW REVIEW [Vol. 34:675

(ADEA)148 and the Americans with Disabilities Act (ADA). 149 In Hunt v. City
of Markham,

150
the plaintiffs asserted an age discrimination claim under the

ADEA and a race discrimination claim under the Civil Rights Act of 1866. 151
The court held that both statutes require proofofan adverse employment action,
which in this case was the denial of a pay raise. 152 The Seventh Circuit had
previously held that denial of a bonus was not an adverse action, at least not
under Title VII.

153 However, the court distinguished raises, which are customary
for satisfactory workers, from bonuses, which are entirely discretionary and

sporadic.
!54

It noted that raises are necessary to enable real wages to keep up
with inflation, and concluded that the denial ofa raise is more likely than denial
of a bonus to reflect impermissible motivation.

1SS

D. Standingfor Employment Testers

Kyles v. J.K. Guardian Security Services, Inc.
156

is a significant decision

establishing that, in the Seventh Circuit, employment "testers" have standing to
bring suit under Title VII.'

57
The African-American plaintiffs, Kyra Kyles and

Lolita Pierce, worked for the Chicago Legal Assistance Foundation and applied
for a receptionist position with the defendant.

1SS
Although each of their white

counterparts received ajob offer, neither made it past the first interview. 159 They
sued under both Title VII and Section 1 ofthe Civil Rights Act of 1866.

160
The

district court entered summary judgment for the employer on both claims,
holding that testers lack standing because they have no genuine interest in

employment.
161

The Seventh Circuit looked to housing discrimination law for guidance,
recognizing that Title VIII ofthe Fair Housing Act

162
is functionally equivalent

to Title VII and that "the provisions of these two statutes are given like

148. See 29 U.S.C. § 621 (2000).

149. See 42 U.S.C. § 12101 (2000).

150. 219 F.3d 649 (7th Cir. 2000).

151. See id at 653.

152. See id at 653-54.

153. See id at 654 (citing Miller v. Am. Fam. Mut. Ins. Co., 203 F.3d 997, 1006 (7th Cir.

2000)).

154. See id.

155. See id at 654.

1 56. 222 F.3d 289 (7th Cir. 2000).

157. See id. at 292. As the court explained, a "tester** in the employment context is "an

individual who, without the intent to accept an offer of employment, poses as a job applicant in

order to gather evidence of discriminatory hiring practices.** Id.

158. See /Wat 291-92.

159. See id. at 292.

160. See id. (citing 42 U.S.C. § 1981 (2000)).

161. See id

162. See 42 U.S.C. § 3601 (The Civil Rights Act of 1968).



200 1 ] EMPLOYMENT LAW 689

construction and application."
163 The U.S. Supreme Court has held that

regardless of the intent behind a housing availability inquiry, any person given

false information has standing to sue.
164 The Seventh Circuit later applied the

same logic to a claim of racial steering in housing and held that the testers had
standing.

165

The Seventh Circuit recognized that the statutory language differs between
Title VII and the Fair Housing Act.

166
The Fair Housing Act makes it unlawful

"[t]o represent to any person because of race, color, religion, sex, handicap,

familial status, or national origin that any dwelling is not available for inspection,

sale, or rental when such dwelling is in fact so available."167 Title VII has no
comparable provision.

168
However, both statutes are broadly directed toward

prohibiting discrimination, both authorize individuals to act as "private attorneys

general" to enforce the prohibitions, and both reflect a congressional intent to

confer the broadest possible standing under Article III ofthe U.S. Constitution.
169

Judge Rovner, writing for a unanimous panel, looked to the Title VII

language making it unlawful "to limit, segregate, or classify . . . employees or
applicants in any way which would deprive or tend to deprive any individual of
employment opportunities orotherwise adversely affect his status as an employee

. . . because of such individual's race . . .
",70 A job applicant who is turned

away based on race has suffered the exact injury described in the statute, even if
the only harm suffered is the statutory violation.

171
Also, a strong public interest

underlies Title VII's prohibitions, and testers advance that interest by providing

convincing evidence that would otherwise be difficult to obtain.
172

Although the Seventh Circuit found standing for testers in Title VII suits, it

reached a different conclusion concerning the Civil Rights Act of 1866, which

prohibits discrimination on the basis of race in the making and enforcement of

private and public contracts.
173

Because the testers had no intention to enter into

a contract of employment, they suffered no injury within the scope of that
statute.

174

The Kyles decision gives legal force to a position taken by the EEOC since
1990,

175
and provides organizations that wage war against employment

163. Kyles, 222 F.3d at 295.

164. See id. at 296 (citing Havens Realty Corp. v. Coleman, 455 U.S. 363, 373-74 (1982)).

165. See Kyles, 222 F.3d at 296-97 (citing Vill. of Bellwood v. Dwivedi, 895 F.2d 1521 (7th

Cir. 1990)).

166. See id. at 297.

167. 42 U.S.C. § 3604(d) (2000).

168. See Kyles, 222 F.3d at 297.

169. Id. at 297 (citation omitted).

170. Id. at 298 (quoting 42 U.S.C. § 2000e-2(aX2) (2000)).

171. See id.

172. See id. at 298-99.

173. See id. at 301 (citing Runyon v. McCrary, 427 U.S. 160, 168 (1976)).

174. See id. at 302.

175. See id. at 299.



690 INDIANA LAW REVIEW [Vol. 34:675

discrimination a very powerful tool. By using testers, such groups may collect
objective evidence that a decisionmaker's stated reason for rejecting a protected-

class applicant is pretextual. Employers would be well-advised to review and
standardize their job applicant screening process, document the reasons why
those hired are most qualified, and monitor to make sure that decisionmaking
criteria are being consistently applied.

E. Collective Bargaining Agreements as State-of-Mind Evidence

On September 6, 2000, the Seventh Circuit granted rehearing en banc in
Equal Employment Opportunity Commission v. Indiana Bell Telephone Co. m
This case is worth watching. The EEOC, representing several female employees
ofdefendant Ameritech, charged that employee Gary Amos committed numerous
acts of sexual harassment and that Ameritech failed to act promptly to address

the harassment.
177

Before the trial began, the district court ruled that Ameritech

could not present testimony that Amos' eventual termination was delayed due to
concerns about violating the "just cause" provision of Ameritech 's collective

bargaining agreement.
178 The district court stated in its order that "any concerns

by an employer that an arbitrator might undo the discipline it has meted out for
misconduct does not excuse taking no, or very little, action when [Title VII]
requires them [sic] to act promptly to halt any violations of its provisions."

179

The jury awarded a total of $1,050,000 in punitive damages, which the court
reduced to $635,000.

180

A divided Seventh Circuit panel initially held that the district court erred in
refusing to allow the evidence regarding the collective bargaining agreement.

181

The majority noted that a plaintiff seeking punitive damages must prove that the
defendant employer acted with malice or reckless indifference to the employee's

federally protected rights.
182

Obligations under Title VII do not always trump

labor agreement obligations; for example, an employer need not violate a

bargained-for seniority system to accommodate religious observance. 183

Therefore, evidence of the union agreement was factually relevant to state of
mind, and was not irrelevant as a matter oflaw.

184
Furthermore, the error was not

harmless, because it prevented Ameritech decisionmakers from testifying

completely about the reasons for the timing of Amos' termination. 185 The size

176. 214 F.3d 813 (7th Cir. 2000), vacated andreh 'gen banc granted by No. 99-1 155, 2000

U.S. App. LEXIS 22797 (7th Cir. Sept. 6, 2000).

177. See id. at 816.

178. See id. at 819.

179. Id

180. See id. at 820.

181. See id. at 825.

182. See id.

183. See id. at 823.

184. See id. at 824.

185. See id. at 824-25.



200 1 ] EMPLOYMENT LAW 69

1

of the punitive damages award, which vastly exceeded the $15,000 jury award
for compensatory damages, further underscored the importance ofany potential

evidence on the central issue of the defendant's state of mind. 186

Judge Rovner, in dissent, agreed with District Court Judge McKinney that
an employer's duty to protect workers from harassment under Title VII should

take precedence over any conflicting collective bargaining provision.
187

After

reviewing the "pattern ofinaction in the face ofAmos' unrelenting misconduct,"
Judge Rovner acerbically observed that "Ameritech has won ... the right to
invoke the collective bargaining agreement as an excuse for sitting on its hands
while Amos kept on terrorizing his female colleagues."188

The Seventh Circuit's ultimate determination will interest employers who are
caught between the rock ofa collective bargaining agreement and the hard place

of potential liability for sexual harassment under Title VII. Regardless of the

outcome, it should create an increased sense ofurgency for employers faced with

sexual harassment complaints. When Ameritech finally decided that Amos
should be punished for one ofhis harassing episodes, the thirty-day disciplinary

action period specified in the union agreement had expired. Ameritech therefore

deferred any discipline out of concern that any action against Amos would be
grieved by the union and eventually be reversed by an arbitrator.

189
Even if

Ameritech ultimately succeeds in getting the punitive damage award reversed,
the delay that created the dilemma between statutory and contractual obligations
has undoubtedly generated substantial business costs in the form oflitigation fees

and expenses and lost managerial time.

IV. The Americans with Disabilities Act

In 1992, the EEOC began enforcing the Americans With Disabilities Act
(ADA). 190 Within one year, disability charges accounted for seventeen percent
of all EEOC charges processed. By fiscal year 2000, that figure rose to twenty
percent.

191 The voluminous claim activity gave the Seventh Circuit the
opportunity to address a variety ofADA issues during the survey period.

A. Hostile Environment Claims and the ADA

One notable, although unsurprising, development was in Silk v. City of
Chicago}

92
In Silk, the Seventh Circuit edged closer to acknowledging the

viability ofhostile environment claims under the ADA. However, the plaintiffs
evidence was insufficient to survive summary judgment, and the court stopped
short of affirmatively recognizing the cause of action and instead assumed

186. See id. at 825.

1 87. See id. at 826 (Rovner, J., concurring in part and dissenting in part).

188. Id

189. See id. at 825.

1 90. See Charge Statistics, supra note 20.

191. See id.

192. 194 F.3d 788 (7th Cir. 1999).



692 INDIANA LAW REVIEW [Vol. 34:675

without deciding that such a claim is cognizable.
193

In Silk, a Chicago police officer developed sleep apnea, which the police
department accommodated by allowing Silk to work only the day shift. 194

Following a Title VH-type approach, the Seventh Circuit required Silk to
"demonstrate that a rational trier of fact could find that his workplace is
permeated with discriminatory conduct—intimidation, ridicule, insult—that is
sufficiently severe or pervasive to alter the conditions of his employment."195

That degree of abusiveness is assessed from both an objective and subjective

viewpoint.
196

Silk failed to show that the examples ofharassment he cited (such as an order
to go home to get regulation footwear for an inspection, unreported but public
taunts that Silk was a "medical abuser" and a "limited duty phony," and an
unreported threat made by a known joker to bomb Silk's car)197 rose to the level
of a hostile environment.

198
Also, the only adverse employment action Silk

proved was an order that he stop teaching an evening college class, pursuant to
a departmental rule prohibiting officers on limited duty from working any second
job inconsistent with the restrictions requiring limited duty.

199 The court found
that this action was neither harassment nor retaliation based upon Silk's
disability, and affirmed summary judgment for the department.200

Although the Seventh Circuit still has not formally recognized a cause of
action for hostile environment harassment underthe ADA, it edged toward doing
so in Silk by delineating the above standards for analyzing such claims. Indiana

employers should therefore expect to see more ADA hostile environment claims
asserted. Employers must make sure that their staff members treat disabled
workers with respect, or risk liability. Attorneys working with disabled plaintiffs

should consider whether their clients suffered harassment and, if so, should

proceed in the same manner as when dealing with a charge ofharassment based
on race or sex.

B. Perceived Disabilities

In last year's survey issue, the most significant employment development
reported was the U.S. Supreme Court's ruling that, in determining whether a
person has a disability under the ADA, mitigating measures must be
considered.

201 The Court held that a person who is not substantially limited in

193. See id at 803-04.

194. See id at 795.

195. Mat 804.
196. See id at 805.

197. Id. at 796.

198. See id. at 807.

199. See id. at 806 n. 17.

200. See id. at 794, 806, 808.

201

.

See Murphy v. United Parcel Serv., 527 U.S. 516, 521 (1999); Sutton v. United AirLines,

Inc., 527 U.S. 471, 475 (1999).



200 1 ] EMPLOYMENT LAW 693

any major life activity when using a mitigating measure such as medication,
corrective lenses, a prosthesis, or a hearing aid is not generally entitled to ADA
protection.

202
For example, a nearsighted person who can see normally when

using eyeglasses or contact lenses has no cause ofaction under the ADA merely
because he or she is terminated because of the nearsightedness.

203
These

decisions went against the EEOC's statutory interpretation and greatly reduced
the number of viable ADA claimants.

The ADA is not, however, limited to people with actual disabilities. It also
covers those with a record of a qualified impairment, or who are regarded by
their employers as having a qualified impairment.

204
Persons who can no longer

directly claim a covered disability may therefore argue that, although they did not
have a condition that (as mitigated) limited them in a major life activity, their

employers regarded them as having such a limiting disability. Ifsuccessful, such

plaintiffs qualify as disabled under the ADA.205 The Seventh Circuit dealt with
several such claims during the survey period, with summary judgment for the
employer on the ADA claim affirmed in each case discussed below.206

In Gorbitz v. Corvilla, Inc.,
207

the plaintiff, an accounting manager at a not-

for-profit agency, suffered head and neck injuries in an automobile accident.
208

This resulted in frequent absences from her job to visit doctors and physical

therapists.
209 Her employer's initial tolerance eventually wore thin, and she was

asked to schedule appointments after 3:30 p.m. and to provide a weekly list of

her medical appointments to the agency executive director.
210

After the agency

terminated her for attitude problems, she filed an ADA claim, arguing that
because agency management knew about the numerous medical appointments,
she was regarded as disabled.211

The Seventh Circuit disagreed, stating that "it is well known that medical
appointments, in and of themselves, do not signal the existence of a disability;

doctors frequently prescribe physical therapy for those without any substantial

limitations in a major life activity that rise to the level ofa disability."
212

Gorbitz

offered only speculation that agency management regarded her as disabled,
which was not enough to raise a genuine issue of fact.213

202. See Sutton, 527 U.S. at 488.

203. See id. at 488-89.

204. See 42 U.S.C. § 12102(2) (2000).

205. See Sutton, 527 U.S. at 489.

206. See Moore v. J.B. Hunt Transp., Inc., 221 F.3d 944, 947 (7th Cir. 2000); Wright v. 111.

Dep't of Corr., 204 F.3d 727, 728 (7th Cir. 2000); Krocka v. City of Chicago, 203 F.3d 507, 510

(7th Cir. 2000); Gorbitz v. Corvilla, Inc., 196 F.3d 879, 880 (7th Cir. 1999).

207. 196F.3dat879.

208. See id at 880.

209. See id

210. See id, at 880-8 1.

211. See id. at 881.

212. Id. at 882.

213. See id.



694 INDIANA LAW REVIEW [Vol. 34:675

In Krocka v. City ofChicago™ a police department learned that Krocka, a
veteran officer, was taking Prozac to alleviate depression.215 The department
ordered a physical and psychological evaluation to assess Krocka's continued
fitness for duty, which revealed that Krocka exhibited neither symptoms of
psychological illness nor side effects of the medication. Krocka returned to his
regular duties subject to participation in the department's "Personnel Concerns

Program" that included ongoing monitoring and, on one occasion, a test to
measure the Prozac level in Krocka's blood.

216

The district court concluded that, although Krocka suffered the impairment
of severe depression, he was not substantially limited in any major life activity
in his medicated state and was therefore not disabled under the ADA.217 In its
"regarded as" analysis, the Seventh Circuit distinguished between two types of
claims.

218 An employer may erroneously believe that the employee has a
substantially limiting impairment when the employee possesses no such
impairment.

219
This was not Krocka's case, because he did in fact suffer from

severe depression.
220

Or, as in Krocka's case, an employer may erroneously
believe that an impairment is substantially limiting, when it is not.221

In support of his "regarded as" claim, Krocka argued that the medical
evaluation and ongoing monitoring violated the ADA. The Seventh Circuit
accepted that the monitoring was an adverse action, but focused on the fact that
the department allowed Krocka to carry on his responsibilities without weapon-
carrying or any other restrictions. Because Krocka performed all his regular

duties, the court concluded, the department could not have regarded Krocka as

substantially limited, despite his medicated state.
222

Furthermore, the medical

evaluation and monitoring requirement was reasonable, especially given the

significant safety concerns ofpolice work, because it allowed the department to

avoid uninformed assumptions regarding Krocka's fitness for duty.
223

Plaintiff Wright, in Wright v. Illinois Department of Corrections™ was
equally unsuccessful in asserting a "regarded as" claim.

225
Wright disclosed on

his application for a prison guard position that he was a veteran with a service-
related disability (an ankle injury that occurred during a volleyball game while
he was serving in the Marine Corps).226 Although Wright told his interviewer

214. 203 F.3d 507 (7th Cir. 2000).

215. See id. at 511.

216. Id.

217. See id. at 513.

218. Mat 513-14.
219. See id

220. See id. at 514.

221. See id.

222. See id.

223. See id. at 515.

224. 204 F.3d 727 (7th Cir. 2000).

225. See id. at 732-33.

226. Seeid.dXl2Z&.n.\.



200 1 ] EMPLOYMENT LAW 695

that he could not run long distances, he passed a physical agility test and received
ajob offer. After he was hired, Wright learned in an orientation meeting that the
correction officers' training academy included marching exercises. He
announced that he could not participate, and the department withdrew his job
offer.

227
After his state representative intervened, the department agreed to have

a physician evaluate Wright's physical ability to do the job. However, when
Wright arrived late for his appointment, it was canceled and never rescheduled.228

Although the department answered affirmatively to an interrogatory asking

"whether Defendant considered Plaintiff to be disabled," a divided Seventh

Circuit panel looked to the underlying circumstances.
229 The majority found that

the department considered Wright qualified until Wright himself raised a doubt

by indicating that he could not perform a required training exercise. The
department first accepted Wright's word that he could not complete the task but
then agreed to get a medical opinion after Wright asserted that he was physically
qualified for the job itself. The court characterized the department's actions as
a permissible effort to ascertain Wright's physical limitations rather than as

regarding Wright as substantially impaired in a major life activity such as

walking or caring for himself. Although the employer admittedly (and correctly)

perceived Wright as unable to run long distances or to march, it did not regard

him as substantially limited in ways contemplated by the ADA.230

The Seventh Circuit reached a similar conclusion in Moore v. J.B. Hunt
Transport, Inc.

231 Moore suffered from rheumatoid arthritis, which caused him
to move more slowly than most people. He obtained employment as a truck
driver training instructor, and was assigned to ride along with students on public
roadways and to stand outside trucks in an outdoor training area and direct

student maneuvers such as backing and turning. Both the jolts and vibrations

from riding with inexperienced drivers and cold, damp weather conditions
aggravated Moore's condition. He requested reassignment as a classroom
instructor but was denied that position because he was not the most qualified
candidate. Moore lost his position and later found work elsewhere as a charter
coach bus driver.

232

Neither Moore's sensitivity to cold and damp weather nor the possibility of
disabling but infrequent arthritis flare-ups foreclosed him from a wide range of
positions for which he was qualified. Therefore, the Seventh Circuit concluded
that Moore did not qualify as disabled under the ADA. Moore also could not
prove that his employer regarded him as unqualified for a wide range ofjobs;

only that it regarded him as unqualified for two specific types of driver

instruction.
233

227. See id.

228. See id

229. Id. at 731.

230. See id. at 732-33.

231. 221 F.3d 944 (7th Cir. 2000)

232. See id. at 948-49.

233. See id. at 952-53.



696 INDIANA LAW REVIEW [Vol. 34:675

C. Substantial Limitation

As explained above, an ADA claimant must prove that her disability
substantially limits her in some major life activity.234 During the survey period,
the Seventh Circuit rejected claims of substantial limitation in two cases. In
Schneiker v. Fortis Insurance Co.,

235
the plaintiff suffered from depression and

alcoholism, which were exacerbated when she worked under a particular
supervisor. During a temporary reassignment under another supervisor,

Schneiker' s performance and ability to cope with her work situation improved.
Fortis, Schneiker's employer, gave the plaintiff opportunities to interview for

permanent positions in other departments, with special concessions such as

exempting her from a restriction against pursuing more than one transfer
opportunity at a time. Fortis also offered her a transfer to a position with lower

pay but strong growth potential, which she refused.
236

Schneiker claimed disability discrimination after she was terminated.
237

The
Seventh Circuit, reaffirming prior holdings,

238
found that the record showed only

that Schneiker's conditions impaired her ability to work with one particular
supervisor.

239
However, such personality conflicts, even those serious enough to

trigger depression, do not establish disability if the employee could perform the

job under alternative supervision. Therefore, the court affirmed summary
judgment for Fortis.

240

In Sinkler v. Midwest Property Management Ltd. Partnership™ a regional
sales manager suffered panic attacks when she drove a car anywhere beyond her
home city of Kenosha, Wisconsin.242 She claimed that she was fired because of
her phobia, which substantially limited her ability to work, and that her employer

failed to offer her a reasonable accommodation, such as approval to travel by air

or train to out-of-town work assignments.
243 The Seventh Circuit agreed with

the district court's ruling that despite Sinkler's phobia, she was still able to hold
a broad range of other jobs.

244
The circuit court reasoned that although sales

234. Alternatively, the claimant may show that she was regarded as having an impairment that

substantially limited a major life activity, or that she had a record of an impairment that

substantially limited a major life activity. See 42 U.S.C. § 12102(2) (2000).

235. 200 F.3d 1055 (7th Cir. 2000).

236. See id. at 1058.

237. See id. at 1059.

238. See Weiler v. Household Fin. Corp., 101 F.3d 519 (7th Cir. 1996); see also Palmer v.

Circuit Court of Cook County, 1 17 F.3d 351 (7th Cir. 1997).

239. See Schneiker, 200 F.3d at 1061.

240. See id. at 1062.

24 1

.

209 F.3d 678 (7th Cir. 2000).

242. See id. at 681.

243. See id. at 682, 685.

244. See id. at 685. In fact, Sinkler was employed in the Kenosha area for thirty years before

she began work at Midwest. She found work at Sears after her termination from Midwest. See id.



200 1 ] EMPLOYMENT LAW 697

positions often require out-of-town travel, many such jobs required driving only
in the Kenosha area. Moreover, other positions accessible by public transit or
car-pool were available in the Chicago and Milwaukee metropolitan areas.245

Therefore, the Seventh Circuit again affirmed summary judgment for the
employer.

246

D. Failure to Accommodate

Once an ADA plaintiff gets over the hurdle of proving a disability that
substantially limits her in a major life activity, one form ofclaim she may bring
is that her employer failed to reasonably accommodate that disability. The
plaintiff in Vollmert v. Wisconsin Department ofTransportation

1
asserted such

a claim. Vollmert, who suffered from a learning disability and dyslexia, had
been employed for twenty-one years by the Wisconsin Department of
Transportation, where she processed applications for special license plates.
When the department implemented a new computer system, Vollmert had
difficulty becoming proficient with the system, although she received classroom

and some individual instruction. She repeatedly asked basic questions, which
trainers discouraged by telling her to refer to her notes. Subsequently, she fell

behind in productivity.
248

Vollmert filed suit under the ADA afterthe department
laterally transferred her to a position that limited her promotional

opportunities.
249

The district court dismissed the suit, holding that Vollmert failed to show
that she could perform the essential job functions, even with accommodation.

250

The Seventh Circuit disagreed, giving greater credence to a rehabilitation expert
report that Vollmert offered.

251
This report concluded that Vollmert could have

become proficient in the processing position had she been given training
appropriate for her disability.

252 The expert had based his opinion on Vollmert'

s

narrative account, education, prior work experience, and aptitude tests. His
report stated the facts supporting his conclusions.

253 He opined that Vollmert'

s

learning was hindered by a variety of factors, including: the fact that she was
still working under the old system while trying to learn the new one; her one-on-
one training only totaled about four hours; the complex written training manual

was not well-suited to her learning disabilities; and she needed the opportunity

at 685-86.

245. See id. at 686.

246. See id. at 687.

247. 197 F.3d 293 (7th Cir. 1999).

248. See id. at 296.

249. See id. at 295-96.

250. See id. at 297-98.

251. See id. at 298-300.

252. See id. at 299.

253. See id. at 300. In other comparable cases, the Seventh Circuit has rejected reports that

state only "naked conclusions." Id. at 298 (citations omitted).



698 INDIANA LAW REVIEW [Vol. 34:675

to ask repetitive questions to successfully assimilate the information.
254

Because the expert report created a genuine issue of fact as to whether
Vollmert could learn the new system with proper training, Vollmert's transfer to
a position with lesser advancement potential was not a reasonable
accommodation as a matter of law. Moreover, Vollmert had requested a special
tutor, and although one was likely available through another agency at no charge,
the department failed to provide training geared toward Vollmert's disability.

Based upon these findings court remanded the case for trial. 255

The plaintiff in Rehling v. City ofChicago
256 was less successful. EEOC

regulations recommend, although the ADA statute does not require, that
employers engage in an "interactive process" with disabled persons to agree upon

a reasonable accommodation.
257

Police Officer Rehling lost part of a leg as a
result of an automobile accident and, after extended medical leave, asked to

return to work on limited duty status in his former district. However, that district
had no desk jobs available. The police department offered Rehling a
reassignment to another unit, which Rehling declined because oftransportation

concerns, although he did not challenge the suitability of that position in his

response to the employer's summary judgment motion.258 The Seventh Circuit
affirmed partial summary judgment for the employer because Rehling failed to
show that any desk position was available in his old district, and because "a
plaintiffcannot base a reasonable accommodation claim solely on the allegation

that the employer failed to engage in an interactive process."
259

E. Other ADA Issues

Two survey period cases offer guidance on the issue ofdamages. In the first,
Gile v. UnitedAirlines, Inc.,

260
the Seventh Circuit reversed an award ofpunitive

damages in a failure-to-accommodate claim.
261

Gile, whose psychological
disability was exacerbated by working nights, asked repeatedly but
unsuccessfully for a shift change.

262 A jury awarded her $200,000 in
compensatory damages and $500,000 in punitive damages, which the court

reduced to $300,000 as required under 42 U.S.C. § 1981a(b)(3).
263

Under the

ADA, punitive damages require a "discriminatory practice . . . with malice or
reckless indifference to the federally protected rights of an aggrieved

254. See id. at 301.

255. See id. at 302.

256. 207 F.3d 1009 (7th Cir. 2000).

257. Id. at 1015 (citing 29 C.F.R. § 1630.2(O)(3) (2001)).

258. See id. at 1012-13, 1016-17.

259. Id. at 1016.

260. 2 1 3 F.3d 365 (7th Cir. 2000).

261. See id. at 376.

262. See id. at 369-70.

263. See id. at 371.



200 1 ] EMPLOYMENT LAW 699

individual."
264 The U.S. Supreme Court held in 1999 that "malice or reckless

indifference" depends on the "employer's knowledge that it may be acting in
violation of federal law," rather than the egregiousness of the employer's
misconduct.

265
Here, United refused to accommodate Gile because it mistakenly

believed, based on a medical director's assessment, that Gile suffered no
disability.

266
Such refusal was negligent but not, according to the panel majority,

a sufficiently reckless state of mind to justify punitive damages.267

Pals v. Schepel Buick & GMC Truck, Inc. 262 presents a cautionary tale for
defense counsel. A used-car manager with muscular dystrophy sued for
disability discrimination, requesting back wages, future wages, and mental

distress.
269 He won a lump-sum compensatory damages jury award of

$1,050,000.
270 On appeal, the employer argued that 42 U.S.C. 1981a(b)(3),

which limits ADA damages to $300,000 for the largest employers, limited
Schepel's exposure to $100,000 based on its staff size.

271
However, the Seventh

Circuit determined that the ADA damage cap does not apply to back pay or front
pay.

272
Because the jury used a general verdict form, and the employer's

attorneys failed to ask for a breakdown ofdamages, the court could not ascertain
whether the award included more than $100,000 for Pals' mental distress.273

Furthermore, the court held that front and back pay are equitable remedies to be

decided by the judge under both Title VII and the ADA, and because neither
party objected, both impliedly consented to thejury determination.

274
In the end,

Pals retained the entire jury award.
275 The important lesson of this case is that

defense counsel must insist on an itemization of Title VII or ADAjury awards,
or risk losing the benefit of the cap on certain types of damages.

Another issue that the Seventh Circuit clarified was the interplay between the
ADA and claims for Social Security disability benefits. In Cleveland v. Policy
Management Systems Corp.,276 the U.S. Supreme Court held that application for
or receipt of Social Security Disability Insurance (SSDI) benefits does not

automatically estop a recipient from pursuing an ADA claim, as long as the
plaintiff adequately explains the apparent inconsistency.

277

264. Id. at 375 (citing 42 U.S.C. § 1981a(bXl) (2000)).

265. Id.

266. See id. at 375-76.

267. See id. at 376.

268. 220 F.3d 495 (7th Cir. 2000).

269. See id. at 497,499.

270. See id. at 499.

271. See id; 42 U.S.C. § 1981a(bX3) (2000).

272. See Pals, 220 F.3d at 499.

273. See id. at 500.

274. See id at 500-01.

275. See id. at 501.

276. 526 U.S. 795 (1999).

277. See id. at 797-98. The ADA requires the plaintiffto prove that he or she can perform the
essential functions of the position at issue, with or without a reasonable accommodation, which is



700 INDIANA LAW REVIEW [Vol. 34:675

In Feldman v. American Memorial Life Insurance Co.,
278

the plaintiff

incurred a work-related injury and filed for SSDI benefits, stating that she was
"completely and totally disabled and [could not] perform any substantial gainful
employment."

279
The Seventh Circuit reviewed various possiblejustifications for

treating SSDI representations and ADA claims differently, such as a lapse oftime
between the SSDI application and ADA claim, during which the disability
abated.

280
Here, however, none of these justifications applied. Therefore, the

Seventh Circuit affirmed summary judgment for the employer, finding that
Feldman had made contradictory and unreconciled assertions and that it would
not "permit litigants to adopt an alternate story each time it advantages them to
change the facts."

281
Because Feldman offered no direct explanation for the

seeming contradiction, the court refused to assume that it could be resolved.282

A final holding came in Equal Employment Opportunity Commission v.
Humiston-Keeling, /wc.,

283
in which the Seventh Circuit rejected an EEOC

argument and affirmed summary judgment for the employer.284 The plaintiff, a
warehouse "picker," developed tennis elbow and could no longer do the lifting
required in herjob. She applied for several vacant internal clerical positions for

which she was minimally qualified, but in each case was passed over for a more
qualified applicant.

285
The EEOC argued that "reasonable accommodation"

under the ADA required the employer to advance the plaintiff over a more
qualified nondisabled person unless doing so presented provable "undue

hardship."
286

Judge Posner, writing for a unanimous panel, disagreed, noting that such a
requirement could have perverse results, such as forcing an employer to give one

disabled candidate preference over a more seriously disabled candidate, or to
give preference to a white male disabled candidate over a more qualified female
minority candidate.

287 The ADA, Judge Posner stated, does not require such
"affirmative action with a vengeance."

288
While the Act does not allow an

employer to reject the best-qualified applicant based on disability, it similarly

does not require the hiring of a qualified but inferior candidate based on

at apparent odds with the incapacity claim required for Social Security disability benefits. See id.

at 802; Albertson's, Inc. v. Kirkinburg, 527 U.S. 555, 578-79 (1999) (quoting 42 U.S.C. §

12111(8)).

278. 196 F.3d 783 (7th Cir. 1999).

279. Id. at 786-88.

280. See id. at 790-91.

281. Wat 791.
282. See id. at 792.

283. 227 F.3d 1024 (7th Cir. 2000).

284. See id. at 1025, 1029.

285. See id. at 1026-27.

286. Id. at 1027.

287. See id.

288. Id. at 1029.



200 1 ] EMPLOYMENT LAW 70

1

disability.
289

Furthermore, Judge Posner noted that in most cases a transfer from
a warehousejob to a less physically strenuous office job is usually a promotion,

and even the EEOC acknowledges that the ADA does not require promotion as
a reasonable accommodation.

290

V. The Age Discrimination in Employment Act

When an employer lays employees off in a workforce reduction ("RIF," for
Reduction In Force), age discrimination actions often arise. During the survey

period the Seventh Circuit addressed several RIF cases. In Cullen v. Olin
Corp.

291
the Seventh Circuit reversed a jury award totaling $850,000 and

remanded for a new trial because the trial court abused its discretion in allowing
evidence that an employee who assumed part of a RIF victim's job
responsibilities failed to perform those duties satisfactorily thereafter.

292 The
circuit court held that this evidence was irrelevant because it had no bearing on
management's state of mind at the time it decided to terminate Cullen.293

The facts and holding ofMichas v. Health Cost Controls ofIllinois, Inc.
294

are unremarkable, but the court's review of the proof required in age

discrimination claims involving RIFs is worth noting. A true RIF involves
permanent elimination of certain positions.

293 The basic McDonnell Douglas
approach to establishing a claim of intentional discrimination requires the

plaintiff to prove that she belongs to a protected class, that she met reasonable

performance expectations, that she suffered adverse employment action such as
termination, and that her position remained open or was filled by someone not
a member of the protected class.296 In a RIF, a discrimination victim may be
unable to prove the last element. Therefore, in the alternative, she must prove

that similarly situated non-protected-class members received more favorable
treatment. In making an age discrimination claim, she must show that she was
similarly situated to younger employees who were retained.297

When a single employee is discharged and her responsibilities are absorbed
by other employees so that the position is not filled, the Seventh Circuit has

dubbed the action a "mini-RIF."
298 An employee with a unique position could

not prevail under the basic RIF test, because she could not point to any other
similarly situated employee who received better treatment. Therefore, the
plaintiffmust only show that employees who were not members ofthe protected

289. See id. at 1028-29.

290. See id. at 1029.

291. 195 F.3d 317 (7th Cir. 1999), cert, denied, 529 U.S. 1020 (2000).

292. See id. at 319, 325.

293. See id. at 324.

294. 209 F.3d 687 (7th Cir. 2000).

295. See id. at 693.

296. See id. (citing McDonnell Douglas Corp. v. Green, 41 1 U.S. 792, 802 (1973)).

297. See id.

298. Id.



702 INDIANA LAW REVIEW [Vol. 34:675

class absorbed her duties.
299

This returns one to the basic McDonnell Douglas
analysis, because in both the RIF and mini-RIF scenarios the claimant's duties
were absorbed by at least one other employee who was either specifically hired
or previously employed, so that the plaintiff can show that a person or persons
outside the protected class assumed her duties.

300
Therefore, in ascertaining

whether to apply the basic McDonnell Douglas analysis or the alternative RIF
analysis, counsel should focus on whether the plaintiffs responsibilities were
absorbed by others, or whether they were eliminated entirely.301

The distinction described in Michas may not, however, be as clear-cut in the
application as it sounds in theory. In Michas, the court described a mini-RIF as

involving the discharge of only a single employee. However, in the earlier
Cullen case, the court applied the mini-RIF analysis when it focused on whether
and to whom any substantial portion of the claimant's responsibilities were
reassigned, even in the context of a seventy-four-person layoff.

302
Because

Michas indicates no intent to overrule Cullen, one could reasonably assume that
the mini-RIF analysis, which parallels the basic McDonnell Douglas analysis,
applies regardless of the overall extent of the workforce reduction when the
plaintiff can identify an employee or employees who assumed her former job
responsibilities.

Two post-survey period developments, both ofwhich also involve RIFs, bear
further monitoring. In Adams v. Ameritech Services Inc. ,

303
a central issue is the

admissibility of statistical evidence to show intentional age discrimination.304

The plaintiffs, who were RIF victims, proffered expert reports that examined
correlations between employees' ages and termination rates.

305 The district court
refused to admit the reports for several reasons, including unreliability of the

underlying information, lack of analysis of causation, lack of control for other

variables, and likelihood ofconfusing thejury ,
306 The Seventh Circuit remanded

the case for reconsideration, pursuant to the Daubers standard, of whether the

reports were "prepared in a reliable and statistically sound way, such that they

contained relevant evidence."
307

The court held that regression analysis is not a
requirement for admissibility, and a report may, if bolstered by other evidence,

meet the Daubert standard even if it merely eliminates the possibility that it was
pure chance that a RIF adversely affected employees protected under the ADEA
more than others.308

299. See id.

300. See id. at 693-94.

301. See id. at 694.

302. See Cullen v. Olin Corp., 195 F.3d 317, 320 (7th Cir. 1999).

303. 23 1 F.3d 414 (7th Cir. 2000).

304. See id. at 422. The court noted that the Seventh Circuit does not recognize age

discrimination claims based on disparate impact. See id.

305. See id. at 425.

306. See id. at 427.

307. Id. at 425.

308. See id. at 425, 427-28.



200 1 ] EMPLOYMENT LAW 703

On December 1 1, 2000, the EEOC issued a final regulation309 on the ADEA
"tender back" rule, addressing the U.S. Supreme Court's 1998 decision in Oubre
v. Entergy Operations, Inc.

310
The Older Workers Benefits Protection Act of

1990 (OWBPA) 3n amended the ADEA and, among other things, permitted
employees to waive their ADEA rights in return for consideration such as
increased severance or early retirement benefits. Such waivers are, however,

governed by specific OWBPA requirements, such as a requirement that the
waiver be written in understandable language.

312

Prior to the EEOC's recent regulation, an employee who entered into a
waiver agreement but thereafter sought to bring suit under the ADEA faced two
obstacles from traditional contract law. First, the "tender back" rule required an

individual who wished to challenge a waiver to first repay the consideration
received for the waiver. Second, the "ratification" principle provided that an

individual who failed to return the payment was deemed to have approved the
waiver.

313 The final EEOC rule states that neither ofthese principles applies to
ADEA waivers.314 Therefore, employees who wish to challenge the validity of
their ADEA waivers may do so without first repaying the amount received for
signing the waiver. Ifthe employee prevails in overturning the waiver, however,

and then proves age discrimination and obtains a monetary award, the employer

may be able to deduct the amount paid for the waiver in calculating the amount
owed.

315

VI. Other Federal Statutes

A. Family and Medical Leave Act

The most significant Seventh Circuit Family and Medical Leave Act(FMLA)
decision during the survey period was Dormeyer v. Comerica Bank-Illinois, 316

which overruled an EEOC regulation. PlaintiffDormeyerwas excessively absent
from her bank teller job, and after her twentieth unexcused absence in less than

ayear, the bank terminated her. Some ofDormeyer's absences occurred after she
became pregnant and requested FMLA leave, for which she was ineligible
because she had worked fewer than 1250 hours in the prior twelve months. The
bank ignored Dormeyer's request for FMLA, and Dormeyer sued underan EEOC

309. 29CF.R. § 1625.23(2001).

310. 522 U.S. 422 (1998).

311. 29 U.S.C § 626(f) (2000).

312. See id § 626(f)(l)(AHG).

313. See U.S. Equal Employment Opportunity Commission, Questions and Answers:

Final Regulation on "Tender Back" and Related Issues Concerning ADEA Waivers, at
http://www.eeoc.gov/regs/tenderback-qanda.html (last modified Dec. 11, 2000) [hereinafter

Questions and Answers].

314. See 29 C.F.R. § 1625.23(a) (2001).

3 15. See id. § 1625.23(c); see also QUESTIONS AND ANSWERS, supra note 3 13.

316. 223 F.3d 579 (7th Cir. 2000).



704 INDIANA LAW REVIEW [Vol. 34:675

regulation stating that if an employer fails to advise an employee who requests
FMLA leave ofher eligibility for the leave, the employee is deemed eligible for
leave even if she would not otherwise have qualified.317

Judge Posner, writing for a unanimous panel, held that the EEOC cannot
enact a rule that effectively cancels the FMLA's statutory eligibility
conditions.

318
Furthermore, Judge Posner found the rule unreasonable in granting

benefits to those who were never intended to receive them.319 The court also
rejected Dormeyer's claim of pregnancy discrimination, noting that although

some of her absences were related to her pregnancy, she failed to show that the
absences of nonpregnant employees were overlooked.

320

Rice v. Sunrise Express, Inc.,
221

another significant Seventh Circuit survey

period FMLA decision, examines the question ofwho bears the burden of proof
to show a legitimate business reason for a termination that occurs during an
FMLA leave. The district court instructed the jury that it was the defendant's
burden to show that the plaintiffwould have been terminated even if she had not
been on leave.

322
Finding that the defendant had not satisfied this burden, the

jury returned a verdict for plaintiff Rice.
323

The Seventh Circuit, scrutinizing the statutory language ofthe FMLA, noted
that a plaintiffs substantive rights under the act do not include entitlement to any

right or benefit to which the employee would not have been entitled, had he not

taken FMLA leave.324 The panel majority held that the employee "always bears
the ultimate burden of establishing the right to the benefit.

9'325
Rejecting the

Department of Labor's interpretation as to the allocation of the burdens, the

majority held that an employer wishing to claim that a benefit (such as

reappointment to a position held prior to a leave) would have been unavailable

regardless ofthe leave, bears only the burden ofproduction. Once the employer
has submitted evidence supporting the assertion, the employee bears the burden

ofproving, by a preponderance ofthe evidence, that she would have received the

317. See id. at 581-82.

3 1 8. See id. The court left open the possibility that the regulation might be upheld if the

plaintiff asserted detrimental reliance based on the employer's silence, and sought to estop the

employer from denying leave based on reasonable reliance and resulting harm. See id.

319. See id. at 582-83.

320. See id. at 583. In dicta, Judge Posner went on to say that although disparate impact is a

permissible liability theory under the Pregnancy Discrimination Act, Dormeyer could not prevail

on that theory either. Disparate impact applies where the employer has imposed an eligibility

requirement that is not really necessary for the job and that weighs more heavily on a protected

class such as pregnant employees. Here, attendance was a legitimate job requirement from which

the law did not require that pregnant women be excused. See id. at 583-84.

321. 209 F.3d 1008 (7th Cir.), reh 'g en banc denied by2\l F.3d 492 (7th Cir.), and cert,

denied, 121 S. Ct. 567 (2000).

322. See id. at 1016.

323. See id. at 1010.

324. See id. at 1018.

325. Id.



2001] EMPLOYMENT LAW 705

benefit absent the leave. Because the evidence in the case was close, the court
remanded for a new trial.326 Judge Evans, dissenting, pointed out the practical
difficulties this burden allocation creates for plaintiffs, given that employers

control most ofthe evidence needed to prove the point.
327

B. Equal Pay Act

Two survey period cases reiterating established doctrine deserve brief
mention. In Snider v. Belvidere Township*

2* a female deputy assessor with six

years of seniority received a forty-cent-per-hour raise that put her at the same
hourly rate as a newly hired male deputy assessor.

329
Her claim of pay

discrimination failed because she did not show that any similarly situated male,
who was doing the same work, was paid a higher wage.330

In Lang v. Kohl's Food Stores, Inc. 9
m

a group of unionized and mostly

female grocery store bakery and deli employees complained that jobs in the

produce department paid more, and that most produce workers were male.332

Because the Equal Pay Act does not require intent to discriminate, the plaintiffs

could prevail by showing unequal pay for substantially equal work.
333 The

employer successfully argued, however, that the produce positions required more
skill, responsibility, and effort. Produce workers are called upon to arrange

wares for display, decide what produce to discard or mark down, and lift heavier
merchandise. The plaintiffs Title VII claim failed as well for lack of evidence
that the employer steered women into the lower-paying positions.334

C. Employee Polygraph Protection Act

Early in the survey period, the Seventh Circuit took an expansive view ofthe

Employee Polygraph Protection Act(EPPA),
335

and in Veazey v. Communications

& Cable ofChicago, Inc.,336 ruled that an audiotape recording ofan employee's
voice may violate the EPPA's general prohibition against lie detection tests if
used in conjunction with another lie detection devise. Plaintiff Veazey was the
key suspect when one of his co-workers received an anonymous and threatening

326. See id

327. See id. at 1019 (Evans, J., dissenting); see also Rice v. Sunrise Express, Inc., 217 F.3d

492, 493 (7th Cir. 2000) (denying petition for rehearing en banc) (Wood, J., Rovner, J. and

Williams, J., dissenting with opinion).

328. 2 1 6 F.3d 6 1 6 (7th Cir. 2000).

329. See id at 614, 617.

330. See id. at 619.

331. 217 F.3d 919 (7th Cir. 2000), cert, denied, 121 S. Ct. 771 (2001).

332. See id at 922.

333. See id. at 922-23.

334. See id. at 923.

335. 29 U.S.C. §§ 2001-09 (1999).

336. 194 F.3d 850 (7th Cir. 2000).



706 INDIANA LAW REVIEW [Vol. 34:675

voicemail message.
337 As part of its investigation, the employer asked Veazey

to read a copy ofthe threatening message into a tape recorder in order to obtain
a voice exemplar. Veazey refused because he did not know how the tape might
be used and because he found the message offensive. While Veazey offered to
record a different message, he was nonetheless terminated for insubordination.338

After a fairly extensive review of the history of the lie detector,
339

the

Seventh Circuit looked to the statutory definition of"lie detector," which covers
any device used to render "a diagnostic opinion regarding the honesty or
dishonesty ofan individual."

340
Although simply comparing two voice samples

without the aid of stress analyzing equipment is not a lie detector test, the court
concluded that Veazey was entitled to try to show that the employer intended to
use the recording in conjunction with some other device to directly assess
whether Veazey was speaking truthfully in denying responsibility for the
threatening message.

341

VII. Unemployment Compensation

Two survey period appeals, both involving the same employer, help to
illustrate when violation of a work rule is just cause for termination for
unemployment compensation purposes. In Stanrail Corp. v. Unemployment
Insurance Review Board,

342
the benefit claimant missed work on two consecutive

days and failed to report the absences in the manner required by company
policy.

343 The employer had a "demerit point" system that assessed points for
various infractions such as safety violations (fifty points), horseplay (fifty

points), and tardiness (ten points for up to six minutes, twenty points for seven

to twelve minutes, etc.).
344 Once an employee accumulated more than 500

demerit points, he or she could be immediately dismissed from work.
345

In Stanrail Corp., the claimant accumulated 300 points each for his two
unreported absences and was fired.

346
The Unemployment Insurance Review

Board found that the claimant had knowingly violated a reasonable and

uniformly enforced rule concerning absenteeism. It nevertheless reversed the

administrative law judge's finding of just cause for the termination, by
broadening its inquiry and reviewing work rules other than the rule upon which
the termination was based.347 The court ofappeals reversed the review board on

337. See id at 853.

338. See id

339. See id at 854-58.

340. Id. at 858 (quoting 29 U.S.C. § 2001(3) (1999)).

341. See id

342. 734 N.E.2d 1 102 (Ind. Ct App. 2000).

343. See id at 1104.

344. See id. at 1103.

345. See id at 1104.

346. See id.

347. See id at 1105.



200 1 ] EMPLOYMENT LAW 707

the grounds that it had impermissibly looked beyond the work rule cited as
justifying the discharge.

348

Stanrail was less successful in Stanrail Corp. v. Review Board of the
Department of Workforce Development?*

9
Stanrail changed its policy that

allowed employees who submitted proper medical documentation to take
unlimited unpaid sick leave in periods ofthree or more days at a time, to a policy
allowing only three such leaves per year. Additional sick leave earned "demerit

points" under the above-described system.
350

The claimant took two of these unpaid sick leaves and received a written
notice that he had only one remaining. He took another, and received a notice
that his next such leave would earn demerit points. He then took a fourth leave
to be treated for contact dermatitis and, upon his return, was assessed demerit
points that resulted in his termination.

351

The Indiana Court of Appeals looked to testimony of Stanrail' s human
resource manager, who stated that he had personal discretion whether or not to
enforce the policy. He also said that an employee who was pregnant, had a heart
attack or cancer, or was hospitalized for a serious illness would likely not be
assessed demerit points, but that an employee ordered by a physician to remain

in bed for a serious illness would probably accrue points.
352 The court agreed

with the review board that Stanrail was not uniformly enforcing the relevant
work rule, and also that the claimant did not "knowingly" violate the rule because
of the rule's unwritten exceptions.

353
It therefore upheld the review board's

ruling granting unemployment benefits to the claimant.
354

One additional survey period case that clarifies notice requirements is worth
noting. Scott v. Review Board of the Indiana Department of Workforce
Development

255
involved an unemployment benefits claimant who was out ofthe

state attending a funeral when her hearing notice arrived.356 The notice was
mailed the requisite ten days prior to the hearing, but had not yet been delivered

five days later when Scott left town. When she returned, Scott found in her mail
both the hearing notice and the administrative lawjudge's decision reversing the

initial approval of benefits. The review board affirmed the decision, but the
Indiana Court of Appeals reversed.

357

The court interpreted the statute to require "actual, timely notice" of a
hearing.

358
Mailing of such a notice via regular mail raises a presumption of

348. See id. at 1106.

349. 735 N.E.2d 1 197 (Ind. Ct. App. 2000).

350. See id. at 1200-01.

351. See id at 1201.

352. See id. at 1204.

353. Id at 1205.

354. See id at 1206.

355. 725 N.E.2d 993 (Ind. Ct. App. 2000).

356. See id. at 995.

357. See id.

358. Mat 996.



708 INDIANA LAW REVIEW [Vol. 34:675

notice, but this presumption is rebuttable.
359 The agency did not dispute that

Scott did not receive actual notice prior to the hearing, so the court concluded

that Scott was denied her right to a reasonable opportunity for a fair hearing of
her case's merits.

360

VIII. State Immunity

During the last survey period, a narrow U.S. Supreme Court majority held in
Alden v. Maine361 that under the Eleventh Amendment, Congress lacked the
power to subject the states to suit under the Fair Labor Standards Act (FLSA) in
either federal or state courts.

362
Several survey period decisions followed up on

this holding by addressing whether the states are subject to certain other federal
employment laws. In Kimel v. Florida Board ofRegents?** the U.S. Supreme
Court held that the Age Discrimination in Employment Act (ADEA), like the
FLSA, did not abrogate the states' Eleventh Amendment immunity.364 Although
the ADEA, unlike the FLSA, contains a clear statement of Congress' intent to
abrogate state immunity, the Court held that Congress exceeded its constitutional

authority under the Fourteenth Amendment in attempting to subject the states to
the ADEA's provisions.365

On February 21, 2001, the Court similarly, in University ofAlabama at
Birmingham Board ofTrustees v. Garrett

366
held that the Eleventh Amendment

bars suits in federal court by state employees to recover money damages for
failure to comply with Title I ofthe ADA.367

The Seventh Circuit denied an Eleventh Amendment defense in Varner v.
Illinois State University,

36* which involved an Equal Pay Act (EPA) claim. A
class of tenured and tenure track female faculty members sued the University,
claiming pay discrimination. When the Seventh Circuit originally considered the
case in 1998, it held that "Congress clearly intended to abrogate the States'

Eleventh Amendment immunity through its passage of the Equal Pay Act, and
that this abrogation was a valid exercise ofcongressional authority under § 5 of
the Fourteenth Amendment."

369
The U.S. Supreme Court, on writ of certiorari,

vacated and remanded the decision for further consideration in light ofKimel.
370

359. See id.

360. See id.

361. 527 U.S. 706(1999).

362. See id. at 712.

363. 528 U.S. 62 (2000).

364. See id. at 67.

365. See id. at 66-67.

366. 121 S. Ct. 955 (2001).

367. See id at 960.

368. 226 F.3d 927 (7th Cir. 2000).

369. Id. at 929 (citing Varner v. 111. St. Univ., 1 50 F.3d 706, 7 1 7 (7th Cir. 1 998), vacated, 1 20

Ct. 928 (2000)).

370. See III. State Univ. v. Varner, 528 U.S. 1110 (2000).



200 1 ] EMPLOYMENT LAW 709

On remand, the Seventh Circuit reached the same conclusion, contrasting the
EPA, which prohibits discrimination in wages based on gender, from statues
aimed at discrimination based on age and disability. The latter forms of
discrimination receive only rational basis review underthe Constitution, whereas

gender-based classifications receive heightened scrutiny.
371

Because the EPA
qualifies as "remedial or preventive legislation aimed at securing the protections

of the Fourteenth Amendment," the Seventh Circuit again rejected the
University's Eleventh Amendment defense.372

IX. Procedural Issues

A. Sufficiency ofthe EEOC Charge

The Seventh Circuit clarified several significant procedural questions during
the survey period. One issue of critical importance to practitioners is the
sufficiency of the EEOC charging document. Three cases on this topic are
notable. The first is Novitsky v. American Consulting Engineers, L.L.C,373 in
which the plaintiff complained that her employer discharged her based on age
and religion, and allowed other employees to make anti-Semitic remarks in the
workplace.

374 The plaintiff also sought damages for emotional distress because
her employer failed to accommodate her religious beliefs by denying her time off
on Yom Kippur. The court first observed that such damages could not be more
than a day's pay because after her request was denied, the plaintiff worked on
Yom Kippur. 375 The plaintiffs duty to mitigate damages obligated her to choose
between working or not working based upon whichever caused the lesser injury,

so the maximum loss would be the day's pay lost by not working.376 In any
event, however, the plaintiff had waived the failure-to-accommodate claim by

excluding it from her charge.
377

Lack of notice to the employer of its alleged
failure "frustrated the conciliation process" that is the purpose of the EEOC
charging procedure.

378 The plaintiff unsuccessfully attempted to blame the
EEOC, because her intake questionnaire did list the Yom Kippur episode. By
statute, however, it is the charge and not the questionnaire that governs the action

because the employer receives only the charge.
379 The plaintifffreely signed the

371

.

See Varner, 226 F.3d at 934.

372. Id. at 936 (quoting Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527

U.S. 627,639(1999)).

373. 1 96 F.3d 699 (7th Cir. 1 999).

374. Sm ft* at 701.
375. See id.

376. See id. The court acknowledged that the calculation would be more complicated if the

plaintiff offered any evidence that refusal to work could have jeopardized her job. See id.

377. See id. at 703.

378. Id. at 702.

379. See id. (citing 42 U.S.C. § 2000e-5(b)).



7 1 INDIANA LAW REVIEW [Vol. 34:675

charge, and therefore was bound whether she read it or not.
380

A similar issue arose in Vela v. Village ofSauk Village.™ Plaintiff Vela
circled "harassment" as a type ofdiscrimination alleged on her intake form, but

this item was subsequently crossed out on the form.
382 On her actual charge

form, Vela checked "sex" and "national origin" as bases of discrimination and

listed three specific incidents in which she claimed she was treated differently
from non-Mexican male employees. The district court granted the employer's
summaryjudgment motion, in part because ofVela's failure to include a sexual
harassment claim in her EEOC charge. 383

Vela unsuccessfully argued on appeal that because sexual harassment is a

form of sexual discrimination, her charge was sufficient because she checked
"sex" as one basis ofdiscrimination against her. The Seventh Circuit disagreed,
citing precedent that there must be "a reasonable relationship between the

allegations in the charge and the claims in the complaint," and that it must appear

that "the claim in the complaint can reasonably be expected to grow out of an
EEOC investigation of the allegations in the charge."384

Vela also argued that she had orally communicated the facts related to her
sexual harassment claim to an agency intake officer, who misled herwhen he told
her to cross out the sexual harassment reference on the intake form and who
omitted the claim ofharassment when he typed the charge. The Seventh Circuit
remained unpersuaded, citing Novitsky and stating that "an oral charge, if made
as [Vela] testified, not reflected in nor reasonably related to the charge actually

filed, is not a sufficient predicate for a claim of sexual harassment in her civil

action."
385

These two cases make clear that an oral statement to an EEOC
representative is no substitute for written documentation in the formal charge of
all types of discrimination alleged.

The final case covering sufficiency ofthe EEOC charging document is Scott
v. City ofChicago.

296 The plaintiff charged the employer with taking actions to
"lessen [her] job responsibilities" based on race and age.

387 The city sought

380. See id. Judge Rovner, concurring, focused on the fact that here, the plaintiffs counsel

was present when the plaintiff reviewed and signed the charge that the EEOC drafted. See id. at
703 (Rovner, J., concurring). The panel majority opinion noted that the charge did not offer the

employer adequate notice "whether or not the complainant had a lawyer, whether or not she sought

or listened to counsel, indeed, whether or not she read or understood the charge/' Id. at 702-03.

Judge Rovner wrote that "[c]ontrary to the opinion's implications, we do not now decide whether

an illiterate person orpro se person who signs a charge prepared by the EEOC, which leaves out

critical information provided by the claimant to the EEOC in the intake questionnaire, would be
similarly bound by the charge." Id. at 703 (Rovner, J., concurring).

381. 218 F.3d 661 (7th Cir. 2000).

382. See id. at 663.

383. See id.

384. Id. at 664 (quoting Cheek v. W. & S. Life Ins. Co., 31 F.3d 497, 500 (7th Cir. 1994)).
385. Id. at 665.

386. 195 F.3d 950 (7th Cir. 1999).

387. Id. at 951.



200 1 ] EMPLOYMENT LAW 7 1

1

dismissal, citing several cases in which the complaint failed to include notice of
an item that was essential to the plaintiffs claim.388 The Seventh Circuit held on
appeal that the district court wrongly granted the employer's motion to dismiss.

The reason for the dismissal was that the complainant failed to specify what
adverse employment actions the employer took against her.

389
However, the

Seventh Circuit focused on the fact that the plaintiff held a distinctive job
position, as Assistant Commissioner of Systemwide Services at the City of
Chicago Public Library. In light ofher uniquejob responsibilities, the court held
that the complaint adequately communicated the gravamen of her claims.

390

B. Title VII Class Notice Requirements

Another important procedural issue involves Title VII class certification. In

Jefferson v. IngersollInternationalInc. ,
m

the plaintiffs as a class filed a pattern-

or-practice suit asserting that the defendant employers committed race

discrimination in considering employment applications. They sought both
equitable reliefand monetary damages.

392
Prior to the Civil Rights Act of 1991

,

the normal basis of class certification in pattern-or-practice cases was Federal
Rule ofCivil Procedure 23(bX2), because only equitable reliefwas available.

393

This rule, unlike Rule 23(bX3), which applies when the plaintiffs seek money
damages, does not require notice to each class member, and does not allow class
members to opt out; ofthe action.394 The districtjudge in Jefferson ruled that the
plaintiffs could proceed under Rule 23(bX2), and the defendants brought an

interlocutory appeal.
395

The Seventh Circuit held that when a plaintiff class seeks compensatory or
punitive damages, Rule 23(b)(2) applies only if the monetary relief sought "is

incidental to the equitable remedy."
396 The court remanded the case for

resolution ofwhether the damages sought were more than incidental.
397

Ifso, the

388. See id. at 952 (citing Kyle v. Morton High Sen., 144 F.3d 448, 454 (7th Cir. 1998); see

also Panaras v. Liquid Carbonic Indus. Corp., 74 F.3d 786, 792 (7th Cir. 1996); Perkins v.

Silverstein, 939 F.2d 463, 467-68 (7th Cir. 1991)).

389. See id at 95 1.

390. See id at 952.

391. 195 F.3d 894 (7th Cir. 1999).

392. See id at 896.

393. See id. Before the Civil Rights Act of 1991 became effective, class members could

receive a monetary award for back pay, but the back pay was deemed equitable relief. See id.

394. See id

395. See id at 897.

396. Id. at 898. The court noted the U.S. Supreme Court's holding in Ortiz v. Fibreboard

Corp., 527 U.S. 815 (1999), that "proper interpretation of Rule 23, principles of sound judicial

management, and constitutional considerations (due process and jury trial), all lead to the

conclusion that in actions for money damages class members are entitled to personal notice and an

opportunity to opt out." Jefferson, 195 F.3d at 897.

397. See id at 899.



7 1

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INDIANA LAW REVIEW [Vol. 34:675

court directed, the district court could either certify the class under Rule 23(b)(3)

for all purposes, or it could bifurcate the proceedings by certifying a class under

Rule 23(b)(3) for money damages and under Rule 23(b)(2) for equitable relief.398

Later during the survey period, the Seventh Circuit reaffirmed both this

holding and the acceptable alternative approaches in Lemon v. International
Union ofOperating Engineers?" In Lemon, the court observed that the more
abbreviated procedure ofRule 23(b)(2) is based on the presumption that the class

members have "cohesive and homogeneous" interests in redressing a common
injury by an injunctive or declaratory remedy.

400
In contrast, monetary damage

claims typically "require judicial inquiry into the particularized merits of each

individual plaintiffs claim."
401

C. Other Developments

Another noteworthy Seventh Circuit case in the procedural arena is Pohl v.

United Airlines, Inc.
402

In Pohl, an aircraft inspector sued his employer for

discrimination based on military status. His attorney discussed the case with

opposing counsel and the attorneys for both sides informed the court that they

had agreed to a settlement. The plaintiff then refused to sign the settlement
agreement, claiming that his attorney had not been authorized to settle. District

Judge Barker entered an order enforcing the agreement on the grounds that the
attorney had actual authority to settle, and the Seventh Circuit affirmed, applying

Indiana law.
403

Pohl had participated in a series oftelephone conversations with his attorney

during settlement negotiations, which correlated with his attorney's calls to

opposing counsel. Pohl did not object when he received his attorney's letter
informing him that his case had been settled. The attorney testified to having
communicated each aspect of the settlement to Pohl. Pohl pointed to his
handwritten caveat "with my authorization," which he had added to the section
ofhis retainer agreement granting a power ofattorney to execute all documents,
including settlement agreements. The court, however, refused to interpret this
addendum as requiring written authorization, referring to the plaintiffs
"misplaced belief that he could back out of the settlement at any time prior to

signing it."
404

In light ofthe court's stance, diligent attorneys will make clear to
their clients that a litigant may be bound by a settlement agreement if he

398. See id. The Seventh Circuit also addressed the contention that the EEOC's intervention

on the plaintiffs' behalf rendered the class certification issue moot. The court rejected this

argument because the EEOC might not seek or receive the same relief that the plaintiffs were
seeking in their class suit. See id.

399. 216 F.3d 577 (7th Cir. 2000).

400. A/, at 580.

401. Id.

402. 213 F.3d 336 (7th Cir. 2000).

403. See id. at 337-38, 340.

404. Id. at 340.



200 1 ] EMPLOYMENT LAW 7 1

3

acquiesces in his attorney's representations during negotiations, even prior to

formally signing any settlement documentation.

Moving on to administrative developments, the National Labor Relation
Board (NLRB) made news by ruling that nonunion workers must be allowed to
bring a witness to any workplace meeting that might lead to disciplinary action.

405

The NLRB had extended these "Weingarten rights"406 to nonunion employees in
1 982, but reversed its position in 1 985.

407 The most recent, three-to-two decision
restores those rights retroactively, and may help plaintiffs survive summary
judgment by allowing a witness to verify their version of events.

408

The NLRB majority looked to section 7 ofthe National Labor Relations Act,
which protects the right ofemployees to engage in '"concerted activities for the
purpose of mutual aid or protection.'"

409
Extending Weingarten rights, it held,

would further this purpose by discouraging unjust punishment of employees.
410

The two dissenting NLRB members raised a number ofconcerns, in addition
to the uncertainty that such departures from precedent create.

4 M One was that a
nonunion employee-witness might well lack the knowledge and experience of a
union-trained observer and would not represent the interests of all unit

employees.
412

Another was the likelihood of increased litigation due to a lack of
employer awareness, which would lead to frequent violations.

413
Finally, the

presence ofan employee-witness could impair the effectiveness ofthe interview

from the employer's perspective, particularly if the assistant is someone
personally involved in the matter under investigation.

414

In addition to raising these concerns, the NLRB's opinion leaves a number
of questions unanswered. One is whether employers must pay employee-
witnesses or grant them time offto attend investigatory interviews.

415 TheNLRB
also did not address whether employers must give employees advance warning

that a meeting might lead to discipline, nor did it define exactly what type of

meetings are covered, such as negative performance appraisals. There is also

some debate whether employers are obligated to follow a policy of notifying
nonunion employees of their Weingarten rights.

416

405. See Epilepsy Found, of Northeast Ohio, 331 NLRB No. 92 (2000), 2000 WL 967066
(NLRB).

406. See NLRB v. Weingarten, 420 U.S. 25 1 (1975).
407. See Epilepsy Found., 331 NLRB No. 92, 2000 WL 967066, at 3.
408. See id. at 4.

409. See id.

410. See id.

411. See id. at 12.

412. See id. at 13, 29.

413. See id. at 14 ("The workplace has become a garden of litigation and the Board is adding

another cause of action to flower therein, but hiding in the weeds.").

414. Id. at 43, 100.

4 1 5. See Susan J. McGolrick, Employee Rights: Attorneys Disagree About Wisdom ofNLRB
Extending Weingarten Rights, DAILY LAB. Rep., Aug. 7, 2000.

416. See id.



714 INDIANA LAW REVIEW [Vol. 34:675

This ruling helps level the playing field for employees who are unfairly
disciplined or discharged and should encourage plaintiffs' attorneys. The ruling,
however, requires close monitoring. An appeal seems likely, and the fact that the
NLRB members split their votes along party lines (with the three Democrats in
the majority and the two Republicans dissenting

417
) makes it possible that a

change in the NLRB's composition could lead to yet another reversal.

X. The "Watch List"

A. The Enforceability ofArbitration Agreements

One hot topic in employment law is how far employers can go in requiring
employees to agree to binding arbitration. In an effort to control legal costs,
employers have increasingly turned to this kind ofagreement, and until recently

the enforceability of such agreements seemed fairly clearcut.
418 The Seventh

Circuit, along with most other circuits, had taken the position that the Act

authorizes federal courts to enforce binding arbitration provisions in all

employment contracts.419 But then the Ninth Circuit took a contrary position that
caused great consternation among employers, and the U.S. Supreme Court
stepped in to resolve the circuit split.

On March 2 1 , 2001 employers applauded the U.S. Supreme Court's decision
in Circuit City Stores, Inc. v. Adams,

420
which left the Seventh Circuit precedent

undisturbed. Plaintiff Adams signed a form as part of his application when
Circuit City hired him in 1995, agreeing to submit all employment disputes to
binding arbitration.

421 Two years later, Adams brought suit in state court alleging
harassment based on sexual orientation under California law.

422 The Ninth
Circuit interpreted language in the Federal Arbitration Act exempting "contracts

of employment of seamen, railroad employees, or any other class of workers
engaged in foreign or interstate commerce" as excluding all employment
contracts from the Act's coverage.

423
It reversed the federal district court's order

compelling arbitration.
424

The U.S. Supreme Court reversed the Ninth Circuit in a 5-4 decision based
upon the text of the statute, rather than its legislative history.

425 The majority

417. See id

4 1 8. The Federal Arbitration Act, 9 U.S.C. § 1 (2000), makes predispute arbitration valid and

enforceable. See Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 364 (7th Cir.), cert,
denied, 528 U.S. 811(1999).

419. See Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361 (7th Cir. 1999).
420. No. 99-1379, 2001 U.S. LEXIS 2459 (Mar. 21, 2001).

421. See id at *8-9.

422

.

Id. at * 9; Marcia Coyle, Three High Court Rulings Give Business Upper Hand in ADRs,

Nat'l. L.J., Apr. 2, 2001 at Bl.

423. Circuit City, 2001 U.S. LEXIS 2459 at *7-8,

424. See Circuit City Stores, Inc. v. Adams, 194 F.3d 1070 (9th Cir. 1999).

425. See Circuit City, 2001 U.S. LEXIS 2459 at *7, *25-26, *33.



200 1 ] EMPLOYMENT LAW 7 1

5

interpreted the Act's exemption narrowly as excluding only transportation

worker employment contracts from the Act's coverage.426 Justice Anthony M.
Kennedy, writing for the majority, noted "Arbitration agreements allow parties
to avoid the costs of litigation, a benefit that may be of particular importance in
employment litigation."

427
The Court was not persuaded by the attorneys general

oftwenty-two states, who argued as amici that the Federal Arbitration Act should
not be read to pre-empt state laws that protected employees by prohibiting them
from signing away their rights to pursue state-law discrimination actions in
court.

428

While the decision clarified the overall scope ofthe Federal Arbitration Act,
it left many questions unanswered. The Court reiterated a prior holding that "by
agreeing to arbitrate a statutory claim, a party does not forgo the substantive

rights afforded by the statute; it only submits to their resolution in an arbitral,

rather than a judicial, forum."
429

It remains to be seen whether workers who
agree to arbitration retain their rights to collect punitive damages and attorney
fees, and to pursue class actions. Another unresolved question is how broadly
"transportation workers" will be defined.

The role of agencies such as the EEOC in cases involving arbitration
agreements is another open issue. The Court has granted certiorari in its first
case dealing with this question. Next term, it will take up the case of E.E.O.C.
v. Waffle House, /«c.,

430
in which the EEOC is arguing that it should not be

precluded from seeking relief such as back pay, damages or reinstatement on
behalf of workers who signed arbitration agreements because it was not a party
to the agreement.

431 Employment law attorneys should watch for this decision
and others clarifying the power ofemployment arbitration agreements.

B. Electronic Monitoring ofEmployee Activities

A second area worth watching falls under the general heading ofworkplace
privacy. During the summer of 2000, sponsors introduced the Notice of
Electronic Monitoring Act in both the U.S. Senate and the House of
Representatives.

432 The proposed bill would prohibit secret surveillance of

employee communications, by requiring employers notify employees before

monitoring telephones, e-mail or Internet use and/or tracking computer

keystrokes. The proposed notice requirement includes the frequency ofemployer
monitoring activities.

Although the bill stalled in the committee process, workplace privacy issues

426. See id. at*25.

427. A/.at*32.

428. See id. at *29-30.

429. Id. at *33 (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991)).

430. 193 F.3d 805 (4th Cir. 1999), cert, granted, 69 U.S.L.W. 3628 (U.S. Mar. 26, 2001) (No.

99-1823).

431. See id. at 806-07.

432. See H.R. 4908, 106th Cong. (2d Sess. 2000); see also S. 2898, 106th Cong. (2000).



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INDIANA LAW REVIEW [Vol. 34:675

continue to receive significant press. Evolving technology that offers employer

ever cheaper and more comprehensive monitoring tools may increase employers'
monitoring practices.

433
Those interested should watch for further legislative

activity.

C. Carpal Tunnel Syndrome as a Disability; Job Transfer
Rights ofthe Disabled

On April 16, 2001, the U.S. Supreme Court granted certiorari in two ADA
cases for the 2001 term.

434
In the first, Williams v. Toyota Motor Manufacturing,

Ky, Inc.,
A3S

the Sixth Circuit held that a woman with carpal tunnel syndrome
qualified for protection under the ADA because she was substantially limited in
performing manual tasks.

436
Toyota argues that the plaintiff can do other work

and engage in a many everyday activities, which makes her only partially
impaired and ineligible for ADA protection.437 It is asking the Court to interpret
the ADA to require an impairment that significantly restricts, and does not
merely affect, a major life activity.

438

The second case, Barnett v. U.S. Air,439 involves a disabled employee's right
to reassignment into a position that she could not otherwise claim due to a

unilaterally imposed seniority system.
440

The Ninth Circuit looked for guidance
to the EEOC's compliance manual, which says, "Reassignment means that the
employment gets the vacant position if s/he is qualified for it. Otherwise,
reassignment would be of little value and would not be implemented as Congress
intended."

441
It held that "reassignment is a reasonable accommodation and .

.

. a seniority system is not a per se bar to reassignment," although "a seniority

system is a factor in the undue hardship analysis" that is conducted on a case-by-
case basis.

442

Employment law attorneys who work with disability claims will look forward
with interest to the U.S. Supreme Court's take on these issues.

433. See GregMiller, High-Tech SnoopingAll in Day's Work; Security: Some FirmsAreNow
Using Computer Investigators to Uncover Employee Wrongdoing, L.A. TIMES, Oct. 29, 2000, at

A 1 ; see also Joe Salkowski, Rising Workplace Hazard: Snooping, Cm. TR1B., July 3 1 , 2000, at C5.
434. See Linda Greenhouse, Justices Accept 2 Cases to Clarify Protection/or Disabled, N.Y.

Times, April 17, 2001 at A13.

435. 224 F.3d 840 (6th Cir. 2000).

436. See id, at 843.

437. See Greenhouse, supra note 434.

438. See id.

439. 228 F.3d 1 105 (9th Cir. 2000).

440. See id. at 1118.

44 1

.

Id. (quoting EEOC Enforcement Guidance, EEOC Compliance Manual 5452).
442. Id. at 1120.



200 1
]

EMPLOYMENT LAW 7 1

7

Conclusion

The survey period developments covered the entire employment spectrum.

Many issues remain evolutionary, and the volume and variety of these
developments may frustrate practitioners who are struggling to keep current.

On a more positive note, it is this diversity ofclaim types, issues, and factual
scenarios that makes employment law such a vital area of practice. The ever-
shifting landscape creates potential pitfalls for the uninformed, but it assures that

employment attorneys will remain challenged.